As the port expansion finally moves forward, the Georgia Ports Authority is seeing record growth.
First proposed more than 20 years ago, the Savannah Harbor Expansion Project has been studied and delayed more times over the past two decades than anyone can count. So it’s no surprise that the big news at the Georgia Ports Authority (GPA) this year has been the approval of the massive project to deepen the Savannah River and harbor to expand the Port of Savannah’s capacity.
The Savannah Harbor Expansion Project (SHEP) finally got the go-ahead in October – 15 years after it first received a congressional OK in 1999 – when the U.S. Army Corps of Engineers, the Georgia Department of Transportation and the GPA signed a Project Partnership Agreement (PPA). After years of studies, delays and lawsuits that both stalled the project and pushed projected costs sky high, construction was scheduled to begin by the end of 2014 on what has been called the most critical infrastructure development project in Georgia in decades.
In announcing the signing of the PPA, Gov. Nathan Deal called the project “vitally important for economic development and job creation not only in the Southeast, but nationally as well.” It will enable the Port of Savannah to accommodate ever-larger container ships holding up to 10,000 steel containers each that are arriving from Asia via the expanded Panama Canal. The extra depth will allow these larger ships to carry an additional 3,600 cargo containers per transit, an increase of 78 percent.
A Record Year for Georgia Ports
But SHEP is not the only GPA story worth telling – far from it. The GPA enjoyed a record year in 2014, seeing increases over 2013 in total tonnage and container traffic. The ports moved 29.4 million tons of cargo – up 8 percent – and 3.14 million 20-foot equivalent container units (TEUs), up 6.3 percent.
In addition, the GPA moved more than 700,000 units of autos and machinery through the Port of Brunswick in 2014, an increase of 10 percent. More than 2.6 million tons of breakbulk cargo was moved through the ports last year, up 5.2 percent, while more than 2.7 million tons of bulk cargo was moved, up 8.4 percent. To accommodate the growth, GPA undertook a 2.7-million-square-foot industrial expansion.
The GPA welcomed at least 10 new companies that began shipping from the coast in 2014, including Dynacraft Bikes, Trident Seafood, Ballard Pacific, St. George Warehouse and Bed, Bath and Beyond.
“Record growth at our ports, coupled with strong statewide pro-business leadership, clearly played a pivotal role in landing these new companies and related jobs,” said Georgia Ports Authority Executive Director Curtis Foltz during the 2014 State of the Port address in Savannah in September. He noted that in 2014, there were 1,900 new port-related jobs and countless new positions created throughout the related transportation and logistics industries.
The ports of Savannah and Brunswick contribute $39 billion a year to the Georgia economy, according to the University of Georgia, and 100,000 jobs in metro Atlanta alone are related to the port. The Port of Savannah is the fourth-busiest container port in the country and the second busiest on the East Coast, while the Port of Brunswick is the No. 1 port in the country for automobile imports.
In his 2014 Brunswick State of the Port address in October, Foltz reported 11.6 percent growth in total tonnage at the Port of Brunswick to more than 3.4 million tons of cargo, and a record number of auto and machinery units moved over Brunswick docks last year. For the third year in a row, the GPA achieved a record total for auto and machinery units with a 10 percent improvement over 2013.
The Port of Brunswick added Honda as an importer last year, and there were also expansions in the number of vehicles moved for other automakers including Audi, Bentley, GM, Mercedes-Benz, Nissan, Porsche and Rolls-Royce. To accommodate the strong anticipated growth in roll-on/roll-off units, there are opportunities for expansion on Colonel’s Island. There are currently 696 acres in use on the north side of the island, and 742 acres are permitted for expansion on the south side. “The Port of Brunswick is in an excellent position to significantly expand capacity and grow its market share,” Foltz says.
While Foltz is proud of the records set by the GPA last year in terms of volume and traffic moved through the ports, he says that numbers don’t really tell the story of the impact of Georgia ports on the state and the region. “Whenever we announce a new record in container volume or number of autos moved through the ports, this means that we’re adding jobs to the Georgia economy,” he says. “Everything we do is about bringing more business and jobs to Georgia and the Southeast.”
A Mind-Boggling Project
Any review of the year at the Georgia Ports Authority, however, must start with the Savannah Harbor Expansion Project. The size, scope, complexity and cost of the project are truly mind-boggling: Forty-one miles of the Savannah River will be dredged from the Garden City Terminal into the Atlantic Ocean to deepen the river by five feet – from 42 to 47 feet. In the process, 24 million cubic yards of river mud will be dredged – enough mud to fill the Georgia Dome seven times.
The total cost of the five-year project has been pegged at $706 million, although half of this will go toward mitigating potential environmental damage, including threats to endangered plants and animals like sturgeon and possible negative effects on the drinking water in Savannah. Georgia taxpayers have contributed $266 million toward the project so far, the GPA will contribute $34 million, and the Georgia Department of Transportation will donate $10 million worth of land. Washington has pledged to kick in the remaining $400 million.
Some studies indicate that the project will result in numerous economic benefits for Georgia and the Southeast. According to the Army Corps of Engineers, for example, each dollar spent on the project will result in $5.50 in economic benefits, or $174 million in economic benefits each year. “This is an almost unheard of cost-to-benefit ratio for a project of this magnitude,” says Foltz. Retailers like The Home Deport and Target that move huge volumes of goods through the ports, meanwhile, stand to benefit from both time and money savings as a result of the project.
“Anything you buy at a retailer that was made overseas probably arrived through a Georgia port,” he says.
