All About Business
Georgia’s ports have accounted for 10,000 new jobs throughout the state in the last two years
From the mountains of the north through bustling Atlanta to the swamps of the south, nothing so connects Georgians to commerce like the deepwater ports of the coast. Nearly 300,000 of the state’s workers owe their jobs to those ports and the goods that travel through them, and it’s almost a sure bet that every home and business in the state owns a product that was unloaded from a foreign ship at the Port of Savannah, and there may even be a car or two in the garage that was driven off a ship from Asia or Europe.
Georgia’s coastal ports and its inland barge terminals combine to produce $61.7 billion in annual revenues, $2.6 billion in state and local taxes and a $15.5-billion annual income for the Georgia Ports Authority (GPA), an independent, board-led, self-sustaining management entity. In the brightest of times, such numbers would be prized by the state’s economic developers – in a darkened economy with double-digit unemployment, they seem like a godsend.
“We’re extremely proud. Even in the last two years in the depth of the recession, Georgia’s ports have added 10,000 jobs throughout the state of Georgia,” says Curtis Foltz, executive director of the GPA. “I know Georgia is facing a tough time, but I can say without the support of the ports it would have been much tougher.” Not much room for argument there.
Earlier this year, Foltz was in Atlanta to make his second State of the Ports address in two days, after delivering the first in Savannah 24 hours earlier. A capacity crowd of business leaders from Metro Atlanta area filled the main room at Georgia Tech’s Conference Center. If it seemed he was on a campaign swing, he was. Metro Atlanta’s contribution to port traffic totaled $8 billion, said Foltz, quoting a value report for FY 2010 identifying Fulton County as the major port player with $3.5 billion of the total.
Foltz told the crowd that the ports were responsible for 3,800 new jobs created in the Metro Atlanta area in 2010 as six new companies, all ports customers, located in that region. While Atlanta was identified by Foltz as a major player in export and import business at the ports, it is also the seat of government and the center of political power for the state, and he was drumming up all the support he could get to help quiet some troubling waters lapping at the entrance to his highly successful Savannah deepwater port, one that soon will not be deep enough.
With the completion date of massive improvements at the Panama Canal expected to come in 2014, the GPA is still awaiting final approval of the Savannah Harbor Expansion Project (SHEP), a plan to take the harbor from a depth of 42 feet to 48 feet, a critical step toward welcoming the larger vessels now plying the oceans; in three years these ships will be able to pass through the Canal. Some of the newer, larger vessels will be able to carry up to three times the cargo on ships now using the Port of Savannah.
Although Congress approved the SHEP plan for the port in 1999, the impact study period is in its 12th year, with several necessary steps remaining for the final go-ahead from the U.S. Army Corps of Engineers and four federal agencies. That final approval was originally expected to come in mid-2011, but the projected time set for dredging is dragging.
“I think everyone is still comfortable that 12 years into it and $38 million [spent], the Corps has used its expertise and done their due diligence to ensure that everything humanly possible has been done to mitigate the effects of the deepening,” Foltz says during an interview before his Atlanta address.
“Because of the size and magnitude of this project, what we are trying to impress on everyone is that the nation’s interest in commerce, both imports and exports, can only be served through our state most efficiently if we’ve got the deeper water when the Panama Canal is expanded.”
The cost of the harbor deepening project is expected to be about $600 million, with the federal government absorbing two-thirds of that. “So, as we look to the next four years, in not only getting the project approved and then funded, we want to make sure we’ve got all the support and the voices in the state of Georgia behind us … because it is a priority for economic sustainability and economic growth throughout the state.”
Foltz also makes the case that speeding SHEP along can figure in improving America’s balance of trade deficit. “In a normal year, 70 percent of goods are shipped into the U.S., with about 30 percent shipped out,” he says, “Our ports last year were imbalanced on the export side. We actually shipped more loaded activity out of our ports than we did into our ports.”
FY 2010 figures show Georgia exports improved to 54 percent of the total port activity, with imports at 46 percent, according to GPA data. Interestingly, three of the top five container commodities shipped from Savannah’s Garden City Terminal are forestry and agriculture commodities; all of the top five refrigerated exports are agriculture commodities.
