EQUAL PROSPERITY FOR SAVANNAH
By Howard Spiva
Most people in Savannah do not give the Ports much thought. To the average person the ports are a place near Port Wentworth, which has no effect on their daily life. Nothing is farther from the truth.
In today’s global economy, the ports can mean everything to Savannah’s financial future. Why should we care? It is simple; in any financial, business or economic decision you need to understand the probable, likely and predictable future.
You should consider facts like zoning, road widening and economic events that are within the predictable future. The same is true when deciding about buying or owning your home, investing in real estate, opening a business or just selecting an area to work and live.
Major corporations plan ahead and so should each of us.
When someone is considering a major purchase such as a home or car they have to consider their job future. If you work in Savannah at Gulfstream Aerospace, you have plenty of security. Gulfstream had to expand its facilities because it couldn't keep up with demand for the manufacturer’s top-of-the-line luxury business jet, the G550. Having more customers than you can fill orders for, now that is a problem we want all of our employers to have. Gulfstream has the capability to produce 90 G550 jets a year. The 200th one rolled off the line in June 2008. If that isn’t enough, on March 13, 2008, Gulfstream announced the introduction of the new aerodynamically advanced G650.
The G650 offers the longest range, fastest speed, largest cabin and the most-advanced cockpit in the Gulfstream fleet. It holds the distinction of being the fastest civil aircraft in the world. Current new orders on the jets will guarantee sales for years into the future. That is job security for the employees!
Likewise, when you see what our ports are doing, and how they are growing, you can feel secure in Savannah’s economic future and the jobs that it will continue to create. The greatest growth for the Port of Savannah comes from international shipping. The future growth will be unprecedented.
Every economist will tell you that the number one indicator of home prices and value appreciation is job growth. Job growth is paramount to a good economy. Job growth equals a great economy and increased home values.
Savannah’s Ports now have become one of the premier ports in the nation. That means prosperity. Savannah is ahead of most other port cities and is positioned for unprecedented economic growth. Savannah’s ports are in the middle of a ten year, $700 million capital improvement and expansion. The improvements allow Savannah to accommodate the newer and larger cargo ships of the future.
Logistically, Georgia has already become a major global hub. This is no accident; it is a result of many years of planning and preparation by the Georgia Ports Authority (GPA).
Savannah is preferred by larger retailers wanting a distribution center because of the abundance of land within easy access to the ports. Many ports are in the middle of major cities with very limited space for warehouses and storage of goods. The Savannah area has millions of square feet of existing buildings and plenty of land for almost unlimited expansion.
Additionally, Georgia has widened Interstates, has a great rail system that criss-crosses the entire region and has the world’s busiest airport in Atlanta. All of these investments will pay large dividends for Georgia.
The Savannah Ports are:
The fastest growing port in the country. Since 2003, the fourth busiest container port in the nation. See http://www.gaports.com
In 2007, experienced double-digit growth for the eighth consecutive year.
The largest single container terminal in the Eastern United States.
In 2008, the ports provided $18.6 Billion in annual revenues to the state of Georgia.
In the last few years, most USA ports have had some decline or only a slight growth, while Savannah has had a positive growth each year in imports and exports. From 2000 to 2005, Savannah’s annual growth outpaced ports of Charleston, Jacksonville, Norfolk, New York, Houston, Los Angeles and Seattle/Tacoma. In March of 2008, Savannah posted the only growth among major ports in the Mid and South Atlantic.
Much of the Savannah growth results from shippers diverting business to Savannah due to train and traffic jams and less efficient ports; as have occurred on the West Coast.
The growth of people moving to the Southeast has prompted more retail shops, furniture stores, car dealers and many other businesses that rely on imports. Yes, the growth shows that the Boomers are already arriving in the South.
In a recent 2008 agreement with South Carolina, GPA is to develop an additional 1800 acre site that will be accessible to the largest container ships built to date.
With the delivery in January 2008 of four new super Panamax cranes to the Ports, Savannah now has eight of the largest and fastest container cranes in the world. These cranes are monsters!
Balanced with 47 percent exports and 53 percent imports. The major exporter trade lanes are to Northeast Asia, Mediterranean, North Europe, Southeast Asia, Middle East, Oceania, East Coast of South Africa, India/other Asia, Africa, Eastern Europe.
Savannah imports many products including: furniture, retail goods, machinery, appliances, electrical, hardware, house wear, mineral for tile and stone, toys, food (fish, vegetables and beer/wine), automotive, apparel, rugs, sheets, towels, and blankets.
Savannah exports many commodities including: wood pulp, paper & paper products, food (poultry & citrus), clay, fabrics and raw cotton, chemicals, retail goods, machinery, appliance & electrical, resins & rubber, and automotive products.
The Ports also transport many military supplies and equipment.
Equipped with special rail yards for moving containers which reduce trucks and paperwork; most other ports don’t have these.
