The Georgia Ports Authority (GPA) wants to deepen the Savannah River shipping channel to accommodate larger ships carrying the growing volumes of cargo from India formerly sourced from China.
Deepening the channel to between 50 to 52 feet from the current 47 feet would allow the Port of Savannah to handle container ships as large as 22,000 TEUs; its current limit is 16,000 TEUs. The GPA this week filed a request for the US Army Corps of Engineers to perform a study on the potential dredging project.
“When that cargo shifts to India and that cargo starts flowing from India ... that’s five days faster to the US [than via the West Coast],” Griff Lynch, GPA’s CEO and president, said at Savannah’s annual State of the Ports event Thursday. “So in this new trade shift, we’re going to have a situation where no longer are we slower, but faster. Combine that with our landside efficiencies ... we have a win-win situation.”
Deepening Savannah’s shipping channel, which would take about 10 years to complete, would put the port on par with other major Southeast ports such as Charleston, which dredged Charleston Harbor to 52 feet in 2022, and the Port of Norfolk, which is on track to reach a depth of 55 feet next year.
Focus on India potential
The request for the Army Corps study comes 18 months after Savannah completed a $973 million project to deepen the harbor by five feet to 47 feet at low tide. That project took 25 years to execute and was based on a study of 8,000-TEU ships.
Lynch said further dredging would allow Savannah to capture business from India driven by the five-day shorter trip to the East Coast compared with the West Coast. US importers are increasingly looking to shift sourcing away from China and toward alternatives such as India and Vietnam. India’s population is younger, and the country has already attracted major manufacturing from Apple and Samsung, Lynch noted, saying India is on track to be the US’s number one supplier within the next 60 years.
But taking advantage of those shifting dynamics requires accommodating larger ships. “We have outpaced our growth,” Lynch said, adding Savannah continues to turn business away because its infrastructure cannot support ships larger than 16,000 TEUs.
GPA import volumes in 2022 were 2.2 million TEUs, up from 1.7 million TEUs in pre-pandemic 2019, according to PIERS, a sister product of the Journal of Commerce within S&P Global.
In addition to dredging the harbor, the Georgia Department of Transportation (GDOT) has developed its own plans to raise the Talmadge Bridge, the other major barrier preventing larger vessels from reaching the Port of Savannah. The GDOT is ready to begin raising the structure, with completion expected in early 2027. Although GPA helped fund the original study for the bridge raising, the estimated $150 million to $175 million project belongs to the GDOT, Lynch said.
Carriers taking notice
CMA CGM, for one, is desirous of having more port capacity available in the US. Speaking Wednesday in New York City, group chairman Rodolphe Saadé said he wants to be able to deploy to the US the types of megaships that already ply the trade between Asia and Europe. But US port infrastructure is maxed out at ships of 16,000 TEUs.
“Why did shipping lines go for big ships? Because of economies of scale,” Saadé said. “US ports cannot accommodate vessels of 24,000 TEUs.
“There are problems in US infrastructure to accommodate the big vessels like they do in Europe,” he added.
Saadé said greater capacity will be needed to the US East Coast as demand on the trans-Pacific trade from north and central China ebbs in favor of trans-Suez services from South and Southeast Asia.
“Our team in the US said we need space from Southeast Asia, we need space from South Korea, and we need space from India, and not as much from China,” he said.
