Advantage: Georgia

Strategy Consultant: Lizann Grupalo, deputy commissioner of international trade at the Georgia Department of Economic Development. Photo credit: Ben Rollins

The bustling ports of Savannah and Brunswick, serving ships stacked high with brightly colored containers, are the face of Georgia’s global trade. And thanks to their East Coast location and highly touted efficiencies, the ports were able to serve their customers and handle overflow freight after a container ship hit the Francis Scott Key Bridge in the shipping channel of the Port of Baltimore in March. That incident revealed the capabilities of Georgia’s ports – which are poised to become even greater.

The accident, which killed six bridge maintenance workers when the bridge collapsed, closed the Baltimore terminal until June. Griff Lynch, president and CEO of the Georgia Ports Authority (GPA), estimates that between 10,000 and 15,000 units of cars and heavy equipment were shifted to the Port of Brunswick during Baltimore’s closure. In April alone, an additional 10,000 vehicles originally slated for Baltimore were handled at Brunswick, turning it into the terminal’s busiest month ever.

“There are not a lot of Roll-on/Roll-off (Ro/Ro) ports in the U.S.,” Lynch says, referring to ports that handle vehicular cargo. “[Without] Brunswick providing a relief valve for Baltimore, the situation could’ve been much worse. That’s why we need to stay focused on providing both the Ro/Ro and the container capacity for these types of challenges. Fifteen thousand units in one month – if you extrapolate that over one year, it becomes
a big deal.”

That’s what the Georgia ports are trying to do, create capacity. We’re preparing for growth on one hand, but we’re also saying if there’s a disruption, who’s best prepared to handle that? You should partner with us because we’re going to protect your freight.” Griff Lynch, president and CEO, Georgia Ports Authority

Investments for the Long Term

Georgia and the world economy are more reliant than ever on global trade and seamless supply chains that are susceptible to disruption, whether due to accident, conflict or natural disaster. Each disruption and corresponding solution ripples through the supply chain, affecting timetables, costs and jobs. A supply chain’s capacity to absorb the ripples is crucial.

“That’s what the Georgia ports are trying to do, create capacity,” says Lynch. “We’re preparing for growth on one hand, but we’re also saying if there’s a disruption, who’s best prepared to handle that? You should partner with us because we’re going to protect your freight.”

The GPA is investing more than $4.5 billion in port and intermodal infrastructure over the next decade to meet demand. The planned renovations address four strategic components of port operations: berth space, yard capacity, trucking gate movement and intermodal connectivity. The conversion of Ocean Terminal in Savannah from three small berths to two big ship berths will be completed by 2028. The GPA is funding a $29 million exit ramp for trucks that leads directly to U.S. Route 17 from Ocean Terminal. The Georgia Department of Transportation will raise the Talmadge Memorial Bridge over the Savannah River by 20 feet to allow for larger ships to pass. Work is expected to start in early 2025 and end by 2028. The permitting phase for the future Savannah Container Terminal on Hutchinson Island is underway. When finished, it will create three new big ship berths.

The contribution of the ports to the economic vitality of the overall logistics sector, statewide and regionally, is enormous. The 2024 Georgia Agricultural Forecast Series prepared by Jeffrey M. Humphreys, director of the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business, cites GPA’s infrastructure investments as a “factor that favors economic growth in 2024,” one that would “enable Georgia’s transportation and logistics providers to take market share from providers in other states.”

Opportunities Abound

Though it might not be dinner table conversation, global trade touches the lives of Georgians every day. Lizann Grupalo, deputy commissioner of international trade at the Georgia Department of Economic Development (GDEcD), notes that Georgia-based companies of all sizes use exports as a growth strategy, a way to expand sales that can lead to job creation and scaling up operations.

Completed Expansion: Gulfstream’s next-generation aircraft manufacturing facility. Photo credit: contributed

Completed Expansion: Gulfstream’s next-generation aircraft manufacturing facility. Photo contributed

“[Global trade] also supports indirect jobs in industries such as logistics, employing Georgians at the Georgia Ports Authority, Hartsfield-Jackson Atlanta International Airport, rail lines and other related businesses,” she wrote in an email. “It’s why international trade is part of the Department of Economic Development in Georgia. Because when combined with GDEcD’s other services, international trade creates stronger, more robust industries and opportunities for Georgians in every corner of the state.”

While U.S. exports decreased overall in 2023, Georgia exports soared to $49.7 billion, marking the state’s third year in a row of record-breaking growth. Georgia is the nation’s seventh-largest state for total trade and the 12th-largest exporter in the U.S., facilitating over $186.3 billion in total trade in 2023.

