Miraflores locks at the Panama Canal.

The Port of Savannah has the Panama Canal to thank for its status as the fastest-growing container port in the U.S.

That was a central message Curtis Foltz, executive director for the Georgia Ports Authority, delivered last week to a delegation of more than 25 Panamanian government leaders, logistics experts, canal employees and businesspeople in Atlanta.

While outlining the advantages that have helped the Savannah port position itself for growth, Mr. Foltz attributed much of its success over the past decade to a single 2002 event that diverted container ships from Asia away from California‘s ports and through the Panama Canal to the East Coast.

Using data charts, Mr. Foltz showed the upswing in Savannah after an 11-day labor strike that closed West Coast ports and “changed shipping patterns in the United States forever,” he said. Savannah saw a 22.5 percent spike in container traffic that year, but the proof of a real paradigm shift came the next year, when the growth continued.

“They liked what they got,” Mr. Foltz said, asserting that shippers were satisfied with the customer experience at Georgia’s ports. They also realized that transiting the canal and offloading in Savannah put them closer to the U.S. population centers on the East Coast, avoiding sending products across the country by rail or road, he said.

From 2000-09, the Savannah port has had the highest compound annual growth rate of any port in the country: 11.5 percent. Traffic was down considerably during the recession last year, but at 9.9 percent, the rate of decline in Savannah was slimmer than that of other ports, Mr. Foltz noted.

As the economy and global trade patterns have begun to pick up, 2010 could be the “best year ever” for year-over-year growth in Savannah, he predicted.

Over the long-term, Mr. Foltz was even more bullish. “There’s a consensus that international trade and commerce through this nation’s ports are going to continue to grow fairly significantly over the next 20 years,” he said. The number of twenty-foot equivalent units (or TEUs, the standard measure for container traffic) handled in U.S. ports by 2029 could reach 100 million, up 150 percent from 40 million in 2009, he added.

The Panama Canal is girding for this surge. The historic waterway started an expansion last year that is projected to cost more than $5 billion. A set of new locks will enable the canal to handle jumbo container ships – called post-panamax vessels – that are being used with increasing frequency by international shipping firms. The Panama Canal Authority hopes to have the expansion completed by 2014.

For the Savannah port to receive the larger vessels, its harbor must be deepened. Before that project can begin, the U.S. Army Corps of Engineers must sign off on a plan. The corps was slated to issue its record of decision on the proposed project this year but in March pushed that deadline back to April 2011.

Mr. Foltz, who traveled with Georgia Gov. Sonny Perdue to Panama in September to get an update on the canal expansion, said the corps has spent nearly $40 million and more than 11 years studying the project. The ports authority wants the harbor deepened to 48 feet, an effort that would cost an estimated $600 million, with much of that bankrolled by the federal government.

The Georgia ports are doing everything they can to make sure the deepening is done, Mr. Foltz said.

“Us and Panama are connected at the hip in terms of our growth,” he told the Panamanian delegates. “We’re very supportive of your expansion and your growth, and you have been very supportive of our need to expand our facilities to meet this growing global commerce.”

Ken Stewart, commissioner of the Georgia Department of Economic Development, also traveled to Panama with the governor last year. Addressing the delegation, he called Panama a “critical country for us,” saying that imports from Panama through the Georgia ports in 2009 were 78 percent higher than the previous year.

“Our relationship with the Panama Canal is critical,” said Mr. Stewart, adding that a bond between the Georgia Ports Authority and the Panama Canal is a “very big deal for us.”

The Atlanta-based U.S.-Panama Business Council, Southeast chapter organized the delegation, which included the country’s vice minister of trade, José Domingo Arias, as well as officials from the Panama Canal Authority, Tocumen International Airport and Panama City’s new metro system, among other high-ranking delegates. Panama’s ambassador to the U.S., Jaime Aleman, was the keynote luncheon speaker during a day of seminars April 30 at the Metro Atlanta Chamber.

Luis Hall, president of the USPA-Southeast, said it’s very important for all parties involved to build on the event’s momentum in promoting business ties between Panama and the Southeast.

“This is only the beginning,” he said.

GlobalAtlanta traveled to Panama in May 2008 to examine the impact of the canal expansion on the Georgia ports.  Read that report here

As managing editor of Global Atlanta, Trevor has spent 15+ years reporting on Atlanta’s ties with the world. An avid traveler, he has undertaken trips to 30+ countries to uncover stories on the perils...