Continued improvements in the infrastructure at the ports have kept them growing, says Alec Poitevint II, a Decatur County businessman and chairman of the GPA board, who accompanied Foltz to the Atlanta State of the Ports meeting, where he introduced the authority’s executive director. “The question is, when you have a downturn, what do you do about it?” he asks. “I think in the case of the ports, we continue with this [infrastructure] im-provement, because that’s how we remain competitive. I think that’s the reason [port users] are staying with us.” And that repeat business is an important part of the ports’ traffic.
The Port of Savannah’s standard cargo traffic is in containers called TEUs, or twenty-foot equivalent units, and 2.63 million of them traveled through the ports system in FY 2010, an increase of almost 10 percent from the previous fiscal year.
The Port of Brunswick traffic is largely agricultural products and automobiles, and the volume of both has been increasing for years, due in large part to consistent upgrades at that facility, says Poitevint.
“The mix of agriculture and automobiles we have in Brunswick, along with the container-driven part in Savannah, gives us a very wide range of services to offer in a very efficient manner,” Poitevint says.
GPA’s executive director and his staff continuously scan Georgia’s business landscape to detect trends that may offer opportunities for the ports. “Our board expects us to run like a private sector business,” Foltz says. “They expect us to work closely with economic development groups throughout the state.” And when market trends are spotted that could lead to increased sales, Foltz must be ready to meet the needs of his clients.
In Brunswick, for instance, where 350,000 automobiles came into or out of the port last year, growth in that traffic is calling for expanded rail storage capacity to ensure the vehicles get to their dealerships in a timely fashion. And the overseas demand for wood-based fuel products is being felt at the Brunswick port.
“We are currently under review and in discussion with several different private entities about expanding and modernizing our marine port terminal facility in Brunswick to handle the growing trade of wood pellets and wood chips for the strong biofuel export market,” Foltz says. “Those products are coming from the large waste stock we have in forest products.”
FY 2010 was a record year at the Port of Brunswick bulk handling facility, with more than a million tons of agricultural products passing through, most of that for export. And the growth of container traffic at Savannah’s port has GPA’s board chair in a data-sharing mood. “Think about this: One of every nine loaded containers leaving America leaves out of Savannah. That is a big number,” Poitevint says. There are some other big numbers leading the ports authorities in Georgia and South Carolina to start looking at a marriage.
Draw a line from Chicago to Dallas and you will find 70 percent of U.S. consumers living east of it, according to promotional data from the GPA. The Port of Savannah is most strategically located to reach 44 percent of the country’s population. Add to that the increase in port traffic predicted for the so-called Post-Panamax era after the new and improved Panama Canal opens its locks in 2014, and the most promising point for East Coast shipping lies along the Savannah River.
To capitalize on the convergence of location and history, the governors of Georgia and South Carolina signed intergovernmental agreements in 2008 to move towards a goal of jointly operating a port in Jasper County on the South Carolina side of the river. A 1,500-acre site has been purchased for the facility to be called the Jasper Ocean Terminal. The project is in the early stages of a timeline that could stretch to 20 years before the first ship is welcomed to the new port.
“The Jasper port is a very solid project,” says Foltz. “They are currently doing commercial viability studies to help support the long-term need for the project. Initial engineering designs have been completed. It’s all moving forward, as it was expected to, on its current timeline. I think it is recognized, certainly by the Georgia [Congressional] delegation, that long term, a port in that region helps to support that area of the country’s demographic growth.”
While awaiting approval for the deepening of the harbor at Savannah, the GPA has not been idle. In the last two years, four new Super Post-Panamax ship-to-shore cranes have been installed, and 14 new rubber-tired gantry cranes began operating in the last fiscal year, with 11 more to come in FY 2011. Four ship berths have been deepened to 48 feet and new portside refrigeration units have been installed, primarily to serve Georgia’s huge poultry industry, an important exporting client.
It’s all about being ready for business when it comes, and Georgia is all about business, period, Foltz says. “I’ve only been with the [GPA] for six years,” he says. “But I have been in this industry for almost 30 years and have worked in most [port] states throughout the U.S. I have never been part of a state that had the solidarity this state has in the long-term vision and planning and all the logistical support the ports receive for the veins that reach out through the state in rail and road connectivity. It is a business philosophy that says we’re going to support commerce in general, because that’s going to bring jobs and growth to us.”