Savannah moves into second place
What’s driving the Georgia port’s growth?

by Georgia R. Byrd
for Virginia Business
September 2007

These days Savannah has a new story. Already a colorful backdrop for best-selling books and the hometown of cooking queen Paula Deen, this Southern city has earned another distinction: It’s America’s fastest growing port for container cargo.

In fact, business was so good during the past year that Savannah moved into second place as the largest container port on the East Coast, just ahead of No. 3-ranked Hampton Roads. Savannah follows New York/New Jersey and, overall, is the fourth busiest container port in the country.

Better known for its historic homes and Spanish moss-draped squares, Savannah set a new annual record in fiscal 2007, handling 2.33 million 20-foot equivalent units (TEUs) — the standard measure for cargo containers. That represents a healthy increase of 14.5 percent over the previous year. In comparison, Virginia’s marine terminals at Hampton Roads handled 2.05 million TEUs in fiscal 2007, an increase of 0.5 percent over 2006. Charleston reported 1.88 million TEUs for the same period, a decline of 4.8 percent.

For years now, Virginia, Charleston and Savannah have vied as the top contenders for second place on the East Coast behind New York. But Savannah — in fourth place in 2005 — pulled ahead two notches during 2006-07 on the wind of a 10-year strategic plan and $1.2 billion targeted for capital investments.

At the helm of the port’s growth is Doug J. Marchand. He took over as executive director of the Georgia Ports Authority in 1994. Since then, he and a 13-member board have won the support of the state’s governors and legislature. “Investments the state of Georgia and the authority have made in our facilities are paying huge dividends for our customers,” says Marchand. “We are setting new records, exceeding service levels and moving forward with an aggressive, $1 billion capital improvement plan to grow our business to new highs and create more jobs and opportunities for the citizens of Georgia.”

The investments are helping the port city respond to Americans’ growing appetite for global goods. For instance, GPA added the first of two new water services this summer: one via the Suez Canal and one via the Panama Canal. With a transit time of 22 days from Hong Kong, the East Coast Express offers the fastest available service to the U.S. East Coast. A weekly Suez Express (SZX) will begin this month, sending increased capacity through Savannah to and from India and Southeast Asia. “Georgia has targeted the Asian market. They went after that market, and they’re getting that market,” notes Rep. Jack Kingston (R-Ga.) whose congressional district includes the port.

Also christened this summer was a $109 million project that includes the largest single-terminal container facility on the East and Gulf coasts. Funded by the state’s General Assembly over four years, Container Berth 8 includes a 1,200-foot dock that will bring the linear berthing space available at Garden City’s terminal to 8,800 feet. It’s expected to increase capacity by 20 percent and to provide thousands of new jobs.

Fifteen rubber-tired gantry cranes — used to stack cargo containers onto trains — went into operation this summer, and four super-size Panamax cranes are scheduled for delivery during the first half of 2008 at a cost of $57.2 million. To avoid the traffic congestion common at other ports, Georgia officials are making improvements to ensure easy access. The port authority plans to add three additional interchange lanes at the container gates to ease truck congestion for Garden City. In July, it also added 60 positions at the terminal, for a 20 percent increase in operating personnel.

Two rail providers (CSX and Norfolk Southern) serve Savannah’s port, and nearby Interstates 95 and 20 provide links to more than 100 trucking companies nearby. With a solid transportation network, retailers are choosing Savannah and nearby outlying areas for massive distribution centers. In the last 10 years, nearly 20 companies — from Pier I to Target and The Home Depot — have built nearly 15 million square feet of warehouse space within two to 30 miles of Savannah’s port. 

“It [GPA’s growth] has much more to do with a strategy of attracting the customer — retailers to locate distribution centers near our port.  If you locate the customer, the business will follow,” says Robert C. Morris, director of external affairs for the GPA.

So what’s ahead for Savannah’s future? Next year, the port plans to start a harbor deepening project to accommodate today’s large oceangoing ships. By 2012, the present mean low water level of 42 feet will be boosted to 48 feet. In comparison, the harbor channel at the port of Hampton Roads is 50 feet deep.

The real competition, says Morris, isn’t between East Coast ports. “While we definitely have rivalries and there are inter-port competitions, the big competitor is the West Coast ports.” Morris says Savannah can’t do it alone. “Ships today average 3,500 to 8,000 containers per ship. You need at least three ports of call on the East Coast to handle the business and attract the vessel streams.”

In other words, everyone’s in this game together. Or as Savannah’s favorite cook, Paula Deen, might say, “There’s plenty of room in the kitchen.”