Canceled calls signal ‘two really tough months’ for Georgia ports

The Georgia Ports Authority (GPA) is battening down for a May with 37 blanked sailings. In a normal May, there are no canceled calls at Georgia’s ports.

“On the blanked sailings side, we had 20 in April. That was about 12% of all vessel calls. May is a big month. May is looking like 37, which would be 20 to 22% of our vessel calls if that shakes out. And then June comes in around the 15% mark right now, but that could change,” said GPA Executive Director Griff Lynch.

“There are going to be two tough months at the end of our fiscal year,” he said, noting that as far as the start of the new fiscal year in July, “it’s still too early to tell. We can see we have about 10% of the calls voided already for July.”

Lynch said on the bright side, April was not as bad as expected.

“I don’t think I’d normally say this is great news, but considering the climate we’re all in, I would say we have very good news for April. The volume at the Georgia Ports Authority for container lifts was down by 6.7%. That I think was a victory not to be down double digits,” Lynch said.

He said the GPA handled 337,890 twenty-foot equivalent units (TEUs) in April. 

“We thought it would be down probably 15%. We look at that as a small victory and maybe something to build on,” Lynch said.  

The GPA operates the deepwater ports of Savannah and Brunswick as well as inland terminals in Chatsworth, Bainbridge and Columbus. Like seaports throughout the United States, the ports of Savannah and Brunswick are being negatively impacted by the coronavirus pandemic, and Lynch said in mid-April that he did not foresee a volume return anytime soon.

“We’re getting ready for two really tough months, then we’re hopeful we can kind of turn the corner,” he said this week. “We know it’s not going to be an immediate bounceback but we’re hoping to see month-over-month improvements after we end the fiscal year. Maybe that’s more hopeful than factual, but we’ll have to see how it all plays out.” 

Meanwhile, Lynch is focusing on the positives.

“Both imports and exports are down, but I will say that there are some positive trends that we’re seeing,” he said. “E-commerce was strong. Exports of clay, paper and forest products, and refrigerated goods, especially poultry, were strong and on the import side produce was strong for us. We saw some refrigerated container volumes that we haven’t seen in years. That was great to see. Hopefully that will continue.”

For the fiscal year to date through the end of March, refrigerated container imports via the Port of Savannah had grown by 14.2% as compared to the same period in the previous fiscal year. Refrigerated container exports had increased by 9.9% year-over-year.

“I’ll also report, which was really exciting to see, our inland port up at the Appalachian rail terminal in Chatsworth, Georgia, handled 2,400 containers and we had a record week in the month,” Lynch continued. “That’s only been open a couple of years now, but we continue to see growth there. We were 15.8% over March and I want to say 50% above last year, so a couple of small victories.”

He said the Appalachian Regional Port, which opened in August 2018, handles a variety of products, including auto parts, flooring and raw materials.

“It’s a wide variety, it’s not one thing. That’s the nice thing. When we first opened, as a matter of fact, one of the knocks on it was ‘you don’t have an anchor tenant.’ But the nice thing about not having an anchor tenant is that you have a diverse cargo portfolio and that’s what we’ve been building up there. That’s worked out well,” Lynch said. 

“The auto manufacturers are starting to get operational again, plants are firing up in limited capacity. Auto parts and the supply chain on the auto parts side is still something less than desired, but it’s getting better and that’s the good news,” he said. “We’ll have to see how it shakes out, but what we need now is for consumers to buy the cars.”

The GPA moved 42,491 roll-on/roll-off (ro-ro) units in April, according to preliminary data. That’s down 10.2%, or 4,822 units, year-over-year.

“Ro-ro is going to be down,” Lynch said. “When you think about the sectors that got hit among the hardest, definitely autos would be one of those.”

Demand for warehouse capacity, on the other hand, is up.

“We think that e-commerce is driving that. We see the supply chain may evolve and change permanently,” Lynch said. “E-commerce has been growing for years now, but it’s probably going to be more expedited than we even anticipated and we see that in the warehouse demand.”

He said the GPA is doing everything it can to help its customers during the coronavirus crisis.

“Georgia Ports extended our free time for imports by three days, from seven to 10 days of free time. That’s a big step, among the most gracious and accommodating in the industry. And then on the import side we’ve extended the early receiving date to 10 days before vessel calls and that’s very generous as well. We’re happy to do it while we can. We have the space and I know that will be a great benefit to our customers,” he said.

Lynch will not be hosting GPA’s customers for an in-person State of the Port event this year and probably will deliver his annual report virtually.

Georgia Gov. Brian Kemp was on hand for the 2019 event, held Sept. 12 in Savannah, where he heralded the state’s ports as “key drivers of our economy.” Kemp has drawn criticism nationally recently for easing stay-at-home restrictions and allowing restaurants and hair salons to reopen earlier than in other states.

Lynch said this week that for now, GPA employees will continue to work remotely, and an “isolate and operate strategy” remains in place at the ports to lessen the risk of COVID-19 spread among workers.

“We have dramatically changed the way our folks interact. We’ve got more folks working from home than we’ve ever had,” Lynch said. “We have not changed that back to what we consider was normal. Some of the practices we put in place we’ll probably keep the same for a while. We’re not going to change anything overnight. We want to see how everything plays out. It’s operating fine, it’s not impacted service in any way. 

“But I will say that we’re trying to have some type of reentry to the ports for the office personnel who are working from home starting around the May 26 time frame, after the [Memorial Day] holiday, and we’ll see how it goes. We’re going to take our time. We want to do it the right way,” he said.

“Within this time that we’re in, as concerning as it is, we do see some bright spots. The sense is right now, and I hope it’s true, people are trying to get back to normal and you kind of feel this energy starting up again. Even driving to work, you see more people in their cars on the road going to work. I’m hoping we can continue down that track.”