From Panama to Coweta: A potential boon
by W. Winston Skinner
Improvements to the Panama Canal could have a positive economic impact on Coweta County businesses and industries – if improvements also are made to the Port of Savannah.
Efforts have been under way for several years to deepen Savannah’s port, with an eye toward serving larger ships that will come through the Panama Canal when a major improvement project is completed there in 2015. Georgia Gov. Nathan Deal has been a strong proponent of the Savannah project.
Millions of dollars in components and products come through the ports and then to Coweta, and millions of completed products are exported from Coweta to the ports for shipping around the world.
“It is a simple but important connect-the-dots situation,” Candace Boothby, president of the Newnan-Coweta Chamber of Commerce, said in an interview last year. “Coweta has major international businesses that utilize the Savannah port to import and export tens of millions of dollars of products.”
The impact of the ports “creates new jobs and stabilizes current employment in Coweta,” Boothby said. She said the Savannah Harbor Expansion Project “is absolutely critical to the continued success of Coweta industries.”
Panama’s Minister for Canal Affairs, Roberto Roy, recently visited Savannah where he talked with Georgia Ports Authority officials about the progress of the canal expansion and the project to deepen the Savannah Harbor to 47 feet. Both projects will accommodate larger, more efficient container ships.
“With the historic expansion of the Panama Canal nearing completion, I applaud Georgia for making the improvement of its port infrastructure a fiscal priority,” said Roy, who also serves as chairman of the board of the Panama Canal.
The Record of Decision, signifying final federal approval for the Savannah Harbor Expansion Project, was issued in October 2012. The Record of Decision also means that federal funding for construction can be allotted in the FY2014 budget.
“This final clearance affirms this project carries national significance. It is a major milestone,” said Curtis Foltz, GPA executive director. “The next step is for Congress to approve the project budget and fund the deepening.”
“The expanded Panama Canal will play a pivotal role in the future of global commerce, instituting a sea change in the efficiency of Trans-Atlantic trade,” said Deal, who met with Roy earlier in the week.
The governor noted Savannah’s port – which also includes facilities in nearby Brunswick – is “the busiest terminal on the East Coast for U.S. export tonnage.” Deal termed as “vital” the Georgia port’s expansion “for the larger ships that will soon transit via Panama.”
The Panama Canal expansion will increase the maximum possible draft of vessels traveling to and from the U.S. East Coast via Panama from 39.5 feet to as much as 50 feet in tropical fresh water. Vessel capacity will also increase from the current limit of up to 5,000 twenty-foot equivalent container units (TUEs) to up to approximately 13,000 TEUs.
The Panama Canal work is scheduled for completion in 2015.
Robert Jepson, Georgia Ports Authority board chairman, said U.S. Army Corps of Engineers studies indicate the port deepening will reduce shipping costs by at least $213 million a year.
“The 5.5-to-1 benefit-to-cost ratio demonstrates that the expenditure would be a wise investment of federal dollars,” Jepson said.
The Georgia Ports Authority renewed its Memorandum of Understanding with the Panama Canal Authority in 2011. It was first signed in 2003.
This strategic alliance allows both authorities to improve services for customers and generate new economic opportunities for Georgia and the eastern half of the United States. Areas of cooperation include, among others, joint marketing efforts, exchange of data, market studies, expansion plans, training and technology.
While the Port of Savannah regularly handles vessels that are too large to transit the Panama Canal, these vessels currently cannot load to their capacity.
Boothby said implications of the Panama Canal upgrade are “where the dot-connecting occurs.”
“The Panama Canal is being widened and deepened to accommodate more efficient super-cargo ships, but these vessels require ports that can accept them in order to do business there,” she said.
Boothby said the Savannah Harbor Expansion Project “is absolutely critical to the continued success of Coweta industries.” If SHEP does not come to fruition, “these gargantuan ships will be forced to find other ports to unload their cargo,” she said.
Deal made similar remarks at the Georgia Farm Bureau annual meeting in Jekyll Island in December.
“If the ships can’t stop at our port, they will be forced to continue up the East coast, and we will lose out on that business,” Deal said. “We will lose out on the efficiency and the economy of reduced shipping costs, and as a result, our state will suffer.”
Georgia’s deepwater ports and inland barge terminals support more than 352,000 jobs throughout the state annually and contribute $18.5 billion in income, $66.9 billion in revenue and $2.5 billion in state and local taxes to Georgia’s economy.