Above-average activity across the nation’s ports is expected to remain at or near current levels for the foreseeable future. Despite investments in both management styles and drayage service near ports, the best way to manage imports is to look at the realities between the nation’s major ports. For instance, understanding the difference between the Port of Savannah drayage service and that of South California comes down to understanding what sets the GPA apart and how it will help shippers move freight more efficiently. Meanwhile, another factor to consider is that the backlog is not only a result of the pandemic. And it’s important to understand how and why port differences must be under the radar of every shipper and when one port is better-suited than another.
What’s Happening With the South California Port Backlog
Record-setting container backlogs will not vanish overnight, and above-average activity is the new normal. As the Port of Long Beach Executive Director Mario Cordero explained in a recent interview with news station KTLA, the new normal results from global supply chain constraints and the ongoing push toward more e-commerce. Cordero noted how in 2010, experts predicted that ports at the San Pedro Bay complex (LA and Long Beach) would reach a threshold at which the bottleneck would become self-sustaining. The current situation has created a backup that traditional means cannot solve. Further, the recovery after COVID will also result in even greater pressures as the industry ramps up in anticipation of the next year. But why?
With the massive expansion of demand from COVID, ports are at their new typical operating thresholds. As a result, ports with pre-existing plans to expand and active investment in expansion, such as current construction underway to improve efficiency in the Savannah port schedule, are better suited to handle the surges of today. And still, the activity is growing.
According to Greg Miller via an American Shipper report, the total number of ships waiting offshore of South California has reached 96, with an additional 31 at terminal berths. That’s up 25% from early November 2021, and such activity indicates those with more time-sensitive supply chain needs must now look beyond their usual import practices for the region. Of those practices, choosing a different port of entry, such as the Port of Savannah, the third-largest in the country, might be ideal. But to properly gauge such a change in where your freight enters the country, it’s important to understand why and how the Port of Savannah compares to those of South California and why it will be critical to efficiency throughout this new normal of port activity.
Port of Savannah Is More Globally Connected
While the South Pedro Bay complex is the largest area of import activity in the U.S., it’s not necessarily the most globally connected. That title belongs to the Port of Savannah for its ease in getting freight from the Pacific through the Panama Canal and efficiently managing freight from Europe or through the Suez Canal into the U.S. This unique position has given rise to significant investments at the Port of Savannah well before the pandemic hit, continuing to grow as activity levels rise. Port of Savannah container companies have a near-future-ready strategy for moving freight more effectively. Due to its location, more resources are available to sort through containers and get ships off the dock.
For example, the Port of Savannah drayage service depends on quickly entering and exiting the container yard. But heightened activity levels make that difficult at best. Retailers and the Georgia Port Authority (GPA) have created pop-up container yards to effectively offset freight from the literal dock and avoid congestion while loading/unloading ships.
Moving freight to off-port properties also helps reclaim unused space at the Garden City Terminal and plays into rail use. For instance, American Shipper noted, “the port authority is talking with freight railroad CSX about an auxiliary storage site in Rocky Mount, North Carolina.” While helpful, it still requires more transit. Shippers or BCOs could lessen the burden if they could get their freight to a temporary storage site faster and return empty containers simultaneously. Still, such investments and partnerships between the GPA and other container companies in Savannah are critical to leveraging all available space. And in that view, some shippers may need to consider moving freight into the country through other nearby ports.
For instance, it may be prudent to bring freight through the Port of Charleston. That will effectively reduce strain on the Port of Savannah, but it will also require more drayage service to get shipments from that location to their inland destinations. Depending on carriers’ sailing schedules and needs, such activity may also require transit to warehouses closer to the Port of Savannah.
In recent weeks, CMA CGM announced an effective shut-out of all dockings at the Port of Savannah, and for shippers, not being able to leverage that port means coming up with a plan B. That’s where PortCity can help as well.
CMA CGM has changed its Liberty Bridge service freight from the EU to the U.S. and is sending containers to the Port of Charleston in South Carolina instead of the Port of Savannah. Of course, knowing the full impact of those changes is critical to reducing your total transportation spend, planning for the temporary storage of goods, and more. In some cases, simply being able to commit to unloading your containers faster with local warehousing near the Port of Savannah can be a dramatic help in determining which carriers to work with in the first place.
Alternatively, having a drayage expert on your side will help you determine whether to move containers by truck or rail from other nearby ports to temporary holding at PortCity’ Savannah warehouse. Regardless, the storyline is the same; temporary holding, even at the cost of a longer-than-usual dray between these two ports, helps ease backlogs and increase efficiency.
