Savannah, Ga., known worldwide for its historic architecture and cultural richness, has a grittier but no less important asset: the Port of Savannah, a massive engine helping to drive the modern global economy.Destination 2017: San Diego
It’s about six o’clock on a hazy July morning. Seven miles out in the Atlantic off the ribbon of the Georgia coast, I can barely see Tybee Island, with its picture-perfect lighthouse, hovering to the west like a mirage in the oblique light of dawn. I’m on a small boat motoring alongside the MSC Lisbon cargo ship. About 20 feet above me, a crew member, his face coated with grease, drops lacquered wooden slats strung along two thick ropes, a ladder design unchanged since the 19th century, against the steel hull of the Lisbon. He beckons me to climb up to a black hole in the side of the ship.
Later, Trey Thompson, president of the local river pilots’ association, with 25 years of experience guiding cargo ships up the Savannah River, will show me a picture from six or seven years ago. In it, the ladder is cut in two places and hanging by a thread after 12-foot swells caused the pilot boat to surge upwards and slam against the cargo ship. About halfway up, Thompson dangled, hanging on for dear life. He says that the mortality rate for pilots who fall into the ocean while attempting to board a cargo ship is upwards of 90 percent.
Not great odds. But the ocean is calm today. I climb up the ladder without incident. Safely through the hatch in the side of the ship, up a short metal ladder and through another hatch in the floor, I’m standing in a long, curving hallway that stretches both left and right into the distance, perhaps the length of a football field. A lone figure in an orange jumpsuit comes running toward me.“Bridge?” he says.
I nod, and we’re off again, almost at a jog. Down the hallway, then a quick right into a cavernous room with giant, groaning machinery towering above—the engine room—then a few quick turns to an elevator, which goes up until we are 10 stories high and emerge onto the bridge. Captain Piotr Lach, a short, stern fellow, and his tall and equally stern first mate greet us. They offer coffee, with apologies that they’re out of espresso after a long voyage from South Korea through the Panama Canal. They’ll resupply in Savannah, their first port of call, when they offload their cargo.
There’s a lot to unload: Cargo containers are stacked almost to bridge level—about 50 feet above the deck—and they continue into the hold of the ship, below the water level. But they represent only a tiny fraction of the estimated $2.7 trillion of imports that enter the U.S. from abroad every year.
Ten or 20 years ago, the city of Savannah was best known for its historic antebellum architecture, Lowcountry cuisine, nighttime trolley “ghost tours” and the eccentric cast of characters featured in John Berendt’s best-seller Midnight in the Garden of Good and Evil. But as the first major port of call on the Eastern Seaboard for many vessels, Savannah has become a linchpin in the South’s manufacturing boom. In terms of the annual growth of container cargo volume, it far outpaces the nation’s other major ports such as Los Angeles, New York and Houston. Add in uniquely advantageous river access, more than two dozen massive cranes, integrated rail lines, easy access to highways and warehousing, and the Port of Savannah has become a massive economic driver in Georgia, supporting some 369,000 jobs around the state, according to Georgia Ports Authority COO Ed McCarthy.
“Years ago it looked like a disadvantage that you had to go 20 miles upriver to get to the port,” says McCarthy. “Now that other ports are dealing with truck congestion through the city, the best thing about the Port of Savannah is that we actually sail right past downtown on the river, and then we burst out of the city on the west, five miles from I-95, seven miles from I-16.”
A consequence of this transportation convergence is that Savannah, with a population of just 147,000, is now one of the largest container ports in the country. In the mid-’90s, perhaps a few hundred thousand TEUs (20-foot equivalent units, the standard measure of container volume) passed through the port annually. That number is now about 4 million TEUs per year, according to McCarthy. And Georgia Ports Authority executive director Griff Lynch says the port is experiencing steady growth, roughly 7 percent year-over-year for the fiscal year ending in June 2017. Savannah is still considerably smaller than its largest competitors; Los Angeles and Long Beach account for a combined almost 14 million TEUs of containers, while New York handles around 5.5 million. Still, the fact that a small city is so close to one of the three biggest container ports in the country is remarkable, and means that Savannah has a disproportionate economic impact on the region.
