They have been rivals for centuries.
Whether it’s over who has the best manners or whose history is most colorful, the sister cities of Savannah and Charleston have delighted in one-upmanship since 1733, when Gen. James Oglethorpe landed on the bluff of the Savannah River — some 60 years, Charlestonians are quick to point out, after Charles Town was founded.
Despite the friendly squabbling, Charleston and Savannah have much in common — carefully preserved historic districts, a healthy tourist trade and more than a modicum of moss-draped Southern charm.
They also have deepwater seaports — international trade dynamos that fuel the economies of each respective state.
Separated by little more than 100 miles of coastline, the ports of Savannah and Charleston combined moved more than 4.2 million 20-foot-containers in 2011, with the potential to grow exponentially when an expanded Panama Canal opens in late 2014.
But they have their differences.
Can they work them out, make plans for a bi-state port in Jasper County and become one of the most powerful deepwater gateways in the country?
Good news
There was rejoicing on both sides of the river earlier this month when Georgia and South Carolina ports each learned they were on a short list of major port infrastructure projects the Obama Administration has put on the fast track.
For Georgia, the announcement put the power of a presidential promise behind the last critical steps in a 15-year effort to deepen the Savannah River channel.
For South Carolina, the administration’s pledge — coupled with a recent recalculation by the U.S. Army Corps — could shave as many as five years off its timeline to take the Charleston Harbor to a depth of 50 feet.
Jacksonville, too, is in the mix, albeit considerably farther away in terms of deepening.
Although it’s still unclear how much federal money will be available to back those projects going forward, the pledge from the White House — coupled with the potential for a deepwater Jasper port in the future — puts some muscle behind the push to create a regional gateway to commerce.
Down the road
Deepening the Savannah River to accommodate the larger container vessels that are already starting to call on the East Coast has long been on the Georgia Ports Authority’s radar screen.
In April, after more than a decade of study, $41 million and a stack of documents more than 10 feet high, the U.S. Army Corps of Engineers released its final reports and recommendations on the Savannah Harbor Expansion Project, concluding that deepening the Savannah River channel from 42 feet to 47 feet at mean low water “is economically viable, environmentally sustainable and in the best interests of the United States,” according to Col. Jeff M. Hall, commander of the Savannah District.
A final Record of Decision, green-lighting the project, is expected in November.
“Following the Record of Decision, we can confidently expect preparation work, such as some mitigation and land acquisition, to occur in 2013,” Hall said at the time.
Dredging contracts should be awarded by the end of 2013, he added, with the project completed by the fourth quarter of 2016.
For Curtis Foltz, GPA’s executive director, it’s gratifying to see the finish line on his port’s project and know other area ports are also moving ahead.
“The Southeast has the fastest growing demographic in the country,” he said. “I’m pleased to see the president recognize that the regional approach to port development is the best way to elevate economic growth.
“This region deserves to have all the port capacity it needs,” he said, pointing out that the ports of Savannah and Charleston together already move 80 percent of the volume of the massive New York/New Jersey Port Authority.
“With Southeastern ports working together, we’ll have a tremendous gateway that creates jobs and other economic opportunities for the region and well beyond,” he said.
Deep, deeper, deepest
Across the river in Charleston, where the South Carolina Ports Authority is prepping to deepen its harbor, the mantra is “50 feet — at least.”
“There’s no doubt deep water is our major focus,” said SCPA president and CEO Jim Newsome, a Savannah native with more than 30 years experience in the shipping business.
“And we feel 50 feet is required.”
Newsome said he thinks most people will be surprised at the size of container ships that start calling on the East Coast once the Panama Canal expansion project is completed.
“With a number of ports deepening and plans under way to fast-track the raising of the Bayonne Bridge at the Port of New York/New Jersey, there is no doubt the East Coast is going to see much larger ships,” he said. “Shipping lines are adding more and more of these post-Panamax vessels.”
Charleston’s harbor is currently 45 feet deep. Like Savannah, it has tidal windows.
“We can handle (ships with a draft of) 43 feet anytime,” he said. “But we can only handle ships with a 48-foot draft two hours out of every 24.”
Beyond deepening, Charleston is investing $800 million in a new terminal on the old Navy base, situated on the west bank of the Cooper River about five miles north of the city of Charleston proper. The port is also looking to locate a dual service intermodal facility there, a proposition less daunting because of its location.
“Rail is not so easy on the (downtown) peninsula,” he conceded.
Other infrastructure improvements include a recently announced inland port in Greer designed to handle different types of cargo, particularly export.
“In the Southeast, most export cargo is trucked in,” Newsome said, “But we’re starting to see more refrigerated containers coming in by rail.
“We recognize it’s not sufficient to just grow our ports — we have to build out the infrastructure to support them.
“We have a lot of work still to do.”