On the exporting side, products leaving the Georgia ports run the gamut from poultry, pine trees, kaolin clay and peanuts to carpet manufactured in Dalton and automobiles manufactured in Georgia, Alabama and Tennessee. A relatively new export product is wood pellets that are exported to Europe and used in the manufacture of biofuels.
About 20 percent of The Home Depot’s import volume – roughly 25,000 containers a year – comes into the U.S. through Savannah, says Michelle Livingstone, vice president of transportation for The Home Depot. “So the Port of Savannah is very important to us,” she says. “We’re very excited about and supportive of the Savannah Harbor Expansion Project – it has been a long time coming.”
Livingstone says a deeper port provides The Home Deport with more shipping options. “We operate a four-corner strategy when it comes to imports, bringing goods into the U.S. through New York-New Jersey, Seattle-Tacoma, Los Angeles-Long Beach and Savannah,” she explains. “The more options we have for importing goods into the U.S., the better and more efficiently we can flow products through our supply chain.”
But big retailers aren’t the only businesses that stand to benefit from the harbor expansion project. For longshoremen, crane operators and tugboat captains, for example, the harbor expansion means the continued security of a living made on the waterfront. For distribution center managers, the cost savings associated with larger, more efficient vessels means they can expand their operations in Savannah. For small business owners, the ports provide an efficient link to global sourcing. And the project could result in cost savings between 20 percent and 40 percent for farmers, helping make their products more competitive on the global market.
“Improving the Savannah Harbor is vitally important to the continued economic health of this state and region,” Deal said at the 2014 State of the Port program in Savannah. “By accommodating larger, more efficient vessels, the deepening will reduce shipping costs for American businesses by $213 million a year.”
Some industry observers believe that the Savannah Harbor Expansion Project is an indication that the Port of Savannah is ramping up to challenge New York as the dominant port on the East Coast. Some other East Coast ports are in the study and planning stages of deepening projects, but Savannah is the first port in the Southeast to receive federal approval to start digging. “We wouldn’t be in the ballgame without this project,” says Foltz.
Infrastructure and Sustainability Initiatives
The GPA is also working to ensure its infrastructure can accommodate continued growth through a $136-million capital improvement plan. The goal is to more than double the Port of Savannah’s current throughput of just over 3 million TEUs annually to more than 6.5 million TEUs a year within 10 years on the existing terminal footprint.
To reach that goal, the GPA plans to grow the number of ship-to-shore cranes at the port from 22 to 30 and the number of electric rubber tire gantry (or RTG) cranes from 116 to 169.
According to GPA Board Chairman James Walters, the RTG cranes are part of the GPAs sustainability efforts, as they cut diesel fuel consumption by 95 percent, reducing harmful carbon emissions and saving fuel. “These cranes are the first of their kind in North America,” Walters notes, created specifically for the GPA but now used at ports all over the world.
“We are doing all we can to lessen our dependence on diesel fuel,” adds Foltz. The diesel fuel that is used is treated with additives to make it cleaner and more efficient, saving nearly 6 million gallons of fuel a year. The GPA is also now using electric refrigerated racking systems instead of systems powered by noxious and noisy diesel generators.
In November, the GPA also approved construction of the $10.2-million Gate 8 project, which will serve as the third major truck interchange at Garden City Terminal in Savannah. The project is expected to be completed by the end of this year.
In addition, the GPA has implemented LEED-certified construction that adheres to U.S. Green Building Council standards. This has resulted in water conservation and electricity savings and the creation of natural wetlands through the redirection of stormwater runoff through a series of natural treatment ponds.
At Savannah’s Garden City Terminal, more than 9 acres of wetlands are protected from development. The landscape provides another use as well – naturally filtering runoff to remove pollutants while also providing flood control and habitat protection.
Foltz acknowledges that four or five years ago, the GPA was not where it needed to be in terms of environmental responsibility. “However, sustainability is part of our DNA now – it’s part of the culture we’ve created here,” he says. “Environmental considerations are part of everything we do and every decision we make.”
From Trucks to Rail
Another goal of the GPA is to shift more of the cargo leaving the ports from trucks to rail. There are both environmental and logistical benefits to this. “We see an increasing overall awareness that, on a per-mile basis, trucking is just less efficient than pulling a locomotive or a single train,” says Foltz.
“Strategically, we have worked for many years to [grow rail cargo], and our customers are well positioned with intermodal rail on terminal,” he says. “On the eastern half, Norfolk Southern and CSX both have intermodal facilities, and we’re the only terminal with both on the East Coast.
“If truck transportation is something that we can avoid, then we’d like to,” says Foltz. “That’s why as we grow our business, we make every effort we can to convert truck to rail, which is a far better environmental choice than truck activity on a per-mile basis, based on the reduction in diesel consumption.”
In the meantime, to make truck transportation as efficient as possible, the Jimmy Deloach Parkway Extension will be completed in the summer of 2016. The extension will connect the Port of Savannah with both Interstate 95 and Interstate 16. It will allow trucks to turn off of the interstates directly into the port without any stop lights, resulting in an eight-minute reduction in turn times.
For The Home Depot, Livingstone says the GPA plays a critical role in the company’s supply chain strategies. “So it’s important to us that the Port of Savannah remains among the best on the East Coast. We don’t anticipate any major shifts in our shipping patterns anytime soon – the Port of Savannah will be our long-term business partner.”
Count them among the many – the Port of Savannah and Brunswick both show no signs of stopping soon, and that’s a good sign for Georgia.