The spike in container growth didn’t happen until 2004, when labor unions went on a massive strike on the West Coast and cargo traffic got diverted to the East Coast. “It was a pivotal year for the port,” says Trip Tollison, president and CEO of the Savannah Economic Development Authority. “We were the first port of call.” The strike caused many Asian companies, which had previously been shipping exclusively into the West Coast, to begin working with Savannah. Today all three of the world’s biggest shipping alliances—the Alliance, 2M Alliance and Ocean Alliance—call on Savannah.
The Georgia Ports Authority, the state-owned, for-profit company that operates the Port of Savannah and several smaller shipping hubs on the Georgia coast, itself has a valuation of around $2 billion, and because it is owned by the state, it is required to reinvest all of its profits, roughly 45 percent of its annual revenue, back into the operation of the port, according to McCarthy. The reinvestment goes to improvements to the rail connections, purchases of new cranes, land acquisitions and shifting some operations from diesel to electric power to reduce the port’s environmental impact.
“The Georgia Ports Authority continues to look forward to expanding its market share,” says Jeff Humphreys, director of the Simon S. Selig Jr. Center for Economic Growth at the University of Georgia’s Terry College of Business. “Recent initiatives [by the port] have been rail-focused, and they are extending their rail advantage into Alabama, Tennessee and Kentucky by building inland terminals in north Georgia.” Improvements to the Savannah rail connection by themselves should allow the port to double the volume of cargo it puts on freight trains to somewhere around 1 million TEUs annually. “That’s really going to give it a good entry into the Midwest,” Humphreys says.
While the port has been one of the biggest job creators in the region, other factors have helped Savannah flourish in recent years. The first is its oldest: Beautiful historical architecture draws millions of tourists to the city annually. Another is jet manufacturer Gulfstream, headquartered here and the city’s largest single employer. And third is the Savannah College of Art and Design, one of the top art schools in the world. “For a community of our size to have four incredible attributes—that are institutional, that have been here, that have such a significant impact on the community—really gives us diversity and an international flavor,” says Tollison.
Back on the bridge of the Lisbon, the focus is on more immediate concerns. After taking in the view for a moment—water as far as the eye can see in three directions and that thin ribbon of land due west—the captain turns over navigation to the river pilot. The giant ship churns forward at 15 knots. As the sun rises, the land draws closer. The pilot, occasionally shouting a heading to the helmsman, guides it into the river channel. Soon the Tybee Island lighthouse is to the port side of the ship, then slips by behind us. The pilot and captain glance back and forth between the river channel and an iPad with a digital display showing depths, headings, other ships and velocity. While still a mile or so out to sea, the pilot begins making adjustments to account for the fact that the Lisbon will have to pass by the Seamax Norwalk, which is almost as big, on its way down river and out to sea.
The Norwalk soon motors past, carrying some of the roughly $2.2 trillion of goods the U.S. exports each year. To starboard, there is a small U.S. Navy barge with a crane, claw and crew of divers. On its deck are two large, rust- and water-damaged slabs of wood and iron, the remains of the CSS Georgia, a Confederate warship scuttled in the river at the end of the Civil War. Navy divers are salvaging it to help clear the channel for a nearly $1 billion project to dredge and deepen the river to allow the largest ships traversing the Panama Canal to dock in Savannah. Among their discoveries: more than 130 pieces of unexploded ordinance.
The Georgia slides by, then the sultry Savannah waterfront, a mix of colonial commercial buildings and modern hotels that help draw more than 14 million tourists to the city each year, drifts into view on the port side, soon followed by industrial and dock facilities. When the neo-Panamax COSCO Development, the largest ship to ever dock on the Eastern Seaboard, arrived in early May, hundreds of people lined the river walk to watch it sail by. For the Lisbon it’s just business as usual. Then we head under a bridge, with a scant 15 feet or so of clearance, and the port proper appears. Docks for loading and unloading thousands of containers stretch for miles.