The top five exports remain the same, year to year, but their positions vary owing to each commodity’s exponential growth. In 2023, aerospace and defense products ($11.1 billion) led the list, followed by motor vehicles ($4.1 billion), turbojets, turbopropellers and gas turbines ($2.3 billion), poultry ($1.6 billion) and chemical wood pulp ($1.3 billion). The export markets occasionally change places, but in 2023 Canada ($7.6 billion) topped the list, followed by Mexico ($4.8 billion), China ($3.9 billion), Germany ($2.6 billion) and Singapore ($2.2 billion).

The scope of the trade data from Georgia’s 2023 International Trade Report, put out by GDEcD’s International Trade team, reflects the state’s diverse industries, the relationships the global relationships fostered by the economic development department and Georgia companies and in global markets, and the strength of the state’s brand as a solid place to do business.

“The combination of robust customer demand from around the world and strong support from Georgia’s state and local governments, high schools, technical colleges and universities have been key to Gulfstream’s growth and success in Savannah and Brunswick,” says Jay Neely, Gulfstream’s vice president for law and public affairs. “That combination has enabled growing our Georgia workforce to approximately 13,000 with a payroll of more than $1 billion.”

In October 2023, Gulfstream completed a strategic expansion, increasing its precision manufacturing facility by 142,000 square feet and expanding the customer support service center. The investments, which total $150 million, are expected to add 1,600 new jobs.

However, Georgia’s Department of Economic Development usually assists much smaller companies. About 87% of the businesses it works with have fewer than 20 employees. Once an export-ready company becomes a client of the international trade division at GDEcD, the company works with a manager who identifies where the company is in its trade strategy, pinpoints the next steps and determines what information or connections the team can provide. The result is a strong, long-lasting partnership between the company and the international trade manager.

“Since many of our clients are very small teams, we often become their export strategy and market-entry consultants,” Grupalo says. “The same company may continue to work with their international trade manager over multiple years and to enter more than one market.”

Export Assistance

On the other hand, if a business isn’t quite export-ready, the GDEcD can connect it with other resources within the state, such as UGA’s Small Business Development Center. The center offers international trade support for both exporting and importing and can offer one-on-one consulting on the mechanics of exporting and importing, which can be done statewide, in person or virtually.

International Business: Scott Hudson, president and chief financial officer of Hudson Pecan Company. Photo credit: David Parks

Another partner, the Southern United States Trade Association (SUSTA), offers resources to individual companies, growers and producers, and export management companies in Georgia, 14 other Southeastern states and Puerto Rico to assist them in meeting foreign buyers and promoting their brands overseas.

The organization operates as a nonprofit with funding provided by member states, private companies and the U.S. Department of Agriculture’s (USDA) Market Access Program. The department’s Foreign Agricultural Service partners with SUSTA and small businesses to share the costs of overseas marketing and promotional materials vital to building brand recognition for products, services and commodities. It’s a game-changing opportunity for small businesses without marketing budgets.

Once a business understands the basics of exporting, SUSTA has two core programs to assist them: Global Events and the 50% CostShare program. The first program includes events where growers meet foreign buyers one-on-one, outbound trade missions where companies and growers travel at significantly reduced rates and meet with matched buyers and companies, and access to hosted pavilions at trade shows around the world, also at significantly reduced rates. For example, the association might host a pavilion within the USDA pavilion at a large food show in Australia. Growers could register with SUSTA for a booth under its banner for $2,000, which would include some of their shipping, furniture, set-up and all the on-the-ground support. Purchasing that booth independently would likely cost four times that amount.

“The company can request 50% reimbursement on the booth fee even if we’ve already reduced it to $2,000,” says Danielle Coco, director of marketing and communications for SUSTA. “[That reimbursement] includes travel for two people – so flights, hotels, meals and incidentals per diem, even badge scanners, furniture rentals, renting a hotplate or hiring someone to demonstrate their product. If they have to translate marketing materials. Everything adds up. Companies can apply every year for CostShare.”

The CostShare program creates market access for people like Scott Hudson, president and chief financial officer of Hudson Pecan Company, a 150-year-old pecan-growing operation in Central Georgia. Once just 30 acres in Ocilla, the family-owned farm now operates on 2,400 noncontiguous acres in Irwin, Ben Hill, Dodge, Turner and Wilcox counties, according to Hudson.

Hudson remembers his father starting to travel to China in the late 1980s, one of the first pecan growers from the U.S. to do so.

“Our first international transaction was in 1998,” he says. “We traded a container of [the] in-shell Moneymaker [variety of] pecans for a container of Chinese black walnuts.”

