Shifting Tides

Shifting Tides

It’s fair to say at this point that South Carolina’s objections to the Georgia Ports Authority’s plan to deepen the Savannah River to 48 feet have become a full-blown political controversy. How that will affect the Southeast’s readiness for larger ships set to be unleashed on the East Coast by the 2014 expansion of the Panama Canal is a core question facing the region’s future as a trade gateway.

This month, a resolution “to oppose any plan to expand the Savannah River that does not provide mutual economic benefits to the people of South Carolina” passed 46-0 in the South Carolina state Senate and 112-0 in the state House.

In response to an Army Corps of Engineers draft environmental impact statement released late last year supporting the 48-foot project, South Carolina’s Department of Natural Resources said environmental risks could only allow it to support a maximum deepening of 45 feet. According to the agency, “The majority of the benefits associated with the project occur in the state of Georgia, while the majority of environmental impacts occur in South Carolina or in the Savannah River, which is a shared tributary.”

On Feb. 18, Bill Stern, chairman of the South Carolina State Ports Authority, suspended the proposed Georgia-South Carolina Jasper County container terminal project, saying the planned use of the terminal site to deposit Savannah River dredged material would render it useless as a container terminal. “The current plan doesn’t benefit South Carolina one bit. It actually hurts South Carolina,” said South Carolina State Sen. Larry Grooms, chairman of the Senate Transportation Committee.

With tensions escalating, GPA board member Steve Green cited in a recent Atlanta Journal-Constitution article “elements in South Carolina apparently willing to push the Jasper port off indefinitely in an effort to delay or defeat (Savannah’s deepening).”

It appears South Carolina can’t outright block the 48-foot project, called SHEP for Savannah Harbor Expansion Project, but could challenge in court the Army Corps’ final environmental impact statement set for release this spring.

The result is that the status quo in the Southeast, including Savannah’s near-monopoly on capturing growth from Asia via the Panama Canal, could be disrupted. Until now, Charleston’s deeper harbor has been of no advantage in attracting Asia cargo because of the Panama Canal’s traditional limits on ship size; Savannah has no restrictions on the largest ships able to pass through the canal. But with the canal expanding to handle ships more than twice as large as those that pass through today, the situation changes.

Charleston has a three-foot channel depth advantage and so can handle larger ships than Savannah at its current depth. That means the longer it takes Savannah to get to 48 feet, the more it faces a competitive disadvantage to South Carolina’s largest port.

Even so, Charleston’s 45 feet relative to Savannah’s current 42 still means Charleston will have insufficient depth, without tidal restrictions, to handle the 8,000-TEU ships carriers want to bring to the East Coast from Asia via the expanded canal. For that, Charleston needs 48 to 50 feet.

But while Savannah has been working on its 48-foot deepening for more than a decade and could be within months of getting an initial go-ahead, Charleston is at the start of a multiyear approval process, one that faces another hurdle after the Obama administration’s 2012 budget proposal omitted $400,000 for an initial study.

So this is where the Southeast stands three years before the Panama Canal expansion: Savannah’s plan to deepen from 42 to 48 feet is embroiled in controversy. Charleston is years away from deepening to 50 feet, and the joint-state Jasper terminal, already a project envisioned for deeper into the future, has been suspended.

Jacksonville, meanwhile, is years away from deeper channels. To the north, Norfolk, with the only unobstructed 50-foot channel on the East Coast, must see shippers in the Southeast as a new opportunity.

There may be another way forward. Competition, not cooperation, has long defined the relationship between the Savannah and Charleston ports, but maybe it’s time that changes. A pact may not necessarily address all of the environmental concerns raised about the Savannah deepening — ranging from impact on wildlife, drinking water and other issues — but it could improve what has become a toxic political environment surrounding the Savannah River deepening.

Perhaps sensing they need to clear the air, Georgia officials have suggested a way forward — mutual support for each port’s channel depth aspirations as well as for the proposed Jasper terminal. As GPA Executive Director Curtis Foltz told the Associated Press last week, “This region demands three successful long-term ports. When you look out at the next 20, 30, 40 years, we’re going to need all the capacity a built-out Charleston, a built-out Savannah and a built-out Jasper can offer.”

It’s time for Charleston and Savannah to dig deeper for a solution.

Peter Tirschwell is senior vice president for strategy at UBM Global Trade. Contact him at ptirschwell@joc.com, and follow him at twitter.com/PeterTirschwell.