A monumental shift
That statement may underscore the changes in fortune experienced in the last decade or so by both Charleston and Savannah.
Ten years ago, Charleston was a bustling port, ranked fourth in the country, while Savannah was generally considered a sleepy Southern harbor, barely in the top 10.
Today, unprecedented growth at Georgia Ports Authority terminals has bumped Savannah up to the fourth largest — and generally considered fastest growing — port in the country.
On the flip side, Charleston has slipped to 10th.
There is no shortage of theories on what happened, although most would agree that a lack of room to grow — and Charlestonians’ traditional “not-in-my-backyard” stance — contributed to the downward spiral.
Running out of space at the turn of the century, the port developed an ambitious plan to build a mega-terminal “Global Gateway,” on nearby Daniel Island. Residents objected, but the ports moved forward with the project.
Several years later, the voices of opposition were at a roar, legal threats loomed and the plan was scuttled, leaving the Port of Charleston to start over at the old Navy yard.
All of this controversy caused the port to take its eye off the ball, according to Newsome, who was charged with changing that culture when he took the helm in Charleston three years ago.
“We lost our focus and that cost us our competitive edge,” he said. “You cannot be successful in this business if you’re not competitive.”
Newsome has been working hard to change that, although challenges remain and he is the first to concede there is no magic wand.
“We’ve spent the last few years assessing our strengths while coping with our weaknesses. Now we’re concentrating on those things we do well — offering a good product and operational efficiency, maintaining a robust and accessible harbor and continuing to grow our cargo base,” he said.
Finding a vision
While Charleston was dealing with a myriad of issues, the Port of Savannah was quietly growing, taking advantage of a number of shifts in global shipping.
More cargo was coming in from the Far East, Southeast Asia and India, while congestion at West Coast ports was growing. The old practice of moving cargo by ship to the West Coast, then by rail into the heartland, was getting more costly and less time-efficient, especially with 80 percent of the country’s population east of the Mississippi River.
In 2002, as Charleston dealt with its growth issues, a work stoppage at West Coast ports forced shippers to move cargo to the East Coast, where Savannah was ready and waiting.
When many of those shippers decided to make the shift permanent, Savannah got more than its share of the bounty — due in no small part to a unique vision shared by then GPA executive director Doug Marchand and Dick Knowlton, his counterpart at the Savannah Economic Development Authority.
In addition to updating port infrastructure, Marchand began wooing shippers themselves — the Wal-Marts and the Home Depots — as well as the shipping lines, which was the more traditional way of doing business.
As Marchand was courting shippers, Knowlton was acquiring large tracts of land to offer sites for warehousing and distribution services.
And Crossroads Business Park — the first pre-permitted development of its kind in the country — was born.
For both Marchand and Knowlton, the project was an expensive and daring leap of faith.
But it was the right vision at the right time and, once implemented, it quickly began distancing Georgia’s ports from the competition.
Today, nearly two dozen major retailers — including Pier 1 Imports, Target, IKEA, Home Deport and Dollar Tree — have established regional distribution centers near the ports.
Foltz, who took over from Marchand in 2010 after serving as his second-in-command for five years, says it’s the ports’ holistic approach on a wide variety of platforms that continues to give it an edge.
“It’s clearly no one thing, or it would have been replicated long before now,” he said. “Instead, it’s our ongoing infrastructure plan with strong state support and the integration of road and rail with two Class One railroads and two intermodal facilities on terminal.
“It’s our distribution center network and our proximity to two major interstate highways, giving us easy access to markets across the state and beyond.
“Water access is important, but so is port access and the overall modernization of port facilities. We’ve been able to achieve those things because we have tremendous support.”
Newsome agreed it’s tough to argue with that kind of success.
“They did a very good job in Georgia — you have to give credit where it’s due,” he said. “They were very competitive and they had solid support across the board, from the ports community to state leaders in Atlanta.”
The Jasper quandary
As both ports work to complete their projects and grow market share, the 800-pound gorilla is just across the Savannah River in the form of a prime parcel of land in Jasper County, about 15 miles downstream from Garden City Terminal.
For nearly 25 years Jasper County has dreamed of having a port of its own, one that would pump much needed new blood into one of South Carolina’s most economically anemic counties.
From the beginning, neither the Georgia Ports nor the South Carolina Ports Authority was particularly excited about the project, although each had a vested interest in its outcome.
Georgia, which owned the land, was not about to compromise the health of its growing port by allowing its neighbor to the north to build and control a deepwater terminal on the Savannah River. South Carolina, meanwhile, wasn’t about to let its neighbor to the south develop a port on its home turf.
After years of maneuvering, lawsuits and finger-pointing, the decision was made to formulate a bi-state agreement establishing the Jasper Ocean Terminal Joint Project Office. The JPO was to be comprised of members from each state and charged with developing the blueprint for a deepwater terminal that the two states would operate together.
