Georgia Ports Authority has emerged as a major beneficiary of a widespread shift away from West Coast ports. And port officials are moving quickly to ensure that momentum doesn’t slow.
The Port of Savannah handled record cargo volumes of 3.8 million TEUs for the fiscal year to date from July 2022 to Feb. 2023, with the latter month being the "second busiest February ever," according to a press release. In comparison, volumes dropped 43% YoY at the Port of Los Angeles in February with “lighter than average” volumes expected in the first half of 2023.
West Coast ports have faced a slew of issues in recent years, with pending labor contract negotiations between marine terminal employers and the International Longshore Warehouse Union exacerbating a move away from areas like Los Angeles. With more shippers heading toward the southeast, Georgia Ports Authority now handles one out of every 8.8 loaded twenty-foot equivalent container units in the U.S. -- its highest national market share ever.
Supply Chain Dive spoke to Griffith Lynch, executive director at Georgia Ports Authority, to discuss growth in the Southeast region and why shippers are opting to alternative ports like Savannah.
EV manufacturing and port infrastructure investments drive Southeast growth
A burgeoning number of manufacturers have established hubs in Georgia, prompting further investments from various industries.
"We've got a brand new [electric vehicle] facility being built with Hyundai, right outside, literally 15, 20 minutes from the port," Lynch said. “That's gonna bring 100,000 more containers a year to our port alone."
Georgia has become somewhat of an EV manufacturing hub. Apart from Hyundai, a number of its suppliers — including Joon Georgia, Seoyon E-Hwa, Sewon America, and Ecoplastic Corporation — have announced plans to invest in EV manufacturing facilities in the state to provide the automaker with critical parts. Collectively, the investments surpass $1 billion.
On the other hand, the Port of Savannah has leveraged infrastructure investments to increase its port capacity. Currently, the port is in the process of converting its Ocean Terminal, known for handling breakbulk cargo, to a container-only operation valued at more than $1 billion. In addition to helping increase capacity from 6 million to 7.5 million TEUs, breakbulk cargo will be shifted to the Port of Brunswick.
The port authority is also building a 300,000 square foot transload facility set to open this summer, which will be operated by third-party logistics provider NFI, Lynch said
"With all the investments we just described, we are going to be in the lead position," Lynch said. "We're going to have more capacity and demand, [and] we're going to have the ability to absorb new business without causing our customers headaches — and that's our goal."
Location, costs and shippers sentiment adds gain to Georgia’s ports
Being at the right place at the right time seems to be Georgia's anthem.
"Our location is central to the Southeast, we're the closest port to a major metropolitan area in Atlanta. We have incredible rail connectivity throughout not only the Southeast, but into the Midwest," Lynch said.
The port executive also said that several customers are tired of doing business on the West Coast. "It's very difficult. It's expensive. Our cost per foot in Savannah is lower than most places and people are looking for other options," he added.
Being the first port of call when exiting the Panama Canal, Savannah’s location is ideal for shippers who want to cut costs, Lynch said. The Panama Canal expansion in 2016 further drove growth in the Southeast region as larger cargo ships were able to pass through, prompting warehouse expansions and elevated volumes.
Savannah is home to North America's largest single-container facility, and terminals are owned directly by the Georgia Ports Authority instead of third-party operators. The set up simplifies communication with customers and helps drive more truck turns since drivers don't need to navigate a myriad of terminals.
"We have a winning model," said Lynch. "We run the port, we own the systems, we have the people that are in the cranes. And so it's easy for us to to affect how we treat a customer."
Correction: The historical ranking and fiscal year associated with Georgia Port Authority's February cargo volumes were updated to reflect accurate dates and figures.