YES: The port is vital to the state’s economy, future and competitive edge.
By Chris Cummiskey
Georgia’s status as the logistics hub of the Southeast is undisputed. Our ports and Hartsfield-Jackson International Airport are linchpins of a vast network of interstates, highways, railroads, distribution centers and multimodal facilities critical to moving almost 6 million tons of goods to market through our state each week, and thus critical to the companies who move those products.
But we could be facing a serious setback to the global competitiveness of our logistics infrastructure and to our economic growth. In three years, the Panama Canal expansion will be completed, increasing the maximum draft of vessels traveling to and from the U.S. East Coast by as much as 10 feet. The new locks will send ships to Savannah with three times the capacity of ships now able to transit the canal. If the Savannah harbor is not deepened by the 6 feet necessary to accommodate those ships, they — and the economic benefits they represent — will go elsewhere, leaving Georgia in the backwaters of trade and investment.
The Port of Savannah is a magnet for companies — so much so that it is the fastest-growing major container port in the U.S., the second-largest port on the East Coast and the fourth-largest in the nation. Savannah serves approximately 21,000 companies in 50 states.
At least a quarter of those companies are in Georgia. And that’s not by accident. Our ports are one of our foremost economic development tools when we’re recruiting companies to Georgia, and a persuasive influence on companies who decide to expand here. They are a part of every conversation with prospective investors, and have been a pivotal factor in thousands of company decisions to do business in Georgia.
These firms range from giants such as Kia, Mitsubishi, Dollar Tree and Great Dane to hundreds of small and medium-sized companies that grow their business through international trade. The Port of Savannah is the largest exporter of containerized poultry in the United States, and leads the nation in export commodities such as pecans, peanuts and kaolin clay. Port customers who expanded or located in metro Atlanta alone created at least 3,800 new jobs this past fiscal year.
Just as importantly, deepening the harbor will help existing Georgia manufacturers stay healthy and less inclined to eye offshore relocations. The Savannah port is unusual: It’s the only U.S. port among the top four that exports more than it imports, a testament to its capabilities, accessibility and cost efficiency — all crucial factors to manufacturers’ profitability. A deeper shipping channel will allow larger and fewer ships to move the same amount of goods at lower transportation costs, which translates into lower consumer product costs and enhanced profitability for our companies, and thus wage benefits and job prospects for our residents.
The economic impact of Georgia’s deepwater ports is staggering. They account for 7 percent of the state’s total gross state product (GSP) and $2.6 billion in state and local taxes, and have generated almost 300,000 jobs throughout the state — a full 7 percent of our total employment. The logistics ecosystem of which the ports are a part employs more than a million Georgians.
It’s little wonder that the harbor deepening project has received state and federal bi-partisan support since its original authorization in 1996. Recognizing its importance to growing the state’s economy, Gov. Nathan Deal has committed $32 million in his proposed budget for the project. Leaders in South Carolina and Georgia have united to support it. We urge Georgians to likewise champion this unique economic catalyst for jobs, investment and trade. It’s time to stand together and invest in our future.
Chris Cummiskey is commissioner of the Georgia Department of Economic Development.
NO: The environmental impact is uncertain and it will help increase our trade deficit.
By Charles C. Watson Jr.
The Georgia Legislature will soon consider Gov. Nathan Deal’s request for $32 million of what will ultimately be over $200 million in state funds for deepening the Savannah harbor. It would seem that virtually every politician is behind it.
But speaking as a scientist who evaluated the main computer model used to estimate the environmental impact, and has spent the last 20 years analyzing dozens of major engineering works around the world, I think it’s a bad idea.
The environmental and economic studies of the Savannah Harbor Expansion Project have been under way since the mid 1990s. By 2003, it became apparent to the agencies responsible for reviewing the results that the main computer model developed by the Georgia Ports Authority was woefully inadequate.
This model, which calculates the flow of water in the river, is critical because it is the foundation on which virtually all of the other impact studies depend. For example, a deeper river can cause saltwater to intrude further upstream, killing freshwater wetlands used by migrating birds, harming fish habitats and requiring expensive filtration equipment on water intakes for businesses and communities.
The U.S. Corps of Army Engineers took over the studies in 2004 and, to save time, a computer model developed by the U.S. Environmental Protection Agency was modified for the job. I was contracted to evaluate that model. While it was a big improvement, it wasn’t quite ready.
The model has several shortcuts, large uncertainty in its predictions and wasn’t tested adequately. For example, it cannot handle the twice daily tide cycles in our marshlands, and estimates of the salinity levels at Savannah’s freshwater intakes could be much different than forecast.
As a result, the expense of filtering that water, a cost taxpayers will be stuck with, may prove to be greater than estimated. Or not as high. We just don’t know. Given the time, money and effort spent, this uncertainty is tragic, and could have been avoided. When the Corps begins dredging, it will be doing an experiment on Savannah’s greatest natural resource, an experiment with an uncertain outcome. I hope there are no surprises.
I would accept significant environmental risk if the economics were sound. But the macroeconomics of this project are terrible. A serious concern is that the deepening risks further damaging our already struggling manufacturing sector.
Everyone was rightly excited that Mitsubishi built a new plant in Pooler, near Savannah. A reason companies manufacture locally is that it’s less expensive than importing from places where labor is cheap and other costs (such as environmental compliance) are low.
By making imports cheaper, which is the main effect of the deepening, a future Mitsubishi may decide it is more profitable to stay put and import, rather than build systems here.
Even the Corps’ own economist has admitted the deepening will not directly create jobs, and a failure to execute the project will not cost any jobs — at worst only slowing the port’s rate of growth.
If trade impacts to federal and state budgets are included, the reported $4.53 in return for each dollar spent drops to well below $1 — a bad investment.
Given our trade deficits, it makes no sense to reduce the cost of importing goods, much less subsidizing those costs with borrowed money and unknown environmental impacts that taxpayers will have to pay to fix. Georgia has many needs, such as the trauma care network, where state money could save lives and create jobs.
The deepening is a mixed bag for Savannah, and a terrible deal for Georgia and our nation. The Legislature should not fund it.
Charles C. Watson Jr. is president of Watson Technical Consulting in Savannah.
