Centers near port thrive in Georgia

GARDEN CITY, Ga. -- The business of marine transport in Garden City at the nation's fourth-largest container port is a study in numbers.

Thirty-one oceangoing container vessels berth at the nearly 10,000-foot-long Garden City terminal each week. More than 8,000 trucks arrive and depart from the terminal daily. Garden City handled 3.3 million 20-foot containers last year, over 10 percent more container cargo than in 2013.

There are other numbers that are just as vital to this growing business but not nearly so visible. Hidden behind the green curtain of Georgia pine forest that surrounds the terminal are 45.3 million square feet of logistics, storage and distribution centers, according to the Georgia Ports Authority, the terminal's owner and operator.

"The link between the terminal and the distribution centers is essential to our operations," said Curtis Foltz, executive director of the Georgia Ports Authority. "Our competitiveness is based on efficiency and connectivity, making sure products don't sit around. The real estate developments are a partnership that makes expanding trade here possible."

Owned, leased or managed by some of the most recognizable brands in the country -- Wal-Mart, Ikea, Home Depot, Target and Pier 1 Imports -- the immense buildings are essential links in the flow of farm, construction and manufactured products streaming out or into the country through the Savannah River port, one of the country's most modern maritime transport installations.

Garden City's traffic, which includes everything from containers of frozen Georgia chicken parts heading to Asia and stuffed doggy beds coming in from China, is about evenly divided between exports and imports.

The largest distribution center is the 2.5-million-square-foot facility owned by Schneider Logistics, a unit of the national trucking company. Wal-Mart operates a 2-million-square-foot center in Statesboro, 55 miles west. Both are expansive enough to completely enclose two typical suburban shopping malls, or all the businesses in Savannah's historic downtown, which lies just downstream.

Other large forested parcels near Savannah will be used to build more distribution warehouses. OA Logistics/JLA Home, a subsidiary of the privately held California-based E&E Co., announced plans in January to build a 1.1 million-square-foot e-commerce fulfillment center near the port.

Hundreds of miles away, construction of other distribution centers has been influenced by the port, according to the Georgia Department of Economic Development. Last year, Bed Bath & Beyond opened a $50 million, 810,000-square-foot distribution center in Jefferson, northeast of Atlanta and 230 miles away. Wal-Mart is constructing a $102 million, 1.2-million-square-foot distribution facility in Union City, south of Atlanta and 250 miles from the Savannah port.

Demand for new warehouse and distribution space is intensifying, said John Petrino, director of business development for the Georgia Ports Authority. Vacancy rates, which were as high as 18.6 percent in 2009, dropped to 5.4 percent last year, according to the port. That occurred even as 11 new or expanded distribution centers, enclosing more than 3 million square feet, opened last year in or near Garden City, the Ports Authority said, accounting for 1,950 new jobs.

"The economy is recovering and you see that in the amount of freight moving through these buildings," Petrino said.

Another significant factor behind the flurry of activity is the expansion of the Panama Canal, a $6 billion project to add a third set of much larger locks to enable bigger container ships to navigate the maritime shortcut across the isthmus.

The canal expansion, which is scheduled to open for commercial traffic in 2016, is expected to double the volume of goods making the 50-mile crossing each year to 660 million metric tons, the Panama Canal Authority projects. Two-thirds of that traffic would be dispatched or received by U.S. ports along the Gulf of Mexico and Atlantic coast.

Anticipating the growth in canal traffic, Georgia and its Ports Authority spent a decade and $758 million to improve highways, purchase new cranes, improve rail connections and reconstruct the terminal ramps and traffic patterns to compete. A dredging contract was signed this month as part of a $706 million state and federal project to expand the port and deepen the Savannah River.

Georgia's share, $266 million, was approved by the Legislature. Congress authorized the federal share in a water bill last June. President Barack Obama requested $42 million for the project in this year's budget proposal. Georgia Gov. Nathan Deal, a Republican, has repeatedly told reporters that he is confident Congress will approve the request.

Companies are leery about opening the interior of their buildings to public view, which Petrino attributed partly to the proprietary nature of some of the newer equipment used to move and ship products. Even the systems for storing freight and organizational warehousing techniques are tightly held, a reflection of slim profit margins and steep competition.

Rodney Dickey, the president of OA Logistics and chief operating officer of JLA Home, noted these features of the business while walking through the company's 679,000-square-foot distribution center. Electric and propane-fueled forklifts whirred through the building that is longer than a five-stroke golf hole, has a 32-foot ceiling and smells like new cardboard.

A portion of the building contains a printing shop for art sold by the import company. Another portion is an area for Chinese-made products that require final assembly and packaging. About 110 people work in the 11-year-old building, housed on 41 acres, which the company purchased in 2009 for $28 million.

OA Logistics and its parent company are expanding so quickly that planning for a second new building has started.

"We'll need another million square feet," Dickey said. "We're looking five years ahead. These centers take 16 months to build so we have to start thinking about it now."

SundayMonday Business on 03/29/2015

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