Freight Expectations: Growing Port Seeks Logistic Expertise

ISE Magazine March 2019 Volume: 51 Number: 3

By Keith Albertson

Shipping goods across the world’s oceans was among humankind’s early methods of trading across long distances and remains a key cog in the global supply chain, even in an era of high-tech commerce and in-creased air freight.

To meet this need in a growing economy, governments of the United States and state of Georgia are funding a 10-year, $2.5 billion plan to expand the Port of Savannah on the Atlantic coast to serve larger vessels and greater volume of cargo. To help guide that expansion, the Georgia Ports Authority is turning to other groups for their logistics expertise.

The port is the nation’s fastest growing and includes two deep-water terminals: Garden City, 1,200 acres in size and the nation’s fourth busiest, and the Ocean Terminal, with 1.4 million square feet of storage. In 2018, the port handled more than 4 million 20-foot equivalent container units (or TEUs, a common measurement of cargo containers), an increase of 7.5 percent from the previous year, with plans to increase to 8 million TEUs by 2028.

The GPA also operates two of the three deep-water terminals in the Port of Brunswick 80 miles south of Savannah. Its Colonel’s Island Terminal is the nation’s largest autoport, handling 1.25 million tons of roll-on, roll-off cargo in 2018 as well as forestry and agricultural products. Combined, the two Georgia facilities employ some 440,000 people.

The project to deepen the ocean harbor and Savannah River estuary to the Garden City and Ocean terminals is managed by the U.S. Army Corps of Engineers at a cost of nearly $1 billion and is scheduled for completion in 2021. The outer ocean channel depth is now 49 feet, with dredging scheduled to continue this year on the inner harbor to reach 47 feet in depth. The project is expected to save governments and consumers some $282 million in transport costs, according to a corps study.

In addition, the port expansion includes massive infrastructure needs. The GPA plans to add another dozen ship-to-shore cranes for a total of 42, increase the fleet of rubber-tired gantry cranes to more than 200 and expand road and rail capacity to handle the surge of additional freight.

Port partners take on logistics

All of these changes create logistic challenges. The GPA turned for help to two in-state resources: the state’s Center of Innovation for Logistics, an agency under the Department of Economic Development, and the Supply Chain and Logistics Institute at Georgia Tech. In July 2018, the three bodies signed a memorandum of understanding to pro-vide research and data analysis to help the port authority navigate its growth strategies.

Tim Brown, director of the SCL at Georgia Tech, told ISE in a recent interview that the partnership came about as a natural extension from work the institute had undertaken at other ports worldwide, including those at Singapore and Rotterdam in The Netherlands.

“Over the past three years as we were getting to know the ports management team, we opened a supply chain and logistic branch on the (Georgia Tech) Savannah campus and started interacting with the port more,” Brown said. “We had the international emphasis and an international faculty with those interests, and we wanted to start working more here in the state and domestically. So those type of discussions led to ‘hey, we should be working together,’ instead of the GPA trying to re-create the wheel and find people that are analytical. You have all these IEs and ORs and statistics people here – might as well leverage them as we have a particular interest in applying logistics.”

Each of the project’s partners has a distinct role. For Tech’s SCL, it’s data research; for the Center of Innovation, networking with governments and businesses; and for the GPA, the port expansion itself and its big-picture economic goals.

“We are excited to enter into this agreement between our organizations,” GPA Executive Director Griff Lynch said in a news release when the agreement was signed. “The MOU leverages the institute’s predictive analytics and supply chain optimization, the Center of Innovation for Logistics’ network of connections and the GPA’s experience in the field as an industry leader.”

Brown said in January the SCL’s re-search teams were ramping up efforts, with the second phase of the big ship impact project headed by Alan Erera and Martin Savelsbergh, Russ Clark helping the GPA with sensor data and Chip White heading a research team that includes the Center for Next Generation Logistics, Center for Next Generation Port Logistics and National University of Singapore. John Bartholdi III, co-executive director of Tech’s Panama Logistics Innovation & Research Center, is also involved.

“The short-term will be the big ship impact stuff,” Brown said. “The longer-term vision included in the MOU is supportive workflow and economic development.”

The big picture goal is to use the institute’s expertise and research capabilities to help solve the GPA’s numerous logistic challenges as it grows.

For its part, the state’s Center for In-novation and Logistics will serve as a liaison between the memorandum partners and businesses that could benefit from the expanded port’s capabilities.

“As it relates to this project, we want to be supportive of the state’s efforts to improve logistics infrastructure,” director Matt Markham told ISE. “We look for potential opportunities for companies who are shippers through the port and are looking to better their operations. We work to benefit companies that work in the state and talk to see if there are ways we can connect them if it makes sense. … We make sure the information gets to them and serve as a bridge between business and government.”

Bigger ships mean bigger challenges

The first challenge involves how to con-figure the port’s infrastructure to handle the bigger ships that will be able to navigate the deeper harbor. According to Edward Fulford, communications man-ager for the ports authority, in fiscal year 2018 (July 2017 to June 2018), about 12 percent of the ships accessing the Savannah port (212 of 1,840) had a capacity of more than 10,000 TEUs, an average of about four ships of the 35 received per week. That total is expected to rise sharply as the port is deepened.

The Savannah expansion is timed to capitalize on the trend of massive cargo ships. Fulford said the shipping industry is gravitating toward larger vessels that are more cost-effective to operate and can carry more tonnage per voyage. He said the largest ships that now call on Savannah’s Garden City Terminal can carry about 14,000 TEUs, while some routes now include ships with capacities up to 20,000 TEUs.

The increasing volume of big ships is partially fueled by the recent deepening of the Panama Canal from 42 to 47 feet, opening the route for more large freighters from Asia to dock on the U.S. East Coast rather than exclusively at Pacific ports or by traveling West through the Suez Canal and across the Atlantic. Dubbed the New Panamax class of ships, they are able to carry up to 13,000 TEUs, compared to the 5,000 TEU limit for ships previously able to navigate the isthmus. Because these giant vessels carry more cargo, they save on fuel and costs.

As the volume of cargo increases, so does the port’s need to upgrade its infrastructure. Lynch told state legislators in January that includes a plan within a decade to replace the Talmadge Memorial Bridge that spans the river to allow larger freighters to pass underneath. An-other option, he said, would be a traffic tunnel under the river.

Savannah straddles Interstate 95, a major north-south corridor that runs along the U.S. east coast from Florida to New England, and I-16, a four-lane interstate that connects with I-75 in Macon in central Georgia up to Atlanta and beyond. With more containers to handle, the port’s efforts are focused on moving cargo on and off ships and onto rails, trucks and other modes of transportation as quickly and efficiently as possible.

“Bigger ships are coming in, and that means more freight is moving through, which provides challenges upstream in the supply chain,” Markham said. “That impacts everything from warehouse and distribution to truck drivers moving freight and decisions being made on how and when freight moves through ports. There are big business decisions involved.

“One thing we’re interested in learning are ways to optimize the flow of freight, including changes in gate hours, off-site storage, truck turnaround and the impact on warehousing and distribution. We’re also looking at driver shortages, which is an issue all over the nation, and things that can be optimized to make it better for a driver to deliver through the port in Savannah so they can do their turnarounds in a