Georgia’s Powerful Ports
Measured in the simplest and broadest terms, the total economic impact of the ports on Georgia’s economy is $55.8 billion.
Georgia’s deepwater ports are a major linchpin of our outsized distribution industry, which is thriving. The ports are one of our strongest economic engines, and they generate substantial economic impacts.
The emergence of a transportation and logistics industry that’s one of the main clusters of distribution activity in North America is a big plus for the state’s continued economic growth and development, and helps to ensure that we reap some of the benefits of an expanding global economy.
Georgia’s deepwater ports industry consists of public marine terminals in Savannah and Brunswick owned by the Georgia Ports Authority, as well as private marine terminals that dot the Georgia coast.
Savannah’s port is one of the fastest growing container ports in the world, ending fiscal year 2006 with a 15.9 percent increase in the number of TEUs (Twenty-Foot Equivalent Units), and a record 2.04 million TEUs shipped.
In the previous fiscal year, the Port of Savannah saw a 12 percent increase in the number of TEUs, and a record 1.76 million TEUs shipped. Thus, the port is well on its way toward exceeding its goal of achieving a 150 percent increase in TEUs within 15 years. In fact, between 2000 and 2005 Savannah was the nation’s fastest growing port, with a compound annual growth rate of 16.5 percent; the national average was 9.7 percent.
The announcement of several new shipping services at the Port of Savannah, including a 20-year agreement with Maersk Line and a 15-year agreement with CMA CGM, enhance prospects for growth. Target and IKEA plan to build 4 million additional square feet of distribution space at the Savannah International Trade Park.
Meanwhile, the Port of Brunswick has carved a lucrative niche for itself in agricultural cargo and car shipments. A massive rail expansion project recently approved for this port will double its rail capacity.
The superb performance of Georgia’s ports reflects strong comparative advantages – resulting from a series of strategic expansions – that enable them to expand their share of regional and national waterborne cargo traffic.
With the expansion of Container Berth 8, the Port of Savannah will offer more than 9,800 feet of linear berthing space, enjoy a 20 percent increase in capacity and become the nation’s largest single terminal container facility. Phase one of the expansion was completed in 2006; the second phase will be completed this year.
I estimate that the statewide economic impact of the deepwater ports in fiscal year 2006 includes: $55.8 billion in sales (8 percent of Georgia’s total sales); $24.8 billion in gross state product (6 percent of Georgia’s total GSP); $14.9 billion in income (5 percent of Georgia’s total personal income); 286,476 full- and part-time jobs (7 percent of Georgia’s total employment); $3.5 billion in federal taxes; $1.6 billion in state taxes; and $1.2 billion in local taxes.
Measured in the simplest and broadest possible terms, the total economic impact of the ports on Georgia’s economy is $55.8 billion. This amount represents the combined impact of the port industry and port users on output, which can be thought of as the equivalent of business revenue, sales or gross receipts.
Thus, the $55.8 billion output impact accounts for about 8 percent of Georgia’s total output in FY 2006. Of this amount, $2.8 billion (5 percent) represents the results from the ports industry and $52.9 billion (95 percent) represents the results from ports users.
Taking inflation into account, the 2006 output impact is 44 percent higher than it was in 2003.
Of the total output impact, $32.9 billion represents initial spending, or direct economic impact; and $22.8 billion is indirect and induced spending, or the re-spending (multiplier) impact. Dividing the $55.8 billion by $32.9 billion yields an average multiplier value of 1.694. On average, therefore, every dollar initially spent by either the ports industry and ports users generates an additional 69 cents for the economy.
The distribution of total economic impacts of cargo-based activity at the port facilities in Savannah and Brunswick indicates that containerized cargo accounts for 87 percent of the reported economic impacts. Breakbulk cargo accounts for 7 percent, and auto/vehicle cargo accounts for 4 percent. Liquid bulk and dry bulk cargoes account for about 2 percent and 1 percent, respectively.