Today, the Jasper project is floundering. South Carolina has all but pulled out, its Savannah River Maritime Commission — a vocal opponent of Georgia’ harbor deepening — recently filing an injunction to prevent the project from moving forward.
Newsome, too, is concerned that questions are still to be answered before a Jasper Terminal goes forward.
“You are talking about the largest deepwater port in North America at build-out,” he said. “It’s a project that will require, at minimum, a $5 billion capital commitment. Where is that money going to come from?”
It’s a question, from Newsome’s perspective, that can’t even be addressed until the Savannah River Expansion Project is finalized.
“Then we can start looking at what it will take for Jasper and when we think it will be needed,” he said, adding that he’s not ready to sound Jasper’s death knell.
“Even though Georgia and South Carolina ports are rivals, there is still room for collaboration,” Newsome said. “And good ideas will find a way.”
Foltz agrees that building a Jasper Port is a major project, but he has a slightly different take on the timeline issue.
“Jasper is about the next generation,” he said. “We’re going to need it in the future, whether that is 15 or 20 years out. If we don’t get started, we risk that next generation.”
Foltz estimates capacity at Garden City Terminal to be at about 6.5 million 20-foot containers. The port finished the fiscal year last month just shy of 3 million.
Newsome figures Charleston’s capacity at a “conservative 5 million.” The port’s numbers for fiscal 2012 aren’t in yet, but calendar year 2011 totaled nearly 1.4 million.
“Knowing from experience that it can take a decade or more before construction even begins, we on the Georgia side are doing everything we can to move the Jasper Port forward,” Foltz said.
Georgia Ports Authority Board Chairman Bob Jepson agreed.
“I think the single biggest reason our port is doing so well is vision,” he said. “Just as someone here was focusing on needs 15 and 20 years out two decades ago, both states need to be mindful of what our joint needs will look like in the future and how the Jasper Port can help keep our region thriving as it grows faster than the rest of the country.”
That the Southeast will continue to draw cargo is almost a given.
Kurt Nagle, president and CEO of the American Association of Port Authorities, said a recent infrastructure survey suggests most South Atlantic ports are definitely expecting to grow.
“Seaports in the Southeast and their private-sector partners plan to spend more than $4.3 billion on capital improvement projects in and around their facilities over the next five years,” he said.
“That significant investment is clearly indicative of substantial growth plans among Southeastern U.S. ports.”
Can’t we all just get along?
While it’s hoping to be done by 2016, Georgia’s timeline for deepening the Savannah Harbor doesn’t accommodate likely court challenges, coming primarily from South Carolina groups opposed to the project for a variety of reasons.
Roadblocks to the deepening — from the South Carolina state legislature to the Savannah River Maritime Commission to the Southern Environmental Law Center — were springing up even before the Corps released its report.
State senators Hugh Leatherman and Larry Grooms have been vocal opponents.
Leatherman, speaking at a South Carolina summit on transportation in early 2011, reportedly told his audience that South Carolina had hired an environmental consultant “to make sure the Savannah Harbor Expansion Project doesn’t go through.”
Ironically, Leatherman is chairman of the S.C. Senate Interstate Cooperation Committee.
Grooms, who chairs the state Senate Transportation Committee, has consistently argued that deepening the Savannah River is not in South Carolina’s best interests.
Others opposed to the project include South Carolina’s Savannah River Maritime Commission and the Augusta, Ga.-based Southern Environmental Law Center, which has filed a lawsuit on behalf of the Savannah Riverkeeper, the South Carolina Coastal Conservation League and the South Carolina Wildlife Federation.
South Carolina Gov. Nikki Haley has taken more than a little criticism for supporting the project.
Whether the Obama Administration’s vow to fast-track both deepening projects will serve to ease tensions remains a mystery. Neither of the state’s most vocal opponents — Grooms and Dean Moss, chairman of the maritime commission — would return phone calls for this story.
Foltz remains adamant that the issue of deeper ports should not result in a Georgia-South Carolina standoff.
“This has never been about Charleston or Savannah,” he said. “For this region to grow, we both need to be successful. And we need to work together to bring Jasper online down the road.
“The vast majority of our growth has not come at Charleston’s expense as we continue to create opportunities to draw freight from the West Coast.”
Newsome agrees that a rising tide floats all boats, but he has a slightly different take on the competition issue.
“That’s easy for Curtis to say,” he said, laughing. “He’s bigger.”
The ports of Savannah and Charleston have been competitive for hundreds of years, Newsome said, and he doesn’t see that changing any time soon.
“We are fierce competitors — we compete for business every day,” he said.
But he doesn’t begrudge Savannah its success.
“We’re too busy focusing on what we need to do,” he said. “We have a lot of work in front of us but, fortunately, this is a long-cycle business.
“It won’t happen overnight, but we will be back.
“If I didn’t believe that, I wouldn’t be here.”