Major Companies Have Started Working Together at the GPA to Increase Efficiency
The need to increase port throughput has led to new partnerships among major terminal operators, reports Hellenic Shipping News. Ports America, Ceres, and SSA Atlantic have forged a new partnership and venture company to manage berths and the Savannah Port schedule to streamline unloading and lower container turn times.
The container turn time for the Port of Savannah drayage service is directly linked to how quickly truckers can complete the move and return to the port, hopefully, with an empty container. This double-sided move of a full versus empty container is known as a dual transaction, and that’s key to maximizing efficiency. Of course, part of that includes managing the flow of containers from ship to rail and to nearby warehouses, which is a specialty that PortCity can bring to the table naturally and easily.
As both the Port of Los Angeles and Long Beach have announced new charges to carriers with idle freight, essentially a new dwell surcharge, GPA has taken a different path. Rather than threatening new costs, the GPA has plans to begin dredging the Savannah river to increase the distance ships can move upstream. As a result, more ships will be able to dock and avoid the bottlenecks of the South Pedro Bay. As explained by Hellenic Shipping News, “The Port of Savannah increased its near-dock rail capacity by 30% with the commissioning two weeks ago of a second set of nine tracks at the Mason Mega Rail Terminal. The port moved 550,000 containers by rail last year and now has more than 2 million TEUs of capacity with an eye toward future growth.”
The GPA is also operating an inland dry bulk facility and working on constructing a second inland rail port to help reduce demand. Those new ventures are expected to open in 2024, and they mirror some of what the South California ports have pursued with Utah rail ramps. Still, the GPA appears further ahead and is creating new pop-up container yards as needed and continuously looking for new options to reduce strain on the region. That’s a marked advantage in an industry marred by uncertainty and capacity constraints.
In fact, the GPA is on track to convert five existing facilities into pop-up container yards. According to Supply Chain Dive, these conversions are reappropriating funds authorized by the Biden Administration to curb supply chain hiccups. The GPA “will spend $8 million on converting the facilities, an investment which was made possible after the Department of Transportation allowed port authorities to “redirect project cost savings toward tackling supply chain challenges.”
Pop-container yards are a unique strategy in that they arise in all tactics port authorities are leveraging to overcome this disruption. Yet, the Port of Long Beach and Port of Los Angeles has only recently started leveraging more container yards, noting a lack of physical space is their primary barrier to use. But, there’s only so long that leased space can be used. Unlike the GPA, South Pedro Bay real estate is much more expensive than Savannah.
What’s Next and How Will Savannah Activity Evolve in the Coming Months?
Finding ocean capacity is hard enough. Blanked sailings are sitting near 9%, reports the Drewry Cancelled Sailings Tracker, and demands will only grow higher as peak season passes and Chinese Golden Week arrives. The onus of shipping is growing more complex, and different port authorities are trying to find solutions to the massive growth seen in the last 15 months. Regardless, the ability to find and source instant drayage service makes a difference in the ocean freight battle for faster turn times. But better drayage combined with localized storage can win the ocean freight import war.
Even more importantly, the Port of Savannah has yet to release official operating volumes for November 2021. All experts and industry insiders expect a record-setting growth rate. Initial predictions call for surpassing 4.4 million TEUs by the end of the year. Still, the growth has pushed the warehousing vacancy rate further down, closer to the rate at South Pedro Bay. However, the recent reports surrounding the lessening of the South Pedro Bay bottleneck can be misleading. For instance, the LA Times reported a reduction in the logjam of approximately 34 ships, as shown on Transport Topics on December 3. But that doesn’t consider the many ships awaiting further offshore, which recall, have hit 96 as of December 5, 2021.
Keep a Strategic View of All Port Activity to Plan Savannah Drayage Service by Working With PortCity
Despite the changing tides of ocean freight management hope is on the horizon while such activity sounds nightmarish. The Port of Savannah is operating at levels not expected until 2025. Here’s the kicker. Vessels awaiting off the Port of Savannah are fewer and far between compared to those in the San Pedro Bay. Yet, activity at the Port of Savannah is increasing, so an expert in drayage service for Savannah and the East Coast in general (Miami, Charleston, and even New York) will be critical to your success.
Shippers need to start moving freight more efficiently and staying strategic with every decision. It’s not enough to hope for a decent timeframe for unloading and drayage service in the Southern California region. Instead, shippers need to think outside the box and consider going through Savannah and its neighboring ports where possible.
Of course, doing that means having boots on the ground in the area that can help get freight to a sorting and storage facility faster and easier too. Also, shippers need to find the balance between short and medium hauls between these ports and know when to divert imports to other ports that are less active and strained. Ultimately, the Port of Savannah is more efficient and future-ready than its west coast counterparts. Find out how your team can be more strategic in managing Port of Savannah drayage service and across the entire U.S. by connecting with PortCity today.