The port looks and sounds like a future ruled by machines. Gigantic cranes, so large that they show up as mountains on airplanes’ topographic displays, ease into position alongside the incoming cargo ships, and with thrumming wires, they set to whip containers on and off the ships. Beyond, rows of containers stack six or eight stories high, and more cranes roll about on gigantic wheels and chime cheerily to warn the more than 1,100 human workers of their movements. The biggest cranes, 26 in all ranging from 180 to 196 feet tall, move the containers off the ships to the ground and waiting trucks, which bring them to the smaller cranes, which stack them in neat rows or load them onto the chassis of other trucks or waiting CSX or Norfolk Southern freight trains. Four more cranes have been ordered, and once they’re installed, the port should be able to move more than 1,000 containers per hour. The Georgia Ports Authority is plowing $125 million into joining the two rail lines to speed cargo transfers.
Within six miles of the port lies more than 50 million square feet of warehouse space for companies including Home Depot, Ikea, Target, Pier 1 Imports and Dole. Another 8 million square feet of warehouse space is under construction, but even so the vacancy rate is around 2 percent because of continuously growing demand, says Stacy Watson, general manager of economic and industrial development for the Georgia Ports Authority. For companies, “distance equals dollars,” Watson says, so the closer the warehouse, rail and trucking facilities are to the port, the greater the cost savings. And because the Port of Savannah is built up the Savannah River, and on the far side of the city, trucks and freight trains are able to depart directly on highways and rail lines without passing through residential urban areas, and there are few obstructions to moving their cargo directly on to its next destination.
Still, despite all of the positive economic effects of the port, there are storm clouds on the horizon. To efficiently handle the largest container ships that are now able to traverse the Panama Canal thanks to its recent expansion, the river channel must be deepened. The largest ship the port can currently handle is around 14,000 TEUs, and even then, the ships have to sync their journeys with the tide. To eliminate that barrier, the U.S. Army Corps of Engineers is dredging and deepening the channel. But that endeavor is projected to be $267 million over budget; its completion date has been pushed back to January 2022. Moreover, while the federal government should cover around 75 percent of that cost overrun—something that the Trump administration is loath to do, according to the Atlanta Journal-Constitution—the state is on the hook for an additional $67 million. “It took 17 years to get the original project approved because of bureaucratic delays,” U.S. senator David Perdue, Republican of Georgia, told the paper in early April. “There’s no doubt Washington caused this cost estimate to increase too. We now have an outsider business guy in the White House who understands we need to get Washington moving at a business pace.” But an expected infrastructure package from the Trump administration is nowhere to be seen, and Trump has instead suggested that the federal government should transfer infrastructure development costs to the states.
Even if the channel-deepening is finished on schedule, it only buys a few years before the port will have to expand further. And that expansion will be more problematic. The Talmadge Memorial Bridge, which crosses the river and under which all cargo ships must pass to reach the port, only allows 185 feet of clearance below it. This means that the largest ships currently in service, 18,000 and 20,000 TEU vessels, will be unable to reach the port, and 16,000 TEU ships could find their access limited, according to McCarthy. To accommodate these largest ships, the port will most likely have to expand to Savannah’s east, sacrificing its convenient access to road and rail networks. One answer may be entering into a joint venture with South Carolina to develop land on the north side of the river.
But perhaps the biggest challenge to the port’s continued growth is the possibility that Trump’s hard-line rhetoric on trade might translate into an international trade war. Trump reportedly began considering imposing tariffs of up to 20 percent on steel imports. “The United States has trade deficits with many, many countries, and we cannot allow that to continue,” Trump said in a June 30 Rose Garden appearance. “That’s why we have $20 trillion in debt. So we’ll be changing that.” At the same event, chief economic advisor Gary Cohn, said, “China has many predatory practices in the way they deal with us…. We’re forced to transfer technology into China, forced to have joint ventures in China. We have tariffs and nontariff barriers…[we’re] unable to own companies in China as well.” Placing tariffs on imports such as steel would inevitably provoke retaliatory responses from U.S. trading partners. And as tariffs on imports and exports rise, the volume of global trade would decline, which would mean the volume of goods flowing through American ports would shrink as well, jeopardizing those 369,000 jobs fueled by the Port of Savannah.
On a Monday night in a riverside seafood joint called Fiddlers Crab House, I spoke with several engineers who work at the port. Trump voters all, they were proud of their jobs. Working at the port was hard, they said, but the pay was good, and they felt like they were accomplishing something meaningful. When asked about their feelings of a possible trade war with China, though, they went quiet. Finally, one said, tentatively, that it wouldn’t be good for them. “Hopefully what we’ll be able to achieve is ‘fair trade,’” says port director Griff Lynch. “As far as being worried about it? We pay very close attention to everything that is happening. We cannot control it. We think that the Southeast will continue to outpace the rest of the nation in terms of growth.”
