The Port of Savannah is the fourth-largest seaport in North America and the second largest on the East Coast. The Port ships to more than 160 countries and has direct shipping access to over 800 ports. In October 2023, Georgia Ports Authority (GPA) leaders presented an update on their $1.9 billion master plan to expand infrastructure. The ongoing Peak Capacity Project is adding 1.2 million TEUs to Garden City Terminal, and the Garden City West Terminal Project will add an additional 90 acres of container storage and 1 million TEUs by 2024. Last month, GPA reopened Berth 1 at Garden City Terminal. The two-year renovation now allows the dock to serve ships in the 16,000+ TEU range. With all berths now online, vessel service has returned to previous velocities, with ship queues cleared.
The Port of Savannah is the second largest on the East Coast and has steadily grown over the past decade.
Additionally, the Mason Mega Rail Terminal was completed in 2022. The $218 million project expanded Savannah’s on-dock intermodal rail yard, and all 18 intermodal tracks are now in use. The terminal will increase the Port of Savannah’s rail lift capacity to one million containers per year and open new markets spanning an arc of cities from Memphis to St. Louis and Chicago to Cincinnati.
In September 2023, GPA announced it has partnered with CSX to provide service to Rocky Mount, North Carolina via the CSX Carolina Connector, creating a faster supply chain and opening opportunities across North Carolina and beyond. More recently, the GPA’s board approved expenditure of $127 million to build the Blue Ridge Connector, an inland rail terminal in Gainesville, Georgia, linking Northeast Georgia with the Port’s 35 global container ship services. Norfolk Southern will connect the facility which will open in 2026 and serve a region important for the production of heavy equipment, food, and forest products. GPA has invested more than $374 million in rail capacity, including the Appalachian Regional Port in Northwest Georgia, and moves approximately 20 percent of its container cargo by rail.
Long- term plans call for a new terminal on Hutchinson Island that will provide another 2.7 million TEUs of capacity, so the economic impact of the GPA will continue to be substantial and far-reaching. By 2030, TEU capacity is expected to be 10 million, and 20 million by 2050.
Capabilities: The Port of Savannah has two terminals: The Ocean Terminal and the Garden City Terminal. The latter is the busiest single terminal and fastest-growing container terminal in the U.S. The Port of Savannah has 36 cranes in service, with 42 cranes expected to be in service by 2028.
Real Estate Impact: The Port of Savannah continues to drive the industrial real estate market in Savannah and throughout much of Georgia. Locally, the vacancy rate and absorption remained strong and steady in the third quarter and we expect Savannah to once again be a top growth market in the U.S. in terms of net absorption as a percent of total inventory for 2023. While leasing activity has been solid all year, we are seeing vacancy tick upward in the fourth quarter as multiple speculative buildings are completed. The lack of new construction starts in 2023 should allow the market to work through the new supply of inventory and cause vacancy rates to stabilize in late-2024.
Hyundai: Hyundai Motor Group (HMG) is well underway on construction of a $6.9 billion electric vehicle (EV) assembly and battery plant on 3,000 acres, located just 30 minutes west of Savannah in Bryan County. The facility will start production in 2024, is expected to employ over 8,100 people, and will be highly automated with the latest robotic technology. Employers in the supply chain for the EV plant are expecting an additional 7,000 workers and $1 billion in facilities.
The Savannah market continues to grow and attract new businesses from many parts of the U.S., particularly New Jersey and California, and from other countries. There has been an incredible amount of vertical and horizontal construction occurring both on and off-port and it is paying off.
“Over 13.8 million square feet of new construction has been leased in 2023, of which 9 million square feet was spec and 4.8 million square feet was built-to-suit,” said David Sink, SIOR, Colliers’ Principal in Savannah, GA. “This amount of absorption, as a percentage of total inventory (118 million square feet as of Q3), will once again make Savannah one of the Top Growth Markets in the U.S. With the 17 million square foot Hyundai EV plant scheduled to come online late 2024, several suppliers have broken ground on new facilities or begun to sign leases within speculative buildings and that is expected to continue well into 2024.”
Read Colliers’ annual U.S. Seaports Outlook Report here. This report reviews the state of the top 11 U.S. seaports, explores the factors driving container volume fundamentals, and provides a forecast for 2024 and beyond.