Savannah seeks to expand e-commerce, intermodal rail

joc (source) :

Savannah is at the start of an aggressive expansion of its intermodal rail capabilities.

The Georgia Ports Authority (GPA) is investing in projects to expand Savannah’s intermodal rail traffic deeper inland and help the East Coast’s second-busiest container port keep pace with bigger ships, increased volume, and new distribution centers.

Lynch said projects under way or planned will double Savannah’s annual intermodal rail capacity to 1 million lifts of containers in various sizes. The port currently handles about 400,000 lifts per year.

Intermodal rail now accounts for 18 to 19 percent of Savannah’s container volume, but the five-year goal is to increase that to 25 percent — and from a bigger base, Griff Lynch, the GPA’s executive director, told JOC.com.

Savannah’s container volume jumped 6.9 percent to 3.9 million TEU during the GPA’s most recent July-to-June fiscal year, Lynch said in his annual state of the port address. Excluding empty boxes, volume during that period totaled 3 million TEU, up 7 percent, according to PIERS, a sister product of JOC.com.

Lynch said the GPA plans to seek bids next month on construction of additional on-terminal track to enable handling of 10,000-foot-long trains at Savannah. Construction is expected to start in the first quarter of 2018 and be completed by the end of 2020. The cost is projected at $128 million.

The work seeks to leverage the GPA’s development of inland rail terminals to expand intermodal service to a “Mid-American Arc” including Atlanta, Memphis, St. Louis, Chicago, and the Ohio Valley.

The first of the inland terminals is operating in Cordele, in south Georgia. The second is scheduled to open next autumn at Chatsworth, in northwest Georgia. Lynch said due diligence is being performed on a third terminal planned for northeast Georgia, and that three others are on the drawing board.

The GPA expects the Chatsworth intermodal terminal to reduce Atlanta truck traffic by 50,000 trips per year and extend Savannah’s intermodal rail reach into Tennessee, northeast Alabama, and parts of Kentucky.

Lynch said increased use of intermodal rail is needed to handle growing volumes and to avoid disruptions from shortages of trucking capacity.

During the last two decades, Georgia has encouraged development of import distribution centers (DCs) that have attracted all-water services from Asia and made Savannah the second-largest US East Coast container port, behind New York-New Jersey.

Savannah is attracting DCs for e-commerce as well as for brick-and-mortar retailers, Lynch said.

He noted two new e-commerce DCs: furniture supplier Noble House will build a 630,000-square-foot DC to serve the eastern United States, and home accessories company Best Choice will build a 345,000-square-foot facility.

Port-related e-commerce announcements during the last year include an 846,000-square-foot DC for Wayfair, and a 753,000-square-foot facility for Tory Burch.

Coupled with 3 million square feet of DC space completed within the last year and 5.2 million square feet under construction, the new facilities will provide Savannah with 57 million square feet of industrial space, and all but 2 percent is committed to users, Lynch said.

E-commerce suppliers are seeking DC sites near ports with strong carrier services and ample land for development, and use an operating model that calls for import containers to be quickly deconsolidated so that goods can be dispatched to customers. “We’re seeing a shift to more transloading,” Lynch said.

Another trend, Lynch said, is larger ships that discharge more containers at a time. A few years ago, a typical ship dropped off only a few hundred boxes. Now Savannah is handling as many as 6,000 boxes from a single ship.

The Panama Canal expansion and the raising of navigational clearance of New York-New Jersey’s Bayonne Bridge have cleared the way for regular calls of ships with capacities of 14,000 TEU at Savannah and other East Coast ports.

In addition to expanding intermodal rail, Lynch cited several of what he described as basic “blocking and tackling” projects under way:

  • Orders for 10 super post-Panamax cranes that will provide Savannah with a total of 36 ship-to-shore gantry cranes that the port says will move up to 1,300 containers per hour. Four of the new cranes will arrive in 2018 and the other six by 2020.
  • Addition of six truck lanes at Savannah’s Garden City container terminal, increasing the terminal’s total to 54 lanes. The state is investing $10 million over 10 years into freight highway projects, including dedicated truck lanes between the port and the interstate highway system.
  • Deepening the port’s 42-foot-deep channel to 47 feet, a project Lynch said is 35 percent complete and is scheduled for completion in late 2020. Since the opening of larger Panama Canal locks in June 2016, the percentage of New Panamax ships calling Savannah has increased to 60 percent from 42 percent.

Earlier this year, the Georgia and Virginia port authorities agreed to cooperate on ways to handle the bigger ships and volumes. Lynch said the cooperation is still in its early stages but that he believes it will benefit both ports and the trade in general. “Virginia has learned from us, and we’ve learned from them,” he said.

 

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