The Port of Savannah does have its allies. In late June it hosted a summit between U.S. secretary of agriculture Sonny Perdue and the agriculture secretaries of Canada and Mexico. In a joint statement, the secretaries said, “Our three nations are connected not only geographically, but through our deeply integrated agricultural markets. Our trading relationship is vital to the economies—and the people—of our respective countries.”
The full statement was as close as you can get to a reaffirmation of globalization in America today. And “it happened here in Savannah,” says Tollison. “That’s pretty cool. Good old Savannah.”
With connections to the port, city administration and the community’s business leaders, SEDA is the starting point for anyone wanting to invest or build a business in Savannah. 131 Hutchinson Island Road, 4th Floor, firstname.lastname@example.org, 912.447.8450, seda.org
The product of a partnership between SEDA and the city, the Creative Coast is a network and advocacy group for entrepreneurs, especially in the creative industries—a big business here thanks to all of the expertise flowing out of the Savannah College of Art and Design. 2222 Bull St., 912.447.8457, thecreativecoast.org
The operator of the Port of Savannah and other major shipping facilities and infrastructure in Georgia, the Georgia Ports Authority is a key point of contact for anyone involved in import/export or logistics in the Southeast. Jamie McCurry, senior director, administration and government affairs, email@example.com, 912.963.5562, gaports.com
Set in a former 1930s bus terminal and retaining its original Art Deco décor, the Grey has emerged as Savannah’s top dining destination, offering modern takes on Southern favorites, such as foie gras and grits. Reservations are a must. 109 Martin Luther King Jr. Blvd., firstname.lastname@example.org, 912.662.5999, thegreyrestaurant.com
This restaurant takes the antique seriously, and since its home is the Planters Inn, which resides in a supposedly haunted 18th-century mansion, this is appropriate. The menu comprises Southern classics such as shrimp and grits and braised pork shank with macaroni and cheese and collard greens. 29 Abercorn St., 800.554.1187, plantersinnsavannah.com/olde-pink-house-restaurant
The much-lauded Elizabeth on 37th features local ingredients—wild mushrooms and Half Moon River clams—and a setting, like Savannah’s historic district itself, that’s genteel. 105 East 37th St., email@example.com, 912.236.5547, elizabethon37th.net
A luxurious offering from hotelier Richard Kessler, Mansion on Forsyth Park is centrally located just off Spanish moss–draped Forsyth Park and done up in an old Southern style mixed with modern touches. A cooking school is available for those interested in experimenting with Lowcountry cuisine. 700 Drayton St., 912.238.5158, mansiononforsythpark.com
Set off Lafayette Square, this historic 17-room inn drips with Southern charm. It offers amenities such as evening wine and hors d’oeuvres and a Southern breakfast in the morning. 330 Abercorn St., firstname.lastname@example.org, 912.209.5259, hamilton-turnerinn.com
Housed in an 1892 mansion, Kehoe House is consistently rated one of the top small hotels in the country. Between a made-to-order breakfast and its proximity to the Savannah River and top nightlife and dining, the Kehoe is an excellent home base for exploring the city. 123 Habersham St., 912.232.1020, kehoehouse.com
As one of the preeminent art and design schools in the world, SCAD has a permanent collection that includes key works by African American artists and a fascinating assemblage of 19th- and 20th-century photography. At any time it has visiting exhibits by more than a dozen leading modern artists. 601 Turner Blvd., email@example.com, 912.525.7191, scadmoa.org
Founded in 1869, this private yacht club offers tennis, swimming, dining and yachting services. While the club is not open to the public, you can inquire about joining by contacting them directly. 730 Bradley Point Road, 912.644.4100, savannahyachtclub.org
In a city known nationally for its food, the best way to experience it all is at the Food & Wine Festival, held November 6–12, featuring more than 300 vendors and offering master classes, dinners hosted by celebrity chefs and an entire session devoted to Southern barbecue. 912.232.1223, savannahfoodandwinefest.com