Port completes Savannah River Deepening Project
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SAVANNAH, GA – After decades of political wrangling and environmental roadblocks and nearly seven years of dredging mud from the bottom of the river, one of Georgia’s most anticipated economic development projects – deepening up close billion dollar Savannah River channel – is finally complete.
The 38-mile deepening works of narrow, winding 5-foot river channel were designed to make importing and exporting goods cheaper and more efficient aboard ever-larger cargo ships. The deepening will also help Savannah, now the third-busiest port in the United States, stay ahead of expansions by competing ports on the East Coast, port officials say.
Economists say the economic impact of the Port of Savannah ripples throughout the state. Logistics jobs related to the Port of Savannah have nearly doubled statewide in the past two decades. But a lot of work remains to be done for Georgia to maintain its competitive edge.
— Ports of Georgia (@GaPorts) April 6, 2022
Billions of new infrastructure projects – some in progress and others in the pipeline – are in the works. Georgia Ports Authority, the government entity that operates the Savannah facility, wants to increase its capacity by more than a quarter, from 7.5 million shipping containers a year today to 9.5 million a year over the of the next three years.
“It’s for our continued economic well-being,” said Joel Wooten, chairman of the board. “Georgia continues to have incredible economic development, and the ports need to have the capacity for us to be part of it.”
Companies such as Relish, a small seller of high-end tableware, rely on the Port of Savannah to get their products to customers on time.
A few years ago, Relish transitioned from a Chinese supplier to a family-run factory in Guatemala for better reliability and faster turnaround. But they still encountered problems.
Not because of the distance, but because the shipping containers broke down after they were unloaded, said Susan Peterson, co-owner of the Rome, Georgia-based company.
“We used the ports of Miami and Houston,” she said, “and sometimes a container would stay there for three days.”
For a small business, delays can be fatal. And the grumbling has gotten significantly worse over the past year, she said.
“It wasn’t unusual to have a container sitting here for a month,” she said. “It was maddening.”
Routing everything through Savannah has virtually eliminated those issues, she said.
“We’re doing our best now to supply everything through Savannah,” Peterson said.
The Port of Savannah is a conduit for companies exporting overseas, especially Georgian kaolin, timber, and poultry products en route to Asia. Yet the bulk of shipments go to US companies that import components that they incorporate into US-made products, as well as finished goods such as electronics, toys, apparel and furniture, that are assembled overseas and sold directly to US consumers.
In 2019, nearly half a million jobs existed thanks to ports, up about 80% from 276,000 in 2003, said Jeff Humphreys, director of the Selig Center for Growth at the University of Georgia. .
During that period, the number of all jobs in the state increased by 19%, Humphreys said.
“So port-related jobs grew four times faster than the rest of jobs in Georgia,” he said.
Employment in the Savannah area also grew, rising 39% as the Savannah metropolitan economy more than doubled, according to federal data.
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As the state and national political scene has become increasingly contentious, support for Georgian ports has historically been bipartisan.
Plans to expand the Panama Canal to allow transit of larger ships made it imperative to deepen the Savannah River to accommodate ships. Negotiations with the federal government to fund it remained in political purgatory for years.
But a bipartisan effort that started under the then government. Nathan Deal helped secure crucial federal funding in 2014. That year, state and federal officials reached a $706 million deal to fund environmental, engineering, and construction projects to deepen the river.
To bolster its case, Georgia raised $266 million of its own funding.
To show their bipartisan friendship, Deal and then-Atlanta Mayor Kasim Reed showed up together at meetings with Obama administration officials to personally sell the project.
“And we sat in the hall,” Reed recalled, “and the poor planner thought she had made a mistake.”
Deal wanted to prove the project was “ready to dredge” to revive deepening after two decades of political wrangling, bureaucratic hurdles and environmental issues.
“That’s more jobs for Georgian families and more year-over-year improvements in the metrics that matter to businesses in our region,” Deal said. “Coupled with Georgia’s investments in infrastructure, Georgia has the ability to export and import around the world.
Yet the Obama administration offered to allocate far less than the port boosters wanted. Georgian leaders persuaded federal lawmakers to get the rest of the money under the Trump administration.
Dredging costs eventually soared to nearly a billion dollars, including hundreds of millions of dollars to protect fish and other wildlife and freshwater wetlands. Systems have been designed to pump oxygen into the river water to help fish breathe. Crews even removed the remains of the CSS Georgia, a sunken Civil War battleship.
The Army Corps of Engineers projected in 2014 that every dollar spent on the project would yield $5.50 in economic benefits to the nation. And the work produced benefits for major shippers and retailers, who saved money and earned higher profits through more efficient shipping. Experts say some savings have also been passed on to consumers in the form of lower prices for goods.
Deepening work began in September 2015. Even amid the dredging, the Port of Savannah has seen container traffic increase by more than 50% from 2016 to 2021 as shippers seek access to Sun Belt markets.
To accommodate this growth, the Georgia Ports Authority built a new intermodal yard to put boxes on trains and away from freeways. The authority also established an inland rail terminal in northwest Georgia and opened six “pop-up” storage yards that were used to store containers, reducing congestion at the Port of Savannah.
Another inland rail terminal is under construction near Gainesville.
Last month, the authority announced plans to expand storage space for an additional 1 million containers per year in Savannah, an increase of more than 15%.
Unlike ports near New York and Los Angeles, Savannah is near a huge amount of undeveloped land. This provides convenient and relatively inexpensive locations for warehouses and distribution centers, said economist Walter Kemmsies, managing partner of the Kemmsies Group in Savannah. As a result, distribution centers have sprung up around the port.
Growth at ports spurs tax revenue and business expansion, said economist Michael Toma of Georgia Southern University.
“There is an almost one-to-one correlation between container growth and warehouse and distribution center growth,” he said.
The growth is creating many kinds of jobs, not just in logistics and not just near Savannah. Growing businesses need accountants, lawyers, marketers and tech-savvy workers, he said.
“And I would expect a lot of white-collar jobs to end up in Atlanta,” Toma said.
Even inland “ports” — where containers are stored, sorted and dispersed — can sow growth, said Pat Wilson, the state’s economic development commissioner.
Seven separate projects with more than 750 jobs have sprung up around the Murray County facility in northwest Georgia, he said.
“From our perspective, in trying to grow jobs and investment across the state, the port [of Savannah] had the biggest impact of all factors,” Wilson said.
GPA plans to use cash flow from operations and bonds to fund decades of continued expansion.
But the return on this investment depends on a rising tide of global trade. And after years of growing tensions between the United States and China, the Russian invasion of Ukraine has given arguments to those who argue that the seven-decade trend of trade globalization could be reversed.
It’s a threat, said Georgia Southern economist Toma, but the expansion so far has paid off and it’s still a good bet.
Late last year, America’s supply chain buckled as the economy rebounded from the pandemic, but there were pinch points such as a lack of truck drivers and crane operators in several west coast ports. Ports such as Long Beach and Los Angeles have seen dozens of ships waiting to dock.
Savannah also experienced a backlog of ships, but nothing like its west coast rivals.
Deepening the channel and investing additional billions will help secure a supply chain that many took for granted before the pandemic, officials say.
“Over the past 18 months, we have seen the clear importance of the global supply chain to a healthy and thriving economy,” said former state economic development commissioner Chris Cummiskey.