By Brian Dunn
In an effort to learn from other jurisdictions, CargoM, Montreal’s transportation and logistics cluster advocate, is holding a series of workshops that highlight the experiences of various port authorities. The first workshop featured Georgia Port Authority (GPA) that has seen tremendous growth since 2000, spurred in part by a general strike on the U.S. west coast in 2002 that saw GPA volume grow by 21 per cent that year. “We are not an overnight success,” said John Petrino, Director of Business Development, Georgia Port Authority, which represents the Ports of Savannah and Brunswick. “In 2000, we had less than one million TEUs throughput. Now, we are over three million TEUs.”
GPA consists of the Garden City Terminal for containers, and Ocean Terminal for breakbulk, Ro/Ro and project cargo, which support more than 350,000 jobs annually and feature clusters for distribution centres and manufacturing, said Mr. Petrino.
GPA is located upriver from downtown Savannah, close to Interstate Highways 95 and 16, to achieve the 5-55 maxim for truckers (five minutes to reach highway speeds of 55 miles per hour after leaving the port). “We collaborated with the Georgia Department of Transport to build a beltway to connect with I95 and I16 which will be ready in 2015,” said Mr. Petrino. His department works closely with project managers to attract new business around its Garden City Terminal, and welcomed nine new companies last year, including Shaw Industries, Hankook Tires, Nordic Cold Storage and OHL, a third-party logistics supplier.
“There are over 250 port-dependent distribution centres in Georgia. We go overseas to meet with (potential) customers. The important question we are asked is what type of business climate do you have? Site Selection magazine chose Georgia as the number one state with the best business climate last year.”
GPA is building for the future and will max out its current capacity of 6.5 million TEUs by 2022 as it strives to keep capacity 20 per cent ahead of demand through long-term planning, noted Mr. Petrino. It is currently undertaking a harbour expansion project to increase its draft, as it is the shallowest port of any major U.S. port. “The four-year project will cost $650 million with the federal government picking up 60 per cent of the tab and Georgia 40 per cent, another example of cooperation.”
Georgia works very hard to create a business friendly environment, according to Peggy Jolley, Coastal Regional Manager, Community and Economic Development for Georgia Power. “Georgia Power has a large economic development department, because if Georgia doesn’t grow, we don’t grow. We’re trying to diversify our economy beyond textiles and agriculture. We have a resource team, research team and business development team.”
To build momentum following the Atlanta Summer Olympics in 1996, a partnership between the state and private corporations was created called Georgia Allies which funds marketing events and brands Georgia worldwide.
“We leave our name at the door (at marketing events). We’re a Georgia company, not Georgia Power. We help identify the clusters Georgia wants to emphasise,” said Ms. Jolley which includes aerospace, logistics, energy, agribusiness, health sciences and international investments.
With 159 counties, it was difficult to market each one individually, so all sites are listed on the site selectgeorgia.com with all their advantages such as proximity to the Port, airport, available land, labour supply and driving time to nearby cities among other attributes. “This way, we can narrow down potential counties based on a customer’s requirements and generate a county report that can make a decision easier,” explained Ms. Jolley, who added it has been a long haul to reach the success that the Port Authority currently enjoys. Twenty years ago, the port and economic development department never talked to each other, there was no industrial park and the port never focused on containers from Asia.
“Now, the port and economic development work closely together and the industrial park which was developed for manufacturing is primarily used for warehousing and distribution.”
The emphasis on collaboration and partnerships was the common theme throughout the workshop which continued with Alyce Thornhill, Georgia Department of Economic Development, Region 12 Project Manager. Sixteen years ago, Georgia created 13 regional Project Managers to promote the state, and each region receives tax incentives or tax breaks based on its prosperity, with a bonus if a business in a region uses the port. If a company expands it business by 10 per cent or more in a year, its payroll tax credit is doubled.
Another innovation is QuickStart, a partnership between companies and state colleges that helps companies get employees trained as quickly as possible at no cost to employers, said Ms. Thornhill. Two more institutions that help the state attract new business are the Georgia Centre of Innovation and the Georgia Centre of Innovation for Logistics, which support innovation and professionalism in logistics. Ms. Thornhill estimates that ten per cent of corporate revenues relate to logistics-related activities, which translates into over one million logistics jobs in the state, according to Ms. Thornhill.
The workshop also heard why Montreal-based Dorel Industries was attracted to Savannah where it has built a new 472,000 sq.ft. warehouse for its juvenile, home furnishing and bike products. While only eight per cent of its U.S. shipments come in through Savannah, it covers the 38 per cent of its business which is generated in the southeastern U.S. “Georgia Port Authority is an ever-growing port with low real estate costs and low labour costs, and we’re able to pass on savings to our customers,” explained Mike Grier, Corporate Director Global Logistics at Dorel. “That’s why Savannah is so successful. It combines a public and private partnership which is strategically aligned with municipal, state and federal governments. Their long-term planning looks 10-25 years down the road. It’s a generational vision.”
Asked what were the key factors that needed to improve the business climate in Montreal, Mr. Grier listed the elimination of red tape, fewer permits and lower taxes. He said the completion of Highway 30 has been a big improvement for traffic flows. “It’s called Highway 30 because that’s how many years it took to develop,” he joked, although not too inaccurately. “None of us will be in business 30 years from now when Montreal is as good as Savannah, because that’s how long it takes.” When asked after the workshop how far Montreal is behind Savannah in terms of collaboration, technology, logistics and innovation, Port of Montreal President and CEO Sylvie Vachon said she was inspired by Savannah’s success. “With Cargo Montreal, we’ve taken a major step forward. In our heads, we’re connecting the dots. Five years earlier, if we had heard their presentation, we would feel we’re way behind. But today, we believe we can catch up.” Ms. Vachon said all the necessary players are on board, including universities, transportation and logistics companies, but there needs to be more participation from the logistics and government sectors. “But listening to the presentations this morning, I’m very optimistic, because they had the same difficulties that we had, and they now have a model that works and we have the same objectives.”
Madeleine Paquin, President and CEO of Logistec Corporation echoed that sentiment, saying the GPA workshop coupled with the creation of CargoM are “clear indications that we are moving in the right direction.”