Showing posts with label port of savannah. Show all posts
Showing posts with label port of savannah. Show all posts

Monday, June 18, 2018

Trade Wars? Savannah, Georgia, should be worried

Since the last recession, the Savannah area has been on a growth spurt.

After suffering through the national recession, the Savannah area has added nearly 30,000 new jobs resulting in employment growth of almost 20% since 2009.

That growth rate is just shy of the Atlanta area’s growth rate and faster than statewide Georgia, which saying something for a state that continually ranks among the fastest growing states in the nation.

Walking east down River Street in Savannah, past the crowds of tourists and the gift shops and restaurants on your right, you might be deceived into thinking that the city’s growth is due to tourism, but the key to Savannah lies in looking to your left as you watch the large container ships that move past the city on the Savannah River..

The Port of Savannah is home to the largest single container terminal in North America with the largest concentration of import distribution centers on the East Coast, according to the Georgia Ports Authority.

This is a city that remains dependent on trade.

Employment based on moving goods

Although nationally services are now a larger contributor to GDP than goods, the movement of commodities and goods, imports and exports, remain the lifeblood of ports like Savannah.

Significant numbers of workers are employed moving the millions of pounds of materials and merchandise that flow through the Savannah port each year.

More than 10% of the Savannah area’s workers are employed in transportation and material moving occupations, a much larger share of the area’s employment compared to the 7% share of workers nationwide, according to the Bureau of Labor Statistics’ Occupational Employment Survey.

According to BLS, 17,810 workers are employed in transportation and material moving occupations in the Savannah area. These include:

·         2,110 industrial truck and tractor drivers with wages averaging $40,270
·         2,790 heavy truck and tractor trailer truck drivers with wages averaging $43,170
·         7,270 laborers and material movers with wages averaging $31,550

In addition, there are occupations specific to a port that provide well-above average pay including 280 transportation inspectors with an average salary of $65,610 and 180 captains, mates, and pilots of water vessels with an average salary of $77,070.

Savannah’s future tied to its port

"Georgia is home to both the single largest container and roll-on/roll-off facilities in North America." Ports Authority Executive Director Griff Lynch said during the 50th annual Georgia Foreign Trade Conference.

The Ports Authority, which oversees the Port of Savannah, has no plans to slow its expansion. Its executive director recently announced plans to double container cargo by 2028, as reported by the Atlanta Business Chronicle.

“To move that cargo, the GPA's 2028 strategic plan calls for 42 ship-to-shore cranes, new lanes for the gantries that stack containers and a significant expansion of intermodal operations. Ground will be broken next month for a new rail yard at Savannah, while the GPA soon will open its second inland terminal in Northwest Georgia.

Trade through Georgia's ports grew to more than 4 million TEUs last year, up from 2.8 million tons of containerized cargo in 2010. Ro/ro cargo has expanded to more than 640,000 units a year. Cargo of all types crossing all docks has grown from 25 million tons to 35 million tons since 2010.”

Threat of tariffs

All that expansion is threatened if tariffs being proposed by the U.S. and China result in a slowdown of trade. A trade war with China could not come at worse time.

In 2016, the Panama Canal completed its largest expansion since its opening in 1914.

“The Expansion included the construction of a new set of locks on the Atlantic and Pacific sides of the waterway, creating a third lane of traffic and doubling the cargo capacity of the waterway. It also included the creation of the Pacific Access Channel, improvement to the navigational channels, and improvements to the water supply.”

The Savannah port is in the midst of the Savannah Harbor Expansion Project (SHEP), which will deepen the Savannah River to 47 feet at mean low water to accommodate these larger so-called New Panamax ships to better serve Asian markets, and specifically China.

A trade war would be negative to the port in two ways. It could curtail Georgia’s planned future growth that is focused on Asian markets, and it could cause China to shift its exports to Europe thus creating new competition for American goods and commodities that would then have to compete with Chinese goods in the EU market.

So far, the trade war has been all rhetoric with no plans to actually implement proposed tariffs until May or June, giving politicians plenty of time to reconsider their decisions.

WABE in Atlanta looked at the impact of tariffs on the state and quoted Raymond Hill, a lecturer at Emory’s Goizueta Business School, as stating that he doubts the tariffs will make much of an impact here.

“It’s gonna have a little bit of significance probably for, you know, people who grow almonds in California, but even then we’re talking about a 15 percent tariff, so it probably won’t have that much effect, even on the products that were selected,” Hill says.

Maybe living in Atlanta, which is currently in the midst of its own growth spurt, clouds one’s perspective, but a trade war that slows shipping in and out of the Port of Savannah will significantly impact the port and consequently an important part of Georgia’s economic engine.

Fewer container ships finding their way up the Savannah River should raise concerns for everyone in the state.