It’s out in the open now. South Carolina is now officially opposed to deepening the Savannah River. I see this as a big deal with huge long-term implications for where cargo moves in the U.S. southeast.
Simply put: If Savannah can’t dredge its channel to 48 feet, it will be increasingly non-competitive for the big ships that will increasingly be calling at East Coast ports. Therein lies the opening for Charleston.
Because they are located just over 100 miles from each other and serve the same Southeast market, any gain Charleston achieves will likely be Savannah’s loss. The opposite has been true for the past decade.
As Savannah’s container cargo has grown at an average annual rate of 11.3 percent since 2001, Charleston’s shrank at an annual rate of 0.6 percent, according to the database of JOC sister company PIERS (the U.S. overall grew 4.9 percent during the same period).
Don’t blame Savannah for this. Their strategy to lure importer distribution centers to their local area and have those “pull” in carriers and their ships has gained worldwide acclaim and spurred many an imitation. But while Charleston was slow to act, it’s back in the competitive arena thanks to a management change and is out to regain lost ground, as quickly as possible. That could mean at Savannah’s expense.
As was made clear at a panel on its dredging plans at the recent South Carolina International Trade Conference, Charleston sees its dredging as the best deal for a cash-strapped nation. It is picking up on the emerging idea that not all dredging projects deserve funding, with those that do “achieving the greatest depth for as little money spent,” said Charleston port CEO James Newsome.
Savannah wasn’t mentioned, but the implication was that Charleston can achieve a 50-foot draft needed for the mega-ships that will begin arriving after the Panama Canal is expanded in 2014 at a substantially lower cost than Savannah’s project, which would only achieve 48 feet. Numbers like $300 million for Charleston versus $600 million for Savannah have been tossed about Charleston’s terminals are much closer to the ocean than Savannah’s, which is where most of the savings would come from.
Questions this raises:
- Given that planning for the Savannah River deepening has been under way for a decade, isn’t a bit late for South Carolina to be opposing it at this late hour?
- Is the South Carolina opposition based purely on environmental grounds or is it part of a state strategy to weaken Savannah in hopes of strengthening Charleston?
- Since the Savannah project has not yet received final approval from the Army Corps of Engineers, should it be fair game for criticism on environmental and economic grounds?