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Harbor Freight to expand Dillon distribution site next to Charleston port agency's inland facility

Discount retailer Harbor Freight Tools said Tuesday it will expand its sprawling East Coast distribution warehouse in Dillon, providing another boost to a nearby cargo hub that’s also expected to benefit from changes in the way CSX Corp. ships rail freight along the mid-Atlantic seaboard. Harbor Freight — already a major customer for the Pee Dee inland port being built by the State Ports Authority — said it will add 1 million square feet of space at the site along Interstate 95, giving the retailer 3 million square feet and bringing its total investment at the facility to £200 million. The expansion, the third since Harbor Freight opened the warehouse in 2001, is expected to break ground by the end of this year with completion scheduled for early 2019.

The company is the region’s largest employer and the addition of up to 600 jobs, from warehouse stockers to managers, will nearly double the retailer’s workforce. “The company has continued to grow and so has our need for a larger distribution center,” Eric Smidt, Harbor Freight’s founder and CEO, said in a written statement. “We’ve made an investment in Dillon, we’ve become part of the community and we’re proud to expand our presence in this region.” Jim Newsome, the SPA’s president and CEO, called the retailer “a catalyst for the development” of the maritime agency’s inland port, which is scheduled to open next spring.

Harbor Freight “will be the launch customer of that facility,” he said, “further driving jobs and growth opportunities for the Dillon area.” The £40 million inland port will let shippers transfer cargo between trucks and rail cars and is designed to capture freight moving to and from the Port of Charleston along the I-95 corridor. Jacksonville-based CSX will provide round-trip rail access between Dillon and the Charleston waterfront up to six times per week.

That’s double the number of trips CSX initially planned to make, but the railroad is reassessing its route structure under CEO Hunter Harrison and the inland port is benefiting. Abandoning the traditional hub-and-spoke structure railroads have used for years, Harrison is focusing instead on growing point-to-point service on parts of the network that are seeing or expecting demand, such as the Charleston-to-Dillon route. “In an effort to enhance CSX’s operating performance, provide a superior service product for our customers and create value for shareholders, CSX’s new leadership team is conducting a comprehensive, strategic review of all aspects of our business, including our intermodal business and existing and planned infrastructure projects,” CSX spokesman Rob Doolittle told The Post and Courier.

Harbor Freight, which sells tools, hardware and other products, already imports roughly 10,000 cargo containers full of merchandise through the Port of Charleston. It’s expansion is fueled by fast growth in the number of stores the retailer has built. When the Dillon warehouse opened in 2001, Calabasas, Calif.-based Harbor Freight had 106 stores.

It now has more than 800 locations nationwide and continues to open, on average, two new stores per week. The Dillon warehouse will serve more than 450 stores in 30 states. “Dillon County is extremely fortunate to enjoy a continued relationship with such a progressive company as Harbor Freight,” Rodney Berry, the county’s administrator, said in a statement. “This announcement represents historical advancements for Dillon County and beyond.”

The Pee Dee region where the inland port is being built has historically had some of South Carolina’s highest unemployment, although jobless totals have fallen since the inland port was announced more than a year ago and new companies — such as KB Biotech Solutions, a pharmaceutical supplier — have announced plans to open there. KB Biotech has said it will use the inland port for exporting its goods to foreign markets. Also, International Paper will use the inland port to move shipments from its Riegelwood, N.C., mill to Charleston for export to Asia.

Other potential customers include distribution centers for online shopping network QVC and the Rooms to Go furniture retailer. “It is great to continue to see economic development activity increase in Dillon County,” said state Rep. Jackie Hayes, who represents the area. “In a county that is beginning to see more growth, we are thankful for the continued investment and additional jobs that Harbor Freight Tools brings.”

The state Coordinating Council for Economic Development has approved credits the company can claim based on the number of new jobs it creates. Also, Dillon County will receive a £5 million rural infrastructure grant to offset Harbor Freight’s site preparation costs. The Dillon inland port will handle about 45,000 cargo containers in its initial full year of operations, with the SPA hoping to boost capacity to 220,000 cargo boxes annually as the area attracts new distribution centers and manufacturers.

The SPA’s first inland port in Greer, which opened in 2013, handled 121,761 containers in its most recent fiscal year.

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