Garden City Terminal has the capacity to handle up to 110,000 containers on its 1,345-acre facility. The 145 acres that Georgia Ports recently added can accommodate 11,000 container spaces.
Georgia market accommodating increased demand
Since Americans have limited in-person shopping trips to essential supplies only, logistics operators that provide to-your-door service have experienced heavy demand.
“E-commerce has become critical infrastructure,” said Dr. Walter Kemmsies, a managing director at the industrial real estate consultancy at JLL, and a member of Georgia Gov. Brian Kemp’s COVID-19 Task Force.
E-commerce relies on the ability to hold more inventory than regular retail trade. “The days of tolerating thin inventory are over. That means more inventory stored in more places, which requires more space,” Kemmsies said.
The Georgia Ports Authority is already taking steps to further support this need. To help balance the competing needs for longer-term storage and cargo fluidity, the Port of Savannah purchased 145 acres adjacent to the port and has recently brought online 6,000 TEUs of additional container stacking space.
The Authority’s investment philosophy is to maintain capacity at least 20 percent ahead of current demand.
“At the Georgia Ports Authority, we’re not just building for tomorrow or the next day,” said GPA Executive Director Griff Lynch. “We take the long view, building so that we can accommodate our customers’ growth years down the road.”
Forbes Magazine’s on April 28 reported a 129 percent year-over-year growth in U.S. & Canadian e-commerce orders as of April 21, 2020. Reflecting the increased demand were recent hiring announcements by Amazon, which is adding 100,000 employees, as well as Walmart, which is adding 150,000.
Companies that offer home delivery of food, including Domino’s Pizza and meal kit service Blue Apron, are also significantly increasing their workforce, according to a report from MarketWatch.
“Industry leaders including cargo owners and site selection professionals are clearly focused on the e-commerce opportunities in the current environment,” said GPA Chief Commercial Officer Cliff Pyron. “We estimate the Savannah area’s e-commerce position is advancing five years.”
COVID-19 is accelerating the e-commerce trend. U.S. e-commerce grew 14.9 percent in 2019, for a total of $601.75 billion in sales, following 13.6 percent growth in 2018.
E-commerce growth has also been building in Savannah, according to David Sink, a principal at Colliers International’s Savannah office.
“Many retailers are expanding locally due, in significant part, to e-commerce growth,” Sink noted. Wayfair, an online furniture and home goods retailer that built a distribution center in Savannah in November 2018, is also likely to see heavier demand.
“Both on-terminal and off, the Port of Savannah will be ready to meet that demand,” Lynch said.