Causes of Success at the Port of Savannah
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- Erica Pearson
The Port of Savannah is a vital attribute to Georgia’s economy and development throughout the years. But in the past recent years, its success has skyrocketed. The Port of Savannah is the fastest growing and increasingly the most important port on the east coast. The Port of Savannah specializes in the handling of container, reefer break bulk and roe roe cargoes. The Port of Savannah serves over 300 ports in about 150 different countries. The port has an import ratio of about 44.1% and an export ratio of about 55.9%, with about 88% container, about 6% general cargo, and about 6% bulk. Savannah's growth rate has it continuing to be the fastest growing port for all the major ports in the United States of America. Also, it is about three percentage points faster than the next fastest growing port. It continues to hold the fourth spot for ports in the United States. This is intriguing to me, what has caused the port of savannah to become so successful? Through my research I have figure out that it comes down to two things: Georgia Port Authority and the Savannah Economic Development Agency, and the construction of the Crossroads Business Park.
This topic is interesting to me because starting in the fall of 2015, I will be interning at the World Trade Center in Savannah. The World Trade Center of Savannah is a member of the World Trade Center Association. The World Trade Center Association is an international business association with more than 320 offices in nearly 100 countries and more than one million associated businesses. The World Trade Center of Savannah has been a member since 2011. The better knowledge I have about the past and future development of the port of savannah and how it relates to the development to Savannah, Georgia, the United States, and the world; the better I will do at my job position.
Before we talk about the port of Savannahs development, it is best to explain what the port of Savannah is. The Port of Savannah is a port located on theSavannah Riverin Georgia. The Port of Savannah is an important industrial seaport. Savannah's port has long been vital to the city's economy, and it an important port for exporting goods manufacture in the southeastern United States. The Port of Savannah is the fourth-largest and fastest growing U.S. container port. It has a convenient single-terminal design with two on-terminal Class 1 rail services, CSX and Norfolk Southern. It moves about 20 percent of the East Coast’s overseas containers. The port contains over 50 piers which are designed for multiple purposes, while others are specialized for specific types of cargo. To keep the Savannah port growing, future plans call for the deepening of the harbor.
The first big contributor to the success of the port of Savannah is the Georgia Ports Authority. The port of Savannah is owned by the Georgia Ports Authority. The Georgia Ports Authority is the administrative agency of the U.S. state of Georgia that oversees the development, maintenance and operation of two seaports and two inland ports in the state. The Georgia Ports Authority was established in 1945 and is currently headquartered in Savannah, which hosts the vast majority of Georgia's sea-based trade. In addition to trade, the Georgia Ports Authority seeks to protect the environment of coastal Georgia and to help improve the development of industry in the state. The port of savannah has become an important economic attribute along the east coast. Up to the 1990s, the port used to be dominantly focused on exports such as paper and chemicals. Savannah was a relatively small container portwith a small traffic load. The Georgia Port Authority has the responsibility to promote port and regional development. They make strategies devised to increase container imports and promote Savannah as an economic hotspot of the south east. All this growth was because of three major trends: The first concern was demographic and commercial changes. This has attracted cargo that was usually transported through the north Atlantic ports of the East Coast. The second concern is investments in port infrastructures. This allows the port to provide additional capacity and shorter transit times. The third concern was investment in real estate and lower labor costs. This would enable Savannah to position themselves as an attractive place for companies to investment in warehousing and distribution.
The logistics set up of Savannah was developed to give commercial opportunities to the inland areas. The biggest inland opportunity includes the Piedmont Atlantic region, this was helped developed by the Georgia Ports Authority. The Piedmont Atlantic region is areas like Atlanta, Charlotte, and etc. This area has a population of around 15 million. This populations and developments have been related number of logistics zones around the port. These zones were built because a set of advantages of the area. This is mostly related to the availability of land, short drayage distances, effective use of container assets and supply chain considerations. Savannah is a great example of the effect of the development of the logistics cluster can be on the local economy. For instance, Georgia has developed a significant export market of its poultry industry, which is carried in refrigerated containers. As such, this attracted large refrigerated warehouse facilities around Savannah, which accounts for 40% of American poultry exports. An important characteristic of the port’s traffic that has a notable impact is the balance between import and export cargo. For instance, while 1.43 million TEU of cargo were imported in 2013, 1.60 million TEU were exported. Maritime shipping companies find port of Savannah a good choice because there are many inbound and outbound ships and products needed to be moved. Therefore there is a lot of container rotation opportunities between inbound and outbound products and ships. Savanah also has the status of being a Foreign Trade Zone. This was helped obtained by the Georgia Ports Authority. The status of being a Foreign Trade Zone offers several operational advantages. Importers have the advantage to delay payments on their imports until they are leaving the Foreign Trade Zone and on their way to the stores or regional distribution centers. Savannah was granted Foreign Trade Zone status in 1984.