The Georgia Ports clearly equal prosperity for Savannah and all of Georgia.
THE PANAMA AND SUEZ CANALS
Agreements that the Georgia Ports Authority (GPA), now has with both the Suez Canal and The Panama canal have created a promising alliance.
From 1998 to 2007, the 20-foot containers (called TEUs) from Southeast Asia and India passing through the Suez Canal have increased from 9.7 million to 26.5 million. It is easy to see the huge growth. The canal connects the Mediterranean and the Red Seas and allows cargo ships to avoid going around Africa and sail directly across the Atlantic to Savannah. The Suez has no limitations on the size of ships passing through.
The Panama Canal expansion is so significant that in 2007 it received the prestige of an International award and named the Best Construction Project in the world.
One fact that is no longer a secret is The Panama Canal means great growth for Savannah.
Savannah’s major avenue to Asia is the Panama Canal. A study by the GPA showed that only a few years ago, 70 percent of cargo coming from the West Coast was transported by land. That is changing.
LOCATION LOCATION LOCATION
Another important reason that shippers prefer Savannah’s port is the superior location and access over most other ports.
All the other ports on the East Coast face the challenge of the longer distances to reach different parts of the country. In contrast, Savannah is centrally located and with access to I-95, I-16, Hwy 21, Hwy 17 and Hwy 80. Savannah Ports already services over 70% of the United States.
When Northern ports are used, such as New York, the trucks transporting the goods often have to contend with less than ideal weather conditions, such as snow and ice. Cargo ships operating out of the Southern ports, such as Miami, result in, land transportation having to deal with highly congested cities such as Jacksonville, Florida.
CHEAPER IF BY SEA
The methods of transporting goods from other ports to our region are rapidly changing.
Shippers are recognizing that an all-water route is cheaper and in many cases faster than land travel. Lower fuel and handling costs favor the water route. One cargo ship, docking on the West coast, can fill more than 16 trains of goods to transport the cargo across the country. Increased imports sometimes bottleneck the West Coast’s train traffic. Shipping to Savannah’s ports is clearly superior to land transportation from the West coast. This change is 30 percent of Savannah’s port’s growth now coming from the Panama Canal.
The Port of Savannah has more direct services to and from Asia via the Panama Canal than any other port on the East Coast. Savannah has outperformed every other port in the nation when it comes to attracting new services and expanding market share.
Savannah is one of the closest East Coast ports to the Panama Canal and near most of the booming Southeast markets. The location on the curve in the coastline puts the ports closer to the Midwest than Charleston, SC or Norfolk, VA.
What many people don’t know is that shippers will soon have an alternative to the West Coast with the current widening that is occurring to the Panama Canal. The Panama Canal over the next six years (2014) will have completed a $5.2 Billion expansion that will allow it to accommodate the largest ships in the world. This is the key to the large effect it will have on Savannah’s economic growth.
The savings are clear. A single super tanker going through the Panama Canal instead of around Cape Horn to reach the East Coast will save over $4 million in fuel costs and the 16 days in time to travel the extra 7,872 miles.
Because of the geographic limitations, such as having to sail around Africa, some countries choose to import/export with the United States West Coast.
The West Coast can be less desirable because of the high cost there, including the fact that an average cargo ship requires multiple trains to transport the cargo across the United States.
Smart companies can see Savannah’s future and prosperity. Many who look here only see the population of 250,000 people and fail to recognize the added population of 14 universities, 3 nearby military bases (and their families) or include up to 7 million tourists who will visit Savannah this year. Many foreign countries are seeing this opportunity and investing heavily in the Savannah area.
HIGHWAYS, INTERSTATES AND RAIL SYSTEMS
With so many alternative routes, Savannah avoids the trucking congestion so many other cities face. The result is cargo moves efficiently from the ports to the customer. Savannah’s ports now services 70% of the USA.
Citizens and businesses in Savannah, who are paying attention, see that major industry and manufactures are relocating and buying land and building distribution centers and warehouses in and around Savannah. Major industry and businesses have opened their eyes to Savannah. Manufacturers and large scale retailers are serious importers and exporters.
Retail distribution Centers in Savannah area now include:
Advanced Auto Parts
Bass Pro Shops
Citi Trends Fashions
Pier 1 imports
Target (44 Ga stores)
The Home Depot
These distribution centers equal jobs and in turn stimulate the local economy.
BEATING A PATH TO SAVANNAH
These are not pie in the sky predictions. The big boys have arrived. In a roughly $30 million deal that closed in January, 2008, Indianapolis-based Duke Realty Corp. acquired two distribution buildings totaling about 789,000 square feet in the Savannah area.
The deal brings Duke's holdings to about 5.1 million square feet in the Savannah, where industrial market activity is driven primarily by continuing growth in container traffic moving through the Port of Savannah. Duke initially entered this market in 2006 with a $194.6 million acquisition of an 18-building portfolio. Sam O'Briant, Duke's executive vice president was quoted as saying "We're big believers in the long-term viability of the Savannah port -- it is a tremendous economic engine”.
