GPA sits well with trade mix

By: | at 07:00 PM | Channel(s): Ports & Terminals  

By Karen E. Thuermer, AJOTIf recent Georgia Ports Authority (GPA) throughput figures are any indication of how far the economy has improved since the recession hit in 2008, businesses should have a reason to feel optimistic. Overall GPA throughput rose 19.9 percent in 2010 versus declining minus -10.3 percent in 2009.
For Calendar Year 2010, exports, which accounted for 52.2 percent of total trade, weighed in at 1,149,215 TEUs versus 1,026,802 TEUs in 2009. Calendar Year 2010 imports accounted for 47.8 percent of the total trade at 1,051,256 TEUs compared to 883,554 TEUs for Calendar Year 2009.
Besides the solid up tick in tonnage, these figures indicate a good balance of trade through GPA ports as well.
And mirroring those optimistic figures, John Wheeler, senior director of Trade Development, Carrier and Non-Container Sales, says that at GPA these days every month seems like a record month.
“We’ve never had a better November and December than we just had,” he exclaims.
An indication that trade, overall, is improving is the fact ships are running 95 percent full, he says.
East Coast Advantage
One of the reasons for GPA’s success is U.S. East Coast seaports like Savannah are attracting more business away from U.S. West Coast ports and carriers are deploying larger ships.
Wheeler explains both factors are due to an overall game change ocean carriers made in response to worldwide recession. By deploying larger ships, steamship lines can reduce costs.
“For instance the cost for a 40-foot slot on an 8,000 to 8,500 TEU ship is only 60 percent of the cost of 5,000 TEU ship,” he states. “Going the other way a 13,000 TEU ship is about a 40 percent savings over a 8,500 TEU ship.”
Then to capture the East Coast business, steamship lines began traversing the Suez Canal in greater numbers simply because they could not fit through the Panama Canal. But in doing so, carriers found an additional benefit now referred to in the industry as double, triple or quadruple dipping.
An example of triple dipping would be a service that starts in South or Central China drops a shipment at, say, Singapore for transshipment. They then pick up another export box at Singapore and discharge it in, say, India. Then in India they take that container off and fill it with another container box for the U.S. East Coast.
“If you add up the freight you’re going to get on each leg—China to Singapore, Singapore to India, and India to the U.S. East Coast – the steamship line will probably earn at least three times what it would have gotten on a box just going from that Asia base port to the U.S. East Coast,” Wheeler says.
It is this type of business on which GPA has grown its business, particularly at the Port of Savannah.
Currently, the Port of Savannah is served by five such double, triple and quadruple dipping strings: the TP3 (CMA CGM and Maersk); AEX service (Grand Alliance), SZX Service (New World Alliance), and the NATCO-4 (CKYH service); and the MSC Service, a European service. All arrive on a weekly basis and utilize Post Panamax ships.
According to Wheeler, an additional service will be coming on line before July 1st—a Suez Post Panamax service.
“And probably by this time next year there will be two additional services after that,” he says. “Ships are getting bigger and we are getting new services even before the Panama Canal expansion has opened. The Panama Canal will only add to that.”
In general, today 16 services go from Asia through the Panama Canal to the U.S. East Coast. Of those, 15 call at the Port of Savannah. With the Panama Canal expansion in 2014, the GPA expects to see even more.
Expansion Needs
Of course, this provides the argument as to why the Savannah Harbor Expansion Project (SHEP) is so critical to the GPA. (See related story: “Georgia Ports Authority Prepares for SHEP.”)
In order for GPA to grow its business, it must be assured the Port of Savannah can accommodate as many of the largest Post Pana

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American Journal of Transportation