In April of this year, the Corps released final documentation related to the Savannah Harbor Expansion Project, which is being reviewed by state and federal agencies, as well as the general public.
Less than two weeks after the Corps released its report, Gov. Nathan Deal went to Savannah to announce that the state’s FY 2013 budget would include $46.7 million to help pay for the deepening of the harbor, bringing the state’s total financial commitment to the project to $181.7 million.
The Corps wants to increase the depth of the Savannah River by another five feet. It’s a project that is expected to cost $652 million, but a project that will have economic benefits that reach even to Rome.
Greater Rome Chamber of Commerce President Al Hodge said deepening of the harbor at Savannah is clearly a priority for the local business community.
“Because of the current and potential for accessibility, we view it as a state game changer for jobs and economic development,” Hodge said.
Carpet makers, auto manufacturing suppliers and others benefit from the transportation corridor from Savannah to the Coosa Valley.
Floyd County industries did $163.73 million in port business during the 2011 fiscal year.
The top exports included petroleum and fuel oil products, followed by mixed-metal scrap. The top imports were auto and truck tires, steel wire rods and auto parts.
The top three port customers by volume in Floyd County were Pirelli, OTR Wheel Engineering and Advanced Steel.
The Selig Center for Economic Growth at the University of Georgia completed a study in early May, indicating that Georgia’s deepwater ports supported more than 352,100 jobs across the state in 2011, that’s almost one on 12 jobs across Georgia.
According to the UGA study, the ports account for more than 23,700 jobs across the 15-county Northwest Georgia region and 3,360 jobs in Floyd County. That’s 7.9 percent of the jobs in Greater Rome that can be tied directly to the ports in Savannah, and to a slightly lesser degree, Brunswick.
In Floyd County, those jobs include positions at Suzuki, Neaton Rome, F&P Georgia, Pirelli, OTR Wheel Engineering, Southern Bracing Systems, Emilia Imports and others.
John Godfrey, vice president for logistics and purchasing at Pirelli Tire in Rome, said the company imports natural rubber and steel cord and other raw materials from various sites around the world. “The main thing that we import is finished tires,” Godfrey said. “The production that we have here in Rome represents less than 10 percent of what we sell.”
The port of Savannah is critical to Pirelli’s operations in the United States because it has closed several distribution centers in Chicago, Detroit, Louisville and Kansas City in recent years, consolidating its East Coast distribution in McDonough.
“Anything that improves the efficiency of the port of Savannah brings in bigger ships, more direct service, only helps our operations more,” Godfrey said. “The shipping lines were using rail to bring the containers to the warehouses and it was taking a long time. All the service from Savannah to McDonough is by truck. It’s four or five hours and we can get our containers very quickly.”
The Pirelli executive said the company has concentrated all of its activity in McDonough and that will continue.
Advanced Steel Technology, West Hermitage Road, imports heavy steel fabrications through the port of Savannah.
Vice President Blanchard Howard said anything to expand the port activity will help his company.
“That is only a small part of our business. Those parts that we bring in just complement the parts we make here that go out to our North American customers,” Howard said.
Alan Horne at Suzuki said close to 50 percent of the four-wheelers produced at the plant on Technology Parkway are exported, though not all of it via ship. Some of them are sent by truck to Mexico and Canada.
Horne said the port at Savannah is extremely important to Suzuki. “The vast majority of our product that is being exported by ship goes through the port of Savannah, a little bit of it goes through the port of Charleston,” Horne said. “On our import side the vast majority of the components that we import are coming through Savannah, too.”
Horne said Suzuki does get some state tax benefits by using the port of Savannah, but that isn’t the primary factor in determining how product is moved overseas. “Our primary determining factor is actually the ships and the ports that they call on after they leave,” Horne said.
Australia and New Zealand are leading destinations for the four-wheelers made in Rome, followed by the various nations in Europe.
When talking about the deepening of the port at Savannah, it’s also important to remember that by sometime in 2015, the new wider locks being added to the Panama Canal will be open for commercial traffic.
Horne said if material being imported to Suzuki from Japan and other Asian nations comes in one of the new supertankers and it is unable to port in Savannah, it will add to the cost of shipping product to the Rome plant. “That inland freight adds a lot of unnecessary expense because it’s a lot cheaper to float stuff on a big ship,” Horne said.
Bob Owens Jr., chief financial officer at OTR Wheel, said his company imports wheels and tires for use in off the road applications. The Rome firm purchases from suppliers across the world and then resells the equipment largely to agricultural and construction types of businesses.
“One thing we enjoy about Savannah is the tax credit,” Owens said. “If you’re a Georgia corporation and you bring a product in through Savannah you get a tax credit on the state income tax.”
Piero Barba, Emilia Imports of Rome, brings between 16 and 22 20-foot containers of wine through the
port of Savannah every year. “We could bring more but sometimes the harbor is not deep enough,” Barba said. “When it comes on a very large vessel they have to stop in New York and then come down by rail or by truck increasing freight costs.”
Barba said he’s been talking to industry executives and politicians about trying to get Northwest Georgia a seat on the 13-member Georgia Ports Authority Board of Directors. “We don’t have any representation,” Barba said.
With the completion of the U.S. Army Corps of Engineers financial and environmental review, the document still needs to be signed off on by the Environmental protection Agency, the Department of Commerce and the Department of Interior.
Once full federal approval has been obtained, the project still would have to be funded. Ports Authority officials indicate the anticipated budget will include a 60-40 split with the federal government picking up the heavier share of the expected $652 million price tag.
The state of Georgia’s $181 million commitment still leaves about $80 million yet to be committed by the state.
The U.S. Army Corps of Engineers allowed a total of $3.08 million for the project in FY 2012 and the Obama administration included $2.8 million for the harbor deepening in its Civil Works budget for FY 2013.
If the project were, by some means, fully funded in the next fiscal year, the project could be brought on line by 2016. That translates into an estimated three to four years of construction time.