Savannah represents the first city with fewer than 500,000 people where Duke Realty has landed. Why is that significant?
Duke Realty Corporation is the largest publicly traded office and industrial real estate company in the United States. Duke Realty is a full-service commercial real estate company that owns, manages or has under development more than 114 million square feet of industrial, office and retail properties in 14 major U.S. cities. Duke controls 4,600 acres of undeveloped land that can support approximately 69 million square feet of future development and provides nationwide real estate solutions through its national development and construction division.
Many of Atlanta's industrial developers are placing big bets on Savannah's future, fueling a land grab among the port city's marshes. One of the top Savannah players is developer Wayne Mason, who has partnered with Solution Property Group LLC to purchase about 600 acres to develop two business parks and an additional building outside the state-owned Port of Savannah. Solution Property also has another 500 acres under contract.
Mason and his partners aren't alone. Duke Realty and other Atlanta developers making headway in Savannah -- with property under contract or recently acquired -- include Wilson Hull & Neal; McDonald Development Co.; Ackerman & Co.; and Commonwealth Properties. Savannah brokers also have heard from Industrial Developments International (IDI), AMB Property Corp. (NYSE: AMB), ProLogis (NYSE: PLD), Trammell Crow Co., and others.
Bottom line? The big boys believe in Savannah and its Ports.
BRYAN COUNTY IS ONE EXAMPLE:
The impact of a rapidly growing coastal area is clear when one considers the Fox News show reporting that Bryan County has been named number 3 in the nation for the housing market and also listed as one of the “Top Five Places to buy”. The growth is fueled by a 46.4 percent job growth rate in Bryan County! This rating was determined by analysis of real estate market data, economics, technology, statistics of crime rate, jobs and price stability.
Bryan County and all of the four coastal counties in and surrounding Savannah have many large high-quality, master-planned communities and development projects.
The Boomers are coming and many have already arrived.
(See BOOMERS article http://www.srei-inc.com/SAVANNAHARTICLE2.htm)
UNIVERSITIES AND COLLEGES:
Savannah is blessed. We do not have to rely on just one industry or university or one military base for our primary economic base. Colleges and universities are strong economic engines for the State of Georgia having an $11 billion impact on the state’s economy in 2007. This is according to the Selig Center for Economic Growth study and analysis. The three leading Universities in the Savannah area had an $800 million influence here. That does not consider the impact of the other eleven.
Colleges and universities are important to a community for culture, arts, information and new ideas. Many people, such as retiring Boomers, migrate to a new area because they prefer to be near colleges and universities. Schools bring plays, art, creativity, youth, energy, vitality and excitement. Three new Universities are looking for local sites and Savannah already has 14 colleges and universities!
OTHER FACTS ABOUT SAVANNAH:
Savannah, for 2008, was named in the Top 100 places to live! Relocate-America.com based the rating on education, employment, economy, crime, parks, recreation, and housing. The fact that Savannah housing is reasonably priced indicates we have much value appreciation in our future.
Everyday there are new planned developments announced including two recent ones:
-River Street and The Savannah River front’s $800 million project;
-Veteran Parkways’ business park with 10.5 million square foot of industrial space on Savannah’s southside. Yes, Savannah is alive and well! (see Savannah article http://www.srei-inc.com/SAVANNAHARTICLE1.htm )
Savannah has a great quality of life because of the climate, culture, waterways, ocean, life style and historic charm. Savannah’s real estate has not yet seen the high value appreciation that much of the Country has seen. For business and economics it stacks up against any town. Savannah is positioned for huge population growth, business and prosperity.
In today’s modern society, with advanced technology, when viewing a map, a user can now zoom in on a property to get small details on an aerial satellite or zoom out showing a city, state, the United States or even the entire earth. When making decisions and looking into the economic future, it is smart to zoom in. It also is imperative that we “zoom out” and look at an area from the world economy view.
I have strived in this article to look closely at Savannah and the ports as how we are affected by economic growth. When you zoom out and look at the whole picture, including the effect of the Panama and the Suez Canal on Savannah and its job growth, it is easy to see that Savannah has a terrific future.
Businesses and job growth is the single most import indicator to all economic success. Clearly, the ports are attracting major companies, corporations and their distribution centers to Savannah, which equals strong job growth well into the next century.
Howard Spiva is a Savannah personal injury trial lawyer (www.spivalaw.com). He is a real estate broker, investor and professional seminar speaker. He is certified for instructing continuing education classes by the Georgia Real Estate Board. Howard is also the host of The” NEVER SETTLE FOR LESS” Show on WTKS 1290 am Radio. (Listen on the Internet www.neversettleforless.net). NSL, is a motivational and self-improvement “call in” live talk show, where the topics are intended to make you ...healthy, wealthy and wise.