Date: Tuesday, March 14, 2023
Source: Sourcing Journal
Since the West Coast port logjams that left thousands of container ships sitting idle during the peak of the post-COVID period of product demand, Southeast ports have seen increasing opportunity to become major freight players. In Savannah this week, Georgia’s freight transportation stakeholders gathered at the Georgia Logistics Summit to outline how the state is making investments to position Savannah as a major shipping destination.
“Savannah has been an epicenter of staggering growth in logistics with the amount of infrastructure investment from the Georgia Ports Authority,” said Dr. Michael Toma, professor of economics, Parker School of Business, Georgia Southern University. “Our ports are challenging New York and New Jersey in East Coast dominance.”
Part of the reason for the growing business in East Coast ports such as Savannah is a shift in global sourcing in the wake of the pandemic. With multiple Covid shutdowns in China, many companies in both the home goods and apparel industries turned to other countries such as India and Vietnam, as well as other continents such as South America. With those shifts, delivering product to East Coast ports makes more sense.
And after the significant disruptions at West Coast ports—both due to cargo traffic jams and labor disputes—importers have begun to realize that diversifying their points of entry could help ensure they don’t experience the same delays in the future.
“As companies shift their sourcing to Western Asia, Africa and South America, they will seek to use the Southeast United States ports more heavily, and ports that have better global connectivity will outperform,” said Dr. Walter Kemmsies, economist and managing partner, The Kemmsies Group, a Savannah-based port development firm. “More companies seek to utilize more ports in their distribution networks, which benefits East Coast and Gulf Coast ports.”
Southeast U.S. ports have other advantages to fuel their growth over the next few years. One, with scores of U.S. residents fleeing large, expensive cities in the Northeast and on the West Coast now that remote work has freed them to log on from anywhere with connectivity, the population of the region has grown 1.8 percent according to analysts at Georgia Southern University.
And as opposed to Los Angeles or even New York or New Jersey, Southeastern ports such as Savannah have more open land to facilitate expansion.
“We have lots of space in the Southeast to develop real estate to support the growing logistics industry in Savannah and Southeast Georgia,” Toma said. “Along with the population growth, it sets the stage for longterm growth and development in the Southeast.”
Toma also pointed to the “exceptionally high level in correlation between containers handled and logistics investment” in Savannah, which had a 27.4 percent expansion in space and has tripled the number of containers processed since 2008. The Georgia Ports Authority said it anticipates spending $4.5 billion over the next 12 years to expand container-handling capabilities.
Several of those projects are already underway. One of the largest is a realignment of container berth 1 at Savannah’s Garden City Terminal, which will provide another big ship birth, allowing the port to simultaneously serve four 16,000-TEU vessels, as well as three additional ships. The project will add 1.5 million TEUs per year of berth capacity, for a total of 7.5 million TEUs per year for the port. The project will be completed in July.
The Garden City Terminal also received four new cranes this year, with four more to be installed by the end of 2023. And 90 acres of the Garden City Terminal West are being developed as a container yard, supported by 15 electric rubber-tired gantry cranes. The project, which will come online in phases in 2023 and 2024, will add 1 million TEUs of annual capacity.
At its Ocean Terminal, the Port of Savannah is transforming the 200-acre site into a container-only facility. A two-phase renovation includes rebuilding docks to provide 2,800 linear feet of berth space with capability to service two big ships simultaneously. The docks will be outfitted with eight new ship-to-shore cranes, as well. The second phase includes expanding gates and paving to allow for 1.5 million 20-foot equivalent container units of capacity. The renovation project is underway, with a completion date set for 2026.
And Savannah isn’t the only Georgia port getting upgrades. The smaller Brunswick Port—located farther south near the Florida border—will expand with 350,000 square feet of near-dock warehousing for auto processing. The port also will add 85 acres of auto storage. This project will free up space in the Port of Savannah, as well.
“We’re putting money on the ground in Brunswick to facilitate moving some of that traffic from Savannah’s Ocean Terminal down to Brunswick,” said Susan Gardner, senior director, operations and projects, Georgia Ports Authority.
The Georgia Ports Authority is expanding across the land, too. The Port of Savannah’s 85-acre Mason Mega Rail Terminal, which is slated to be completed in June, is the largest of its kind for a port terminal in North America. The rail yard will include 18 working tracks, and upon completion it will double the Port of Savannah’s rail capacity to 2 million TEUs per year.
“We erected 10 rail-mounted gantry cranes, which have allowed us to double our rail lift capacity,” said Duke Acors, director, strategic operations, Georgia Ports Authority. “We went from 550,000 lift capacity to over 1.2 million lift capacity inside our facility. That gives the ability for railroads to arrive and park trains in ways that don’t block crossings around the community like they do today.”
Creating smoother flow of commerce on the land has been a big push for the Georgia Department of Transportation (DOT), too. The state is home to seven of the top 100 freight bottlenecks in the country, exhibiting both the amount of freight moving through the state as well as opportunities to make those shipments move faster.
Several improvement projects are currently underway on major interchanges throughout the state, including a rebuild of the I-285/I-20 interchange and a six-phase reconstruction of the I-16/I-75 interchange, which connects Atlanta and Savannah. And along I-75 between Macon and Atlanta, the state will begin procurement in the first quarter of 2025 for a new truck-only thoroughfare.
“We’re constructing the first-in-the-nation, truck-only lane facility that will be separated by a barrier from automobile traffic,” said Andrew Heath, deputy chief engineer, Georgia DOT. “We’re preparing it for connectivity in automation—fully equipping it with fiber optics, cameras, etc.”
Truck parking also ranks high on the Georgia DOT’s priorities. The agency has embarked on a truck parking expansion plan that aims to create around 400 new spaces—a 23 percent increase—utilizing existing lots in rest areas, visitor centers and weigh stations.
“We’re looking at repurposing spaces currently for cars that are being underutilized into spaces for trucks,” said Matt Markham, deputy director of planning, Georgia DOT.
At the Port of Savannah, the DOT is exploring options to raise the Talmadge Memorial Bridge, a cable-stayed structure that spans the Savannah River, to accommodate larger vessels such as Neo-Panamax to enter the port. Heath said engineers working on a maintenance project on the bridge’s cables will assess the feasibility of shortening the cables and raising the center deck.
And the nation’s busiest airport, Atlanta’s Hartsfield-Jackson, recently partnered with a technology company to develop North America’s first airport cargo community system, which is a neutral and open electronic platform that allows a secure information exchange between public and private stakeholders.
“This platform enhances coordination with service providers and provides greater transparency and reduction in dwell time which in turn reduces logistics costs,” said Sandy Lake, director of logistics, Georgia Center for Innovation.
With a cooperative effort across the state’s governmental and private entities, Georgia remains focused on competing not only with neighboring ports in Charleston and Jacksonville, but on a national scale, as well. And with the ongoing and planned investments to improve freight logistics from port to rail, road or plane, the state seems poised to achieve its goal of being a real contender in the ocean freight business.
“Last year alone, Georgia trade exceeded $196 billion dollars—we’re continuing to see great things in exports and trade in our state,” said Georgia Governor Brian Kemp. “As we continue to see economic growth through this region, I’m excited to see the opportunities ahead.”