After reporting another record fiscal year of volume growth, the Port of Savannah’s near-term encore is likely to be somewhat muted.
The nation’s fourth-busiest container port broke the 5 million twenty-foot equivalent unit barrier in its 2021 fiscal year, according to a data published Monday by the Georgia Ports Authority, the state agency that runs the container port, the Port of Brunswick, a bulk, breakbulk and roll-on, roll-off facility for vehicles, and an inland port facility in Chatsworth, Georgia, in the state’s northwest corner.
Savannah handled 5.3 million TEUs in the period ending June 30, shattering the previous record set the year before by nearly 900,000 TEUs, according to GPA data. The 20% year-on-year gain at the Port of Savannah replicated the percentage increase from FY 2019 to FY 2020, GPA said. Brunswick reported its second best year on record after FY 2015.
The back-to-back volume surges mean that, for now at least, the law of large numbers has caught up with the container port.
“We are not expecting massive growth this [fiscal] year,” Griff Lynch, GPA’s executive director, said in an interview on Friday. Lynch said he will be happy if Savannah maintains its current level of throughput through the rest of the year. The growth performance of the past two fiscal years can’t be sustained, especially with ships and berthing terminals already full, he said.
“It’s going to be tough to top what we just did,” Lynch said.
The port’s success means it is bumping up against box throughput constraints. In 2018, it unveiled a 10-year plan to boost capacity to 10 million TEUs from about 5.5 million TEUs. GPA’s multiple expansion projects are geared toward that goal. A $250 million project set to be finished in 2023 will transform one of Savannah’s berths from one that handles small ships to one capable of servicing an 18,500-TEU vessel, Lynch said. A second terminal under construction west of GPA’s bulwark Garden City terminal will add 750,000 TEUs of capacity, he said. Combined with 650,000 TEUs to be brought online by the end of 2021, GPA expects to add 1.4 million TEUs over the next two years.
The multiyear effort to deepen Savannah’s historically shallow harbor to 47 feet from 42 feet is expected to be finished by the end of 2021, GPA said. When completed, the harbor will have a depth of 54 feet at high tide, meaning bigger ships can take on even heavier loads without any tidal constraints, GPA said.
GPA’s Mason Mega Rail project, which enables CSX Corp. (NYSE: CSX) and Norfolk Southern Corp. (NYSE:NSC), the two Eastern Class I railroads serving the port, to run trains from Garden City as far west as St. Louis, is expected to be completed by mid-2022. Rail volumes in FY 2021 rose to 550,000 lifts — each lift equals one transfer between a crane and a railcar — an increase of about 12%. By the end of 2021, the port authority will commission the building of nine new tracks, it said. The project will generate 2 million lifts per year at full working capacity, the port said.
A second inland port, located in Hall County northeast of Atlanta, is expected to be completed in 2024, Lynch said.
Container shortages have plagued the maritime supply chain since the middle of 2020, when volumes unexpectedly began to surge following the pandemic-related lockdowns of the spring. Today, Savannah has about 30,000 available containers for export, Lynch said. The port is also handling a lot more empty containers than it has in the past, he said.
Savannah is the leading U.S. port for export traffic. Because of that, it has maintained a near-equal balance of imports and exports. However, the spike in import traffic has thrown that equation out of kilter. Lynch estimated that imports account for 60% of Savannah’s traffic, compared with 52% during what would be considered normal times.