Opening port holes.

• Author: Wittebort, Suzanne
• Position: Wilmington and Morehead City

Burrowing for business, Wilmington and Morehead City scratch a niche from which they hope to grow.

In 1989, when Jim Scott reported for work in Wilmington as the new executive director of the North Carolina State Ports Authority, he had his work cut out for him. Two major shipping lines, Sea Land and American Container Line, had just dropped Wilmington as a port of call, and tonnage handled there had plunged by almost half. Wilmington and Morehead City together had lost money for two consecutive years and ranked dead last in market share among the major ports from New York to Jacksonville, Fla. Long overshadowed by neighbors Norfolk and Charleston, Wilmington was in danger of becoming a backwater.

Today the ports are still struggling. Long-term trends in shipping continue to pressure all Atlantic ports. After earning between $589,000 and $2.6 million annually from 1990 to 1992, the North Carolina ports lost $790,276 in fiscal 1993 on a 4% decline in revenues to $24 million. "They've got a very, very tough job, located between two major ports with a lot of service to almost every area of the world," notes Clarence Groce, manager of import/export services for R.J. Reynolds Tobacco Co. in Winston-Salem. "It's like playing one-on-one with Michael Jordan."

But Scott and his colleagues figure that if North Carolina ports aren't Charles Barkley, they can be Muggsy Bogues: small but quick, smart and aggressive. Today Wilmington and Morehead City are building solid reputations as niche ports. Scott and his team are widely credited with running the state agency like a for-profit business, complete with a hard sell to shipping lines, the state's corporations and legislators in Raleigh and Washington.

Their efforts have reversed the ports' downward momentum and buffed up their image. Since 1990 the ports have bucked the industry trend by recruiting a net three additional container lines and have initiated or increased service on five trade routes, including Europe, South America and Africa. Wilmington's tonnage of goods shipped in containers has grown by 28% since 1989. "They are on the proverbial roll at the moment," says James Brennan, head of port consulting for the Lexington, Mass.-based Mercer Management Consulting.

There's also plenty of room to grow. North Carolina is the nation's eighth-largest manufacturing state and, thanks largely to tobacco, one of the few to show a foreign-trade surplus, a hefty $4 billion last year. Though most of the state's bulk and break-bulk cargoes flow through Wilmington and Morehead City, marketshare studies show that 81% of the state's containerized exports and imports are passing through out-of-state ports. "Wilmington has a huge potential because of North Carolina industry," Scott says. "The state has just never pushed the port to the extent that other states have."

Granted, the state's ports are coming from a long way back. In the fiscal year ended June 30, Wilmington and Morehead City together handled 4.4 million tons. Volume at the Hampton Roads ports of Virginia was 5.8 million tons (excluding some 65 million tons of coal handled privately) and at Charleston, 7.1 million.

Despite their relative puniness, the ports play a significant role in the state's economy, according to a study completed this summer by Gary Shoesmith, associate professor of management at Wake Forest University. The study calculates that statewide 41,685 jobs, $1 billion in income, $5.1 billion in sales and $131.7 million in state and local taxes during fiscal 1992 were directly...