The Port of Savannah is positioned to take a larger share of the US container market, benefiting from both domestic and international factors that support its growth.
According to Griff Lynch, executive director of the Georgia Ports Authority (GPA), the population growth and manufacturing boom in the US Southeast, coupled with changing global sourcing patterns, will drive cargo towards Savannah.
The South has experienced significant population growth, with an increase of 2.3 million people from 2020 to 2022, compared to just 92,000 in the Western US. This population growth translates into higher port volumes and increased consumer demand, making the region attractive to manufacturers.
The Port of Savannah's appeal to producers stems from the South's lower operating costs, expanding population base, and logistical advantages.
Lynch noted Savannah's direct global port-to-port connections, second only to New York-New Jersey, making it an efficient gateway for international trade.
Increased share of US container market
"In addition to people moving to the U.S. South, a growing percentage of cargo has also been shifting from the West Coast to Savannah," Lynch said.
Savannah's share of the US container market has grown from 7.8% in FY2014 to a record 11.4% in FY2023, with the port handling nearly one out of every eight loaded twenty-foot equivalent container units in the country.
Meanwhile, on a global scale, Savannah has risen in prominence, moving from 46th to 27th among container ports worldwide since 2006.
Lynch noted a trend known as the "China Plus 1" strategy, where shippers maintain manufacturing capabilities in China while diversifying their supply chains by adding secondary production locations.
Imports from China through the Port of Savannah decreased from 49% to 41% between 2018 and 2022 as manufacturers established factories in emerging markets such as Vietnam, Korea, Thailand, and India.
"The question is, who is going to be the big China Plus 1 winner?" Lynch asked. "In our view, India is well positioned to take on significant volumes," Lynch said.
He added that cargo from India favours the Suez Canal route, benefiting the US East Coast and specifically Savannah.
The Port of Savannah's extensive global connections makes it better connected to emerging markets, providing a competitive advantage in terms of reliability, cost, and transit time compared to the West Coast for deliveries from India.
Lynch said the timing of increased cargo flowing to Savannah aligns with the Georgia Ports Authority's expansion plans.
With US$1.9 billion in infrastructure projects underway, including the refurbishment of three berths and the addition of 3.5 million TEUs (twenty-foot equivalent units) of new terminal capacity, GPA noted that it is strategically investing to accommodate larger ships and meet growing demand.
"We are accelerating investments to make sure we are ready for growth," said Joel Wooten, chairman of the GPA, adding that GPA understands that those who get in front of the market shifts are going to be the winners.
