People, cargo gravitating toward GPA market
SEA ISLAND, Ga., June 12, 2023 –Domestic and international factors are lining up for the Port of Savannah to set the pace for growth in the nation’s global container trade.
That was the message of Georgia Ports Authority Executive Director Griff Lynch Monday to the Georgia Foreign Trade Conference, held on Sea Island. He cited trends in U.S. demographics and manufacturing, as well as changes in global sourcing that will steer cargo toward Savannah.
“The population of the U.S. Southeast is growing faster than any other region of the country, and manufacturers are flocking to the area’s business-friendly states,” Lynch said. “Overseas, production is shifting to locations such as India and Vietnam that favor delivery via Savannah.”
From 2020 to 2022, the population of the U.S. South increased by 2.3 million people, according to U.S. Census data. Comparatively, the population of the Western U.S. grew by only 92,000.
“As the nation’s fastest-growing region, the South is seeing increased consumer demand, which translates into higher port volumes,” Lynch said. “The area has also seen strong growth in manufacturing, including the recent announcement of the Hyundai Metaplant. The carmaker is poised to establish a whole new ecosystem of auto manufacturing and ancillary suppliers moving cargo through Georgia’s deepwater ports.”
Lynch said producers are drawn to the Port of Savannah’s market area by the South’s lower operating costs, growing population base and logistical advantages. The Port of Savannah features the most direct global port-to-port connections of any U.S. port besides New York-New Jersey.
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. GPA’s share of the U.S. container market has expanded from 7.8 percent in Fiscal Year 2014 to a record 11.4 percent in FY2023. Georgia Ports now handles nearly one out of every eight loaded twenty-foot equivalent container units in the U.S.
China Plus 1
Among global container ports, rising trade in agriculture, retail and manufactured goods has improved Savannah’s rank from 46th to 27th worldwide since 2006. Along with Savannah’s growing prominence, Lynch said shippers are now exhibiting a “China Plus 1” policy. Under this strategy, shippers are maintaining significant production capability in China, while adding secondary manufacturing locations to diversify supply chains.
From 2018 to 2022, imports flowing from China through the Port of Savannah dipped from 49 percent of the port’s total imports to 41 percent. The shift occurred as manufacturers added factories in growing 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.”
He said cargo from India favors the Suez Canal to reach the U.S., benefiting the U.S. East Coast and Savannah.
“As the Southeastern port with the most direct global routes, Savannah is better connected to emerging markets,” said incoming GPA Board Chairman Kent Fountain. “Georgia Ports already delivers on reliability and cost. GPA will now also provide a five-day advantage on ocean transit compared to West Coast delivery from India.”
The market forces sending more cargo to Savannah come at just the time GPA is adding massive new capacity. GPA has $1.9 billion in infrastructure projects under way, which will refurbish three berths to accommodate big ships, and add 3.5 million TEUs of new annual terminal capacity.
“We are accelerating investments to make sure we are ready for growth,” said current Chairman Joel Wooten. “At GPA, we understand that those who get in front of the market shifts are going to be the winners.”
Georgia’s deepwater ports and inland barge terminals support more than 561,000 jobs throughout the state annually, and contribute $33 billion in income, $140 billion in revenue and $3.8 billion in state and local taxes to Georgia’s economy. For more information, visit gaports.com, contact GPA Manager of Media Relations Edward Fulford at email@example.com or call (912) 964-3855.