Exporting to India

Now, Hudson estimates that approximately 80% of his business is exports and has been for many years. Like many Georgia growers, Hudson sends most of his pecans to China—“by a landslide,” he says. But after U.S. pecan growers were hit hard by Chinese tariffs, diversification became an even more essential element in their export strategy. Today, Hudson Pecan has customers in Israel, Dubai, Taiwan, Morocco, the Philippines and Vietnam. In the future, Hudson hopes to add emerging market India to that list. To make that happen, he sought help from professionals at Georgia’s Department of Agriculture and SUSTA.

Trade Mission: (From left to right) Brandon Harrell, chief operations officer of Southern Roots; Justin Jones, chairman of industry relations for the American Pecan Council; Shelly Jones, co-founder of Zorro Pecan; Georgia Department of Agriculture (GDA) Commissioner Tyler Harper; Sarah Cook, GDA director of business development; Mary Mikelyn Bruorton, executive director of Georgia Pecan Growers Association, and Scott Hudson of Hudson Pecan on their USDA trip to India in April. Photo credit: contributed

In response to the Chinese tariffs, the state agriculture department received a USDA Emerging Market Program grant to help identify alternative markets for Georgia commodities.

“We quickly said India is a major player,” says Sarah Cook, director of business development for the state Department of Agriculture. “Its population is the largest in the world. It’s got a rapidly growing middle class, and our federal legislators worked with trade leaders in India to reduce tariffs on pecans from 100% to 30%.”

In 2023, India was Georgia’s 12th largest export market, with exports totaling $1.09 billion. This April, Georgia Agriculture Commissioner Tyler Harper joined a USDA trade mission to India to discuss opportunities for Georgia pecans in the Indian market and gauge interest among importers, retailers, processors and consumers. The group traveling with Harper included Hudson, Cook, Justin and Shelly Jones of Zorro Pecans, Mary Mikelyn Bruorton, executive director of the Georgia Pecan Growers Association, and Bernadette Wiltz-Lang, executive director of SUSTA.

Thanks to the CostShare program, Hudson participated in the trip, which would have been prohibitively expensive. As for the response to Georgia pecans? Based on feedback from Indian nut importers, there’s potential.

“Everyone who tried pecans loved them,” Hudson says. “We’re optimistic that pecans will have a seat at the table, but it’s going to take a minute.”

“They think we’re on the cusp of something really good,” Cook says.

Georgia’s Department of Agriculture will partner with the departments of agriculture in Texas and New Mexico, the American Pecan Growers Association and the Georgia Pecan Growers Association to increase consumer awareness in India with even more in-country promotions.

Sustainability and Support

India is also a major market for one of Georgia’s top exports, forest products. In fact, Georgia is the nation’s No. 1 exporter of forest products and is the top exporter of pulp, paper and paperboard mill products, with 14.9% of the nation’s total exports. Georgia’s forest product exports can be found on nearly every continent. Wood pellets replace fossil fuels in the United Kingdom and Europe. Industrial forest products, including paper and packaging, are shipped to Canada, Mexico and South America. Cellulosic products, found in consumer goods and packaging, are primarily shipped to Asia and Europe but are found globally.

The Georgia Forestry Association (GFA) represents the interests of timber growers and manufacturers statewide and advocates for stability in the global marketplace. Of current concern is the timing of compliance with European Union deforestation regulations that go into effect in December 2024. The regulations require that companies trading any of seven commodities, including wood and wood products, meet sustainability requirements by ensuring a pristine supply chain and that products do not result from recent deforestation or forest degradation. Georgia forest product exports to the EU are in the billions annually. The GFA has asked for a two-year extension for its members to put mechanisms in place to prove they are sustainable by the new EU standards.

“We understand and applaud the EU’s efforts to control, reduce and eliminate deforestation around the world,” says Andres Villegas, GFA’s president and CEO. “It is a problem, especially in tropical places such as the Amazon and the tropical forests of Asia and Indonesia. But it’s not a threat to Georgia. The greatest threat to the Southern forest is urbanization. We will do everything to comply with their new rules, and we know we can.”

And just as the ports absorbed the ripples of freight from the Port of Baltimore, Georgia producers know that when markets adjust, they can, too – with different products to different destinations.

“If China’s hot one year, then cools off the next, maybe India picks up,” says Villegas. “We can pivot – from across a suite of products, from raw timber to highly advanced chemical products from our [forestry] sector. We’ve got a lot of opportunities to meet global demand because we’re so close to the port, and we have the logistics advantages that folks in other regions of the country don’t have. The Port of Savannah continues to be a difference-maker for the state of Georgia in many ways.”