Georgia Ports Authority Executive Director Griff Lynch described 2020 as a year of “the low of lows and high of highs.”
Those highs helped propel the GPA to move more than 4.68 million twenty-foot equivalent units (TEUs) in 2020, a 1.8% increase over the year before.
“When we think about where we were in the July time frame, I never would have expected or anticipated that we would come out positive year-over-year for the annual number,” Lynch said. “In October we broke the all-time record. Then in November we topped that. We said, ‘OK, we might have a chance of closing out the year on the container side with positive numbers.’ And then December came through.”
In fact, December 2020 was the busiest December ever at the Port of Savannah. The 447,525 TEUs moved made for a year-over-year increase of 24%, or 86,700 TEUs. Total cargo crossing all docks reached 3.33 million tons in December, up 12.5%. Rail volumes for the month grew 16.4%, or approximately 10,900 TEUs, for a total of 77,230 TEUs.
The last three months of 2020 also made for the best quarter in the GPA’s history.
“And what’s fascinating is when you look at the last three months of the year and if you annualize that, we have a run rate right now of 5.6 million TEUs” for 2021, Lynch said. “It’s not just a week or a month. Now it’s been three months of sustained elevated lift counts.”
Not your traditional January
U.S. ports typically experience a post-holiday lull in January, but 2021 is starting out as atypical.
“January is looking extremely strong. I would say it’s probably not going to be as high as the last three months, but it’s January,” Lynch said. “But I’d say it’s going to be right there — very, very strong. We definitely will be up double digits from January of last year.”
The GPA’s worst month in 2020 for volumes was February, followed by the biggest year-over-year drop in March. Lynch does not expect a repeat in 2021.
“We did 172,000 loads in February,” he said. “This February we’re anticipating well over 200,000 lifts.”
Lunar New Year in Asia in February also is expected to be anything but traditional. A complete shutdown of factories and exports is not anticipated as the demand for goods from China has not subsided.
“Right now we’re just running at peak constantly. We haven’t seen a lull and I’m not sure when that would hit,” Lynch said.
“If Chinese New Year is compressed or eliminated, if services keep going and there are no voided sailings and … if it’s feasible and doable for the carriers, our anticipation is that we’ll have a steady flow here through the spring. The carriers I’ve talked to see strong bookings through March. That tells you a lot,” he said.
“Just based on what we’re hearing, April could be strong as well — strong for that month, maybe not the numbers we’ve seen in September or October but strong for that month, definitely year-over-year growth without question,” Lynch said.
During 2020, the Port of Savannah maintained a near-even trade balance of 51% imports and 49% exports, which is “rare for the industry,” according to the GPA. The 2.3 million TEUs of exports included food, forest products, cotton, clay, automotive goods and chemicals.
Lynch said more customers saw the benefit of moving cargo by rail to the Appalachian Regional Port and then transporting it by truck. The ARP, located in Chatsworth, Georgia, handled 59,000 TEUs in 2020, up by 25,000, or 73%, compared to the previous year.
Still, not all numbers for 2020 were positive. While the container trade ended the year in positive territory, the auto industry was harder hit, with both manufacturing and sales experiencing a difficult year related to the pandemic, according to the GPA. Roll-on/roll-off (ro-ro) cargo totaled 602,748 units in 2020, a decrease of 8%, or 55,000 units. However, momentum has increased in recent months, with ro-ro trade between August and December up 15,000 units compared to the same period in 2019. December ro-ro units totaled 70,266, up 22.5% year-over-year.
The GPA is preparing to handle all the capacity it can get in 2021. By the end of February, the Port of Savannah will be able to move an additional 150,000 ocean containers annually just through the conversion of an existing terminal.
“And we’re going to start construction on our Berth 1 project this year, which when completed will provide about another 1 million TEUs of berth capacity at our Garden City terminal. That will start in March and will be about a year and a half to two years. We’ll get the bids back next week. Ballpark, we’re talking about $100 million to $150 million. We have a federal grant to help offset that. That grant has been awarded, it’s $34 million, and we’ll apply that as we move forward,” Lynch said.
“December was up 24%, November was up 26.5%, January is going to be up double digits, so we’re going to advance some capacity projects that we had on the table and try to speed those up to ensure that we have the capacity to continue to absorb these volumes,” Lynch said. “It’s really exciting. We have seven big projects that will add over a million TEUs of capacity. We’re also looking at yard capacity. The port already owns the property. We had purchased 145 acres a couple of years ago and we’re looking to develop that land now.
“And as we’re speaking, SHEP — the Savannah Harbor Expansion Project — is now almost 80% complete and definitely will be done by the end of this year,” he continued. “The Mason Mega Rail Project is now 75% complete and that’s coming at a perfect time to absorb rail growth. We’re getting a lot of inquiries right now about use of our rail and I think those who are using it are very pleased. Cargo is moving fluidly and that’s great to see, so really the timing couldn’t have been better on that one.”
Stressed supply chain
When planning and design started for Mason Mega Rail in 2016, annual rail lifts at Garden City Terminal totaled 675,000 TEUs, according to the GPA. Today that number is more than 936,000, a 40% increase. At full buildout, Mason Mega Rail Terminal will grow Savannah’s annual rail lift capacity to 2 million TEUs per year.
“The entire supply chain right now, there’s no question it’s stressed. We want to make sure we’re able to keep moving that cargo fluidly. I’ve got to give kudos to the U.S. West Coast. When you look at the sheer volume that they’re absorbing out there and the growth, it’s amazing. They’ve got great people out there doing the best they can. Clearly it’s overwhelming — it’s a tidal wave of cargo and no one can process that much cargo effectively,” Lynch said.
The GPA is watching to see if ocean carriers change course and sail instead to the U.S. East Coast.
“Customers are asking, ‘Do you have the capacity?’ The question really is, will the ocean carriers open up more capacity to the East Coast? The ships are full on the West Coast, they’re full on the East Coast, something’s got to give, right? The question is where do you put that capacity,” he said.
“The East Coast, generally speaking, is not as congested as the West Coast. If you’re a BCO out there and you want to make sure your cargo gets to its destination effectively, you’ve got to balance it out,” Lynch continued. “The thing that has proven out for BCOs over many years now is diversification is key. The lesson learned here is everybody trying to build up inventory looks at the fastest ocean route, which is certainly the West Coast, but when you think about it, it was too much and too soon to go to one place.
“I have to think that both ocean carriers and BCOs are maybe going to plan a little differently. The terminals and the supply chain are looking for ways to enhance capacity and velocity, whether it’s railroads, ports, warehouses, whatever it might be. We can all do a better job and we can all make investments that will provide more capacity. That’s what we need to be doing,” Lynch said.