The problem of space for logistics in the Savannah area now has change from a problem of under supply to now a problem of oversupply. This is for various reasons: there is the substantial growth of the logistics sector which has attracted new investments, the large areas of land that could be found near the port is not as vast as before, etc. Currently the Georgia Ports Authority is concerned about draft issues in the Savannah harbor. But the Georgia Port Authority is still anticipating a doubling of its traffic to 6 million TEUs within a 10 year range at the Port of Savannah This is particularly because of the expansion of the Panama Canal and the dredging of the Savannah harbor. They will expand it from its current depth of 42 feet to an expected depth of 47 feet. This requires several modifications of the existing terminal facilities, particularly the Garden City Container terminal. However, the overall setup should remain relatively similar. If these traffic projections actually are true, it will likely lead to a stage of additional development of logistics and manufacturing zones because the existing ones can’t handle that capacity level
The second big contributor is the Savannah Economic Development Authority. The Savannah Economic Development Authority is an independently funded organization who works to support the economic development in Savannah and the local surrounding areas. It helps companies who are interested in relocating or expanding their offices to the Savannah area. One of the biggest contributions that the Savannah Economic Development Authority made was the construction of the Crossroads Business Park. The Crossroads Business Park is owned by the Savannah Economic Development Authority. The Crossroads Business Park was designed in 1988. It was the first logistic zones to be established in the port of Savannah area. But, it didn’t being operations until 1991. The Crossroads Business Park became the example zone as a business model and a development pattern that was copied to construct other zones in the port of Savannah area. The Crossroads Business Park is 1,661 acres facility. Inside there is about 2.7 million square feet of warehousing space located directly adjacent to Interstate 95 within the City of Savannah. It is about 6 miles away from the Garden City Container Terminal, which is the main intermodal facility of the Port of Savannah. The Crossroads Business Park was made to help the first major distribution centers in the Savannah metropolitan area. The three things they help with are inbound retail, manufacturing, and education. Its main focus about inbound retail concerns, like breaking down the cargo to individual shipments that are being sent to regional distribution centers. When it comes to manufacturing concerns the only significant manufacturer is Gulfstream Aerospace Corporation, a company that makes jets, and they have facilities in the Crossroads Business Park. The third concern which is education, to help combat the need of skills demand, particularly engineering needs, two campuses have been opened, Savannah Technical College and Georgia Institute of Technology.
The development of the Crossroads Business Park, which was made by the Savannah Economic Development Authority, was made because there was no place around to provide adequate logistics space for large freight distribution companies. In 1986, the Savannah Economic Development Authority was trying to make contacts with two large companies who were interested in putting a location in the Savannah area. However, during that time period, savannah did not have the set up for such large corporations, and the two offers fell through. Around that same time the Georgia Port Authority was telling people that due to plans to expand and the expected increase in container traffic, there would be a shortage of land to make distribution centers. But there was an urgent need to find other ways to help deal with the shortage of land, the Savannah Economic Development Authority decided to take matters into their own hands. The first thing they needed to consider was location. It then contacted developers who might be interested in developing the location. However, global and national developers were not interested in developing logistics areas in Savannah because the port traffic was less than 500,000 TEUs and Savannah was not known as a logistics hub. Many developers thought that the risk was perceived to be too high. The Savannah Economic Development Authority then decided to develop the land on its own.
The land around Savannah is about 60% of wetlands. This caused development and environmental issues on the locations and structure of the logistics zones in the area. Due to this issue, the Crossroads Business Park became the first logistics park in the United States of America to be developed over a large wetland area. After a very complex process, the Savannah Economic Development Authority received a permit to develop land on the Crossroads Business Park location. But, because of the wetlands, there is a very strict rules that companies had to abide by to ensure that they would not damage the wetlands. The Savannah Economic Development Authority offered packages to companies who located at the Crossroads Business Park. They made it so the land was completely ready for companies wanting to construct, and made it so that construction was faster than anywhere else and access to the infrastructure. For example, in 2000 Dollar Tree was able to begin construction of its distribution center 30 days after the deal with the Savannah Economic Development Authority was made. This was a great advantage for Crossroads Business Park compared to other logistic zones, they were faster and had more infrastructure to offer. The great infrastructure accessibility advantages of the Crossroads Business Park was its proximity to I95, Garden city container terminal, two railroads, and the Savannah airport. The Crossroads Business Park gave direct access to I95 by a specifically built highway interchange. I95 is the most important highway on the East Coast and is a great advantage for companies’ road accessibility to national markets. It also gives companies’ access to I16, which takes you to Atlanta. The Crossroads Business Park is within 6 miles of the Garden City Container terminal, the main container terminal of the port of Savannah. The port handled 2.9 million TEUs in 2011. It has two near dock rail terminals nearby, one owned by CSX and the other by Norfolk Southern. They transited 235,000 TEUs in 2007, about 9% of the port's traffic. Crossroads Business Park is connected by rail and remain an option for users. Although not a huge advantage, the Savannah Hilton Head International Airport is located nearby. It is a medium sized airport that handled 1.6 million passengers and 8,400 tons of cargo in 2011. Another advantage not necessarily just in the Savannah area, but in Georgia as a whole is that the state of Georgia allows gross vehicle weights of 80,000 pounds and up to 100,000 pounds if you get special permits and equipment.
In summary, the Georgia Ports Authority and the Savannah Economic Development Authority were the biggest contributors to the rapid success of the port of Savannah. Without their efforts, the port would not being doing so well. The port wouldn’t have the land for companies’ distribution centers without the Savannah economic development authority investing in the location sites and legally getting the permission to build on the wetlands. Without the Georgia Ports Authority, the infrastructure of the port of savannah area wouldn’t be as advanced as it is today. Savannah success began when the Savannah Economic Development Authority built tons of distribution warehouse complexes, initially with no tenants. But now, the distribution warehouse network around the port includes warehouses for retailers such as Target Corp., Home Depot Inc., Family Dollar Stores Inc., as well as cold storage for chickens. Which Georgia is the world’s biggest exporter for now. The authority of the Georgia Ports Authority got the port of Savannah where it is today. Together, the Georgia Port Authority and the Savannah Economic Development Authority put Savannah on top and to be the city and port to watch in these upcoming years.
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