News

2016 Second Busiest Year for Georgia Ports

Georgia’s ports were on track to declare 2016 as its second busiest year. Although import and export volume was down for much of the year, the ports experienced an increase in traffic volume during the second part of the year. According to Griff Lynch, Executive Director of the Georgia Ports Authority, Georgia’s ports have benefited from the reopening of the Panama Canal, as well as the 2015 labor strikes on the west coast.

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FTZ #26 Operator Pratt & Whitney to Invest $65 Million in Columbus, GA. Facility

foreign-trade-zones

In June, 2016, the Georgia Department of Economic Development announced the significant investment of Pratt & Whitney, a world leader in aircraft design. The $65m initiative will go toward retrofitting and equipping their Columbus Engine Center to perform PurePower® Geared Turbofan™ (GTF) engine maintenance on-site.

“As the GTF engine continues to enter into service, it is critical that we have a strong maintenance, repair and overhaul network in place to support these engines,” said Joe Sylvestro, Pratt & Whitney’s vice president of Aftermarket Operations. “The Columbus Engine Center draws on decades of high volume engine maintenance experience and is well-positioned to provide the highest quality service to our GTF engine customers.”

Pratt & Whitney Aircraft Company was founded in 1925 by Frederick B. Rentschler, a toolmaker from Hartford, Conn., who revolutionized the aircraft industry in the same year with a lighter, air-cooled engine superior to the liquid-cooled engines of the day. The company began operations in Ga. in 1996, becoming the first facility in the world to begin maintaining PW1000G engines.

Located 90 miles south of Atlanta, the Columbus Engine Center has performed more than 1500 engine overhauls, maintaining several important engines in the Pratt & Whitney family: the V2500®-A5, PW2000, F117, and F100 engines. This expansion will extend those capabilities to include maintenance on PW1100G-JM and PW1500G engines.

“The Pratt & Whitney Columbus Engine Center has become the company’s engine overhaul center of excellence in North America due to its skilled workforce, proven track record for performance and potential for growth,” noted Sylvestro. “The tremendous support we receive from the community and state have contributed to the success of this business.”

This significant investment will support the current employment of administrative, technical, supervisory, production and maintenance positions at the Columbus facility, currently located at 8801 Macon Road. It will also allow the company to expand these facilities, starting construction on a new test facility adjacent to the existing test cell. The company has been investing in upgrading the facility, including adding GTF engine maintenance, repair, and overhaul (MRO) capabilities. The new GTF facilities will add disassembly, inspection, assembly and test capabilities.

“Pratt & Whitney has been committed to Columbus, Georgia for the past 30 years, having provided thousands of jobs for our residents and tremendous corporate support to our community,” said Mayor Teresa Tomlinson, of the City of Columbus. “We believe with today’s significant investment announcement that they will be providing more opportunities to our city and region for the next 30 years.”

“We appreciate Pratt & Whitney’s continued investment in the state of Georgia,” declared Chris Carr, GDEcD commissioner, “and we look forward to working with our economic development partners in Columbus to support the company in future growth.”

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GA Partnership and New Port in Jasper Co., SC

Late in 2015, the Georgia and South Carolina Ports Authorities signed a joint venture agreement toward development of the new Jasper Ocean Terminal (JOT). Together, the two states created a framework for cultivating a terminal design and planning the supporting infrastructure, as well as anticipating financing options and plans for execution.

In May 2016, Ga. officials approved $7.5 million for the project, matching S.C.’s provisions for the project. The funds will span the next three years of building toward a new port terminal on the S.C. side of the Savannah River. The funding has been approved for the 2017 fiscal year budget, beginning July 1, as a sign of dedication by the state. Georgia Ports Authority (GPA) executive director Curtis Foltz has referred to the move as a “huge step” for the JOT, which should take a decade to build at an estimated total cost of $4.5 billion.

“$15 million is what the Jasper project team has told us they need to get the foundational groundwork done,” Foltz noted in a May board meeting of the GPA. Approving Ga.’s half of the funds, he said, is “the first full voice of confidence” on the project.

The terminal, however, is a joint venture, to be operated by both Ga. and S.C. officials. The terminal will create a gateway for the southeast, aiding continued growth in the region and fostering economic advancement. Situated on 1,500 acres of land, the container port will feature 10 berths, a turning basin, access to road and rail lines, and additional supporting infrastructure. It will be situated 10 miles upriver from the entrance to the Savannah Harbor, and 15 miles downriver of the GPA Garden City Terminal. The JOT is scheduled to open in 2030, increasing the capacity for the southeast corridor by 7 million 20-foot equivalent container units.

“I have no doubt,” Foltz continued, “that down the road there is going to be a need to handle 6.5 million containers a year in Savannah, 6.5 million in Charleston, and at least 6.5 million in Jasper. Commerce is going to dictate that, and the citizens of the U.S. deserve it.”

Not only will this be a boon to the shipping industry in the future, it will buoy the region’s economy today, offering jobs and contracts for construction.

The newly elected GPA board Chairman James Allgood recently said that the new port “has the potential to create thousands of jobs, bring in millions in tax revenue for local governments, and ensure the region’s future capacity for decades to come.”

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World FZO’s 2nd Annual Free Zone of the Future Conference

World Free Zones Organization

May 2016 marked the World Free Zones Organization’s second annual World FZO conference and exhibition, held this year in Dubai, UAE. The three-day international conference and exhibition, entitled “Global Value Chain: Opportunities for the Free Zone of the Future,” hosted nearly 700 attendees from over 76 countries. Speakers included the UAE Minister of Economy, the Chairperson of the World FZO, the Global Product Leader from the World Bank, as well as other important economic leaders from the US, UAE, and Netherlands.

As one of only two organizations from North America on the World FZO Board of Directors, Georgia Foreign-Trade Zone participated in the conference, representing the highly successful Foreign-Trade Zone program in the United States.

This year, the conference was motivated toward discussion of global value chains (GVCs). When activities are organized across a number of countries, GVCs represent all the entities involved in making that happen. From the production of a product or initiation of a service to the distribution of that product or service across the globe, GVCs incorporate all the stationary and moving parts at each end and in between.

To this effect, the panels and workshops offered at the international conference discussed the role, difficulties, and necessities of GVCs in the present day and in the future. For example, one panel delved into the evolution of GVCs in an increasingly independent world, while another, moderated by Georgia Foreign-Trade Zone President & CEO Julie Brown, focused on the role and viewpoint of multinational corporations (MNCs). One strategic workshop looked at the “Smart” World Free Zones Readiness Roadmap and debated on how to best aid current and future free zones to innovate technologically, pull in investment and engage stakeholders, all while establishing and maintaining best standards. More than 40 speakers presented at panels related to these issues, with at least 49 different news and media channels covering the event.

The World Free Zones Organization is a not-for-profit body that represents the interests of the global free zone community. It offers management support, training and development programs, and research and analysis on free zones. The World FZO is the first global organization of its kind created to raise awareness of the benefits that Free Zones provide around the world including foreign direct investment, innovation, job creation, and economic stability.

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Panama Canal Expansion a Boon for Georgia Shipping

Panama Canal

By late June 2016, the $5.25 billion expansion of the Panama Canal should be complete. Although two years behind schedule, the expansion is good news for Georgia’s economy, according to logistics and shipping expert Curtis Spencer.

“I see this as a gamechanger pretty soon,” noted Spencer, the president of IMS Worldwide, in a speech at the annual Georgia Logistics Summit.

The expansion comes at a good time for Georgia and the port of Savannah, the nation’s fourth busiest container port. The state and Georgia Ports Authority are currently deepening the Savannah River – a $706 million project to allow larger ships to travel from the Atlantic Ocean 40 miles upriver to the port of Savannah. This project, deepening the river from 42 to 47 feet, should be completed in 2020. Good timing, as mega-ships won’t hit the East Coast immediately.

According to Curtis Foltz, shipping experts anticipate the number of big ships moving through the canal to increase gradually. Foltz, executive director of the GPA, said, “We anticipate growing capacity and project FY2017 container growth to be in the four to five percent range.”

The Panama Canal Authority has the ceremonial opening of the new locks set for June 26. The quicker all-water access this creates between the Atlantic and Pacific Oceans does not guarantee an increase in business for the port of Savannah. It does, however, ensure that larger ships – with more cargo – will be able to travel more easily from China and other Asian manufacturing hubs to East Coast ports. Where current ships typically carry about 5,000 filled containers, the canal expansion will allow for ships that can carry up to 14,000 containers.

The largest benefit for Georgia comes in the form of significantly reduced shipping costs. Currently, explained Spencer, the logistician, a container traveling from China to the East Coast costs $2000 more than having it land on the West Coast and shipped via train to a major eastern city like Atlanta.

Shipping costs are dropping, though. Spencer said, “The dollars are significant.”

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Savannah Sees Record Growth in Containerized Trade

Garden City Terminal

In February, 307,035 twenty-foot equivalent container units (TEUs) were moved through Garden City Terminal at the Port of Savannah, according to Georgia Ports Authority (GPA) Executive Director Curtis Foltz. Compared to the same month in 2015, this figure notes an eight percent volume growth in containerized trade. The Executive Director said in a March 21 press release that this record amount of growth exceeded expectations “in light of last year’s unprecedented cargo diversions from the West Coast.”

Foltz went on to note several reasons for this growth, including “efficient access to market, proximity to major Southeast populations and GPA’s ability to quickly expand on-terminal container capacity.”

The numbers alone are remarkable. This 8.1 percent increase at Garden City Terminal means 22,998 additional TEUs compared to February of last year. Compared to 2014, the growth in containerized cargo is 23 percent. Total freight numbers saw improvement by 3.9 percent, or 100,495 tons more freight than in the same month the previous year. This brings total freight to 2.67 million tons across all cargo sectors in the terminal, the seventh highest monthly performance ever recorded. Containerized trade, in particular, accounted for 2.18 million tons of that total, up by 8.7 percent.

The Port of Savannah now ranks third as the busiest port for exporting containerized goods in the nation, behind Houston and Los Angeles. “One out of every 10 tons of containerized U.S. exports went through Georgia’s ports,” GPA Board Chairman James Walter said of 2015.

This increase does more than bring in additional money to the port. Beyond being international cargo hubs, Walter notes that the deepwater ports in Savannah and Brunswick are also “excellent job generators for manufacturers throughout Georgia and the Southeast.” He added, “Our ports support more than 369,000 jobs in Georgia, and more throughout this great country.” Georgia’s deepwater ports and inland barge terminals contribute significantly to Georgia’s economy. They add $20.4 billion in income, $84.1 billion in revenue, and $2.3 billion in state and local taxes.

GPA reports that the Port of Savannah has moved 2.41 million TEUs in the fiscal year to date through February. This means a 3.6 percent increase compared to FY2015, up by 84,629 TEUs. It is a 17.7 percent increase compared to the same period of time in FY2014. Of the entire U.S. containerized cargo volume, the Port of Savannah handled eight percent in CY2014, as well as 11 percent of U.S. containerized exports.

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Deputy Commissioner at the GDEcD Explains Why Georgia is So Attractive to International Companies

In early February, the Deputy Commissioner of Global Commerce for the Georgia Department of Economic Development (GDEcD), Tom Croteau, discussed what factors make Georgia so attractive to international companies. Not only are companies eager to do business in the United States, but they also want to be a part of the “vibrant marketplace” we host. The U.S. Southeast is known as a great, low-cost place to do business, Croteau explains. Georgia takes that several steps further.

Croteau describes Georgia as business-friendly – a right-to-work state with low unionization and good logistics. Not “just a great place to business,” Georgia has an accepting culture with a large international community and an ample number of consulates. Other states, he notes, do not have the same international structures that have been fostered in Georgia for decades. The state itself has 11 offices in ten countries around the world.

Georgia also boasts excellent travel and transportation opportunities. The Hartsfield-Jackson Atlanta International Airport – the world’s largest passenger airport – is only the beginning. “When you look at the main corridors going into the Midwest and the Northeast,” says Croteau, Georgia is one of only two states with access to both, interstates I-85 and I-75 respectively. He explains that Georgia is “really the main [state] where you can get to all of the Southeast and beyond.” Furthermore, Georgia has the second largest container port on the East coast.

The culture, structure, and practices of Georgia are business-friendly. Logistics make trade and travel in the state both convenient and efficient. A great team of international offices helps, Croteau says, to establish relationships with other countries and really sell Georgia as a prime marketplace. For these reasons, and likely many others, Georgia. has become an international business hub that will only continue to attract more international business.