Dredging the Port of Savannah to Deepen Georgia's Connections Worldwide

• Jurisdiction: United States,Federal,Georgia
• Citation: Vol. 42 No. 1
• Publication year: 2013

DREDGING THE PORT OF SAVANNAH TO DEEPEN GEORGIA'S CONNECTIONS WORLDWIDE

David William Bobo Mullens, III^*

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Georgia must invest heavily in Savannah to protect the Port of Savannah's rising role in international trade. The Port of Savannah is the fourth largest cargo port in the United States¹ and processes $54 billion worth of containerized cargo a year.² This yields Georgia approximately $18.5 billion in statewide income, sustains 100,000 Metro Atlanta jobs,³ and maintains another 250,000 jobs statewide, making the Port of Savannah a key transportation hub for Georgia.⁴ But the looming completion of the Panama Canal Expansion Project in 2015 puts Savannah's position as a go-to port at risk. The Expansion Project will build a third tier of locks in the Canal in order to accommodate cargo loads three times larger than the current capacity.⁵ As of now, the Port of Savannah is not deep enough to process any of these larger Post-Panamax ships. This is an issue because, as pointed out by Roberto Roy, Panama's Minister for Canal Affairs, the expansion project is a game changer, and ports on the Eastern Seaboard that fail to deepen their ports will be rendered noncompetitive by their inability to handle the larger ships.⁶ Fortunately, as also noted by Minister Roy, Georgia can do two things to protect Savannah. Physically, Georgia can invest in the swift dredging of the Port. Strategically, Georgia can strengthen its trade alliance with Panama through new negotiations that draw on the historically

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strong relationship between Panama and Georgia that dates back to President Carter's role in transferring the Panama Canal.⁷

The Port of Savannah must be dredged for Georgia to remain a top destination for international trade. The Port of Savannah's navigation channel is currently forty-two feet deep. This is five feet less than the forty-seven feet needed to accommodate the Post-Panamax ships that will travel through the Panama Canal after the Panama Canal Expansion Project is completed in 2015.⁸ Post-Panamax vessels are container ships too large to fit through the Panama Canal's current locks.⁹ The ships are twenty-five percent longer and fifty percent wider than current transports, handle two to three times the cargo size,¹⁰ and offer shipping companies significantly reduced fueling costs.¹¹

The ability to handle Post-Panamax shipping is critical for modern ports because Post-Panamax ships are estimated to make up sixty-two percent of total container ship capacity by 2030.¹² Whichever ports offer deep channels first are going attract more international clients and have more time to develop client loyalty. As of now, the only Eastern seaboard ports able to process Post-Panamax shipping are Norfolk, Virginia and Baltimore, Maryland.¹³ That leaves Miami, Florida, and Jacksonville, Florida; Charleston, South Carolina; Houston, Texas; New York, New York; and Savannah racing to deepen their ports.¹⁴

Savannah needs the full support of Georgia's leaders to ensure Savannah's status as an internationally competitive port. Fortunately, political leaders from both major parties have recognized the critical nature

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of the Savannah Harbor Extension Project (SHEP)¹⁵ and have worked hard on the project's behalf. Governor Nathan Deal stated that deepening the Port is a "matter of urgency" for the state.¹⁶ He backed up those words by seeking $50 million in upfront funding for SHEP in Georgia's 2014 budget.¹⁷ Atlanta Mayor Kasim Reed said that dredging project's successful completion is "vital for the economy of metropolitan Atlanta, the state of Georgia and the Southeast, and will allow us to remain competitive now and in the future."¹⁸ Mayor Reed followed up those words with extensive lobbying on behalf of Savannah statewide and nationally.¹⁹

Georgia has faced three significant obstacles in getting SHEP underway. First, it has been difficult to procure sufficient funding. Financially, SHEP is estimated to cost $652 million to complete.²⁰ That hefty price tag requires federal help. General federal funds were allocated back in 1999²¹ and were set at $390 million.²² Of that amount, the federal government has delivered only $1.28 million.²³ But President Obama recently assured Savannah of the federal government's commitment to the project. President Obama promised full support to expedite the modernization of the Port of Savannah and

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helped accelerate the project past bureaucratic federal reviews of the project in 2012.²⁴ Furthermore, the U.S. House recently passed the 2013 Water Resources Reform and Development Act, which approved the final steps needed to release federal funds for the project.²⁵ The rest of the $652 million is to be paid by the state of Georgia. The state has already set aside $231 million in state funding for the project.²⁶ And as Governor Deal made clear with his allocation of $50 million in Georgia's 2014 budget, Georgia is ready to act now.²⁷

The second main obstacle has been state regulation. The Savannah Harbor Expansion Project faced state regulatory action from Georgia and South Carolina. In 2011, the project required approval from the Georgia Environmental Protection Division to receive a water quality permit.²⁸ That same year, environmental regulators in South Carolina denied the project a permit required for the deepening of Savannah's river channel,²⁹ that permit application failed, despite support from the Army Corps of Engineers. It ultimately took two years for this settlement and other regulatory concerns to be approved in a South Carolina District Court.³⁰

The third main obstacle has been environmental lawsuits. Organizations dedicated to protecting coastal wildlife areas, such as Ducks Unlimited and the S.C. Conservation Bank, sought an injunction to prevent the dredging of the Savannah River. These organizations and others like them feared that dredging the port would lower oxygen levels in the water and deteriorate the quality of nearby aquatic life.³¹ But in early 2013, as part of the mediation between South Carolina and the Port of Savannah, these environmental

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organizations agreed to settle and allow the deepening project to continue.³² They did so after the Georgia Ports Authority agreed to put $35.5 million dollars towards environmental mitigation efforts.³³

Having overcome the obstacles presented by funding, state regulation, and environmental lawsuits, the tentative target completion date is set for 2017.³⁴ This puts Savannah a year behind New York and Miami, both of which plan to be ready by 2015, a year ahead of Charleston, which may be ready in late 2017,³⁵ and well ahead of other ports on the Eastern Seaboard.³⁶ At the very worst, Savannah will be in the middle of the pack of ports coming out with Post-Panamax capacity, and it remains the only port with world class infrastructure, consisting of two Class 1 railroad facilities on terminal with access to Hartsfield-Jackson Airport's three cargo complexes.³⁷

Even as Georgia races to stay competitive physically with the timing of Savannah's expansion, it is critical strategically that Georgia draw on its connections to Panama to promote transnational co-economic development. Georgia has a rich history with Panama, beginning with Georgia-born President Jimmy Carter transferring the Panama Canal to Panama in the 1977 Torrijos-Carter Treaties.³⁸ Today that connection continues with many of

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Panama's prominent citizens attending college at Georgia's Universities.³⁹ Panama's Canal Affairs Minister Roberto Roy, for example, is a proud graduate of Georgia Tech.⁴⁰ These sorts of ties run parallel to a robust trading relationship, in which Georgia exports $175 million worth of goods to Panama and imports $29 million worth of goods in return.⁴¹

The strong connections between Panama and Georgia should be used to forge stronger trade agreements for Savannah. Currently, Georgia and Panama's relationship is framed primarily by two government organizations, the Georgia Ports Authority and the Panama Canal Authority. These two organizations are empowered to make international trade...