The Georgia Ports Authority’s director of external affairs, Robert Morris, sees potential for future foreign investment in Savannah’s distribution centers because of increased export activity and trade capacity at the port.
Coastal Georgia has attracted major retailers, like Home Depot Inc. and Wal-Mart Stores Inc., to transport their overseas cargo through the Port of Savannah by providing incentives to build warehouses and distribution centers near the port. While the current model is for U.S. importers to build warehouse space to store and distribute products coming in from overseas, international investors, too, may be attracted to this business model, Mr. Morris said.
“There is a continued need for distribution center space and ample room to grow and build that piece of our business. What we’re hearing right now is from American retailers, but of course, that is just the tip of the iceberg,” Mr. Morris told GlobalAtlanta. “We’re going to see a lot more interest in investment, and maybe foreign investment, as Savannah’s notoriety continues to grow and the Georgia ports’ efficiency and economies of scale begin to improve.”
The Savannah port has been dubbed as a retail port in recent years because of efforts undertaken with state and local economic development authorities to attract distribution centers to Savannah and to Georgia in general, Mr. Morris noted. The “distribution corridor” between Savannah and Atlanta, through Bibb County and including the city of Statesboro, is part of a larger statewide supply chain that creates jobs and economic opportunity, he said.
“Transportation and logistics is one of the fastest growth industries in Georgia, so it only makes sense that different players get involved in this rapidly growing business. Developers from around the world will be attracted to our business model,” Mr. Morris said of potential international investment in the ports authority’s strategy of attracting more cargo by locating warehousing and distribution facilities near the ports.
At least 12 retail warehouses have located near the Savannah port, increasing from five to 16 since 1990 the number of shipping lines from Asia that call at the port each week.
Mr. Morris added that the ports authority is working with partners in Asia to expand Georgia’s export markets, which, in turn, could spark more interest in investment in Savannah. The ports of Savannah and Brunswick saw faster growth last year in exports to Asia than in imports from that region, he noted.“Asia been very hot for us because the types of products Georgia exports, like paper, pulp and kaolin, are necessary inputs for products being made in those developing countries to fulfill the needs of a growing middle class,” Mr. Morris said. More exports means more marketing of Georgia products to different areas of world, he added.
Georgia has spent more than $500 million in the past decade to expand the port’s docks and rail yards, and the state plans to allocate an additional $150 million to rebuild Savannah’s port terminals to double their current volume over the next 10 years. But Georgia’s ports are already setting records in trade volume in recent quarters.
In July, the first month of the state’s fiscal year 2006, the Port of Savannah hit an all-time record in containerized cargo, realizing 19 percent growth in cargo volume from the same month last year. New shipping lines between Savannah and Latin American, as well as the Mediterranean, are expected to add to cargo moving through the port. Savannah is North America’s 10th busiest port and already ranks second among East Coast ports for cargo imported from Asia.
The Port of Brunswick also saw record growth since last year, with the number of auto and machinery units moving through the port increasing 19.8 percent from July 2004 to the same month this year. Imports of South Korea-based Hyundai Corp.’s Kia cars through Brunswick accounted for some of this growth.
Much of Savannah’s containerized cargo growth has come from ships being rerouted from Long Beach and Los Angeles ports in California, where worker strikes, combined with the massive volume of Asian imports to be distributed by land throughout the United States, have made the less-crowded Savannah port more appealing.
“It doesn’t make sense to ship products by land from Los Angeles to Savannah; it makes more sense to go by water. And Long Beach has more cargo than it can handle,” Mr. Morris said, adding that more cargo from western ports could mean more interest in warehouse and distribution center investment in the Savannah area.
Contact Mr. Morris at (912) 964-3855 or rmorris@gaports.com. Visit www.gaports.com for more information.