Manufacturers are moving to the US Southeast along with a host of people seeking work and a warmer climate. As a result, that part of the country is now among the fastest-growing regions in the United States.
With that comes an opportunity for international trade. Take the Port of Savannah, Georgia, for example. During a recent telephone interview, Georgia Ports Authority (GPA) executive director Curtis Foltz described the start of the year as “remarkable.”
“It’s been an extremely strong start to the year,” Foltz said.
Container volumes for GPA’s fiscal year 2015, which runs July through June, are up about 13.5% for the first six months. “This is almost three times what we had forecasted,” Foltz exclaims.
Although the Port of Savannah continues to be the recipient of 38 weekly global carrier services, Foltz expects that to change due to consolidation and new larger vessels being deployed by steamship companies.
“It is a moving target for sure,” says Foltz. “This year we will see the transformation of the 2M with Maersk and MSC coming together by independently consolidating deployments.”
Add to this the commencement of the Ocean Three Alliance (CMA CGM, UASC and China Shipping) and possible affects on the CKYH and G6 alliances. Consequently, Foltz anticipates some changes as steamship lines review their rotations and services to all major ports in the United States. He indicates, however, that in GPA’s communications with these alliance groups, Savannah remains on the radar screen and will be an important gateway for all four consortia once they are fully in place.
“It’s hard to say how many weekly services we will have at the end of the year,” he said. “But I can say with confidence that we will have greater capacity and allocations coming to our port as the services are put together, regardless of the number of vessel calls.”
The Port of Charleston is also experiencing a boom. In December, the South Carolina Ports Authority (SCPA) reported another month of double-digit container growth, with fiscal year-to-date volumes up 13% year over year.
The port handled 144,218 twenty-foot equivalent units (teus) in November, an increase of 8% over the same month last year. Fiscal year-to-date teu volumes are 11% ahead of plan, with 777,566 teus handled since July.
“As measured year-over-year, our monthly pier container volume has seen nine consecutive months of double-digit growth,” said SCPA president and CEO Jim Newsome. “This broad-based growth reflects strength of both imports and exports, although we will likely see volumes settle over the next few months.”
Newsome sees a particular boom in exports. “The resurgence in manufacturing in South Carolina and the region, coupled with worldwide demand for agriculture products, are boosting export volumes,” he says. In fact, the SCPA expects export volumes to outpace imports by the end of the decade.
The wild card, of course, is exchange rates and the impact significantly lower oil prices will have on the US and global economy.
“As long as the US dollar doesn’t get too strong, diminishing energy prices should bode well for our exports,” Foltz says.
In fact, over the next decade, GPA anticipates container volumes at the Port of Savannah’s Garden City terminal to approach 4.5 million to 5 million teus, and reach approximately 80% of the designed maximum throughput of 6.5 million teus. “This is a practical level to begin introducing new terminal capacity,” Foltz says.
Given the volume of growth ongoing in the South, officials see the eventual need for a new container terminal. While both the Port of Savannah and Port of Charleston are undergoing efforts to reconfigure and create additional space to handle increased container traffic, executives there agree that efforts must begin now to get the wheels churning and for the development of a new terminal – an effort that can take some 20 years or longer to plan.
Remarkably, while SCPA and GPA are keen rivals for steamship line service, both states entered into an agreement in 2008 to collaborate on the formation of a bi-state venture in Jasper County, South Carolina.
“We are currently working with Georgia through the Joint Project Office to plan and file permits for the Jasper Ocean Terminal and the additional harbor improvements necessary for the facility,” Newsome says. “Permits will be filed as soon as late 2015, or once SCPA receives the Chief’s Report on our harbor deepening project.”
While SCPA believes there will be market demand for this terminal by approximately 2030-2035, Newsome points out that the project will require a further deepening of the Savannah River to the western edge of the Jasper Terminal to handle the size of vessels anticipated. “This joint development will likely drive the long-term need for closer commercial cooperation between the ports,” he says.
The large, 607-hectare terminal represents a net US$5 billion investment. Once completed, it would become one of the largest terminals built in North America, capable of handling 550,000 to 1.1 million teus in its first decade of operation.
While a commission is in place representing South Carolina and Georgia, and initial design features, economic modeling, capacity studies, and master planning are in motion, the actual operating and reporting structure has yet to be determined.
“However, we feel the creation of a bi-state authority to oversee a future Jasper Port is not only doable but a reality that will occur,” Foltz remarks. The reason: above-market growth in the Southeast that will allow for balanced trade or even export-dominant trade.
By Karen E Thuermer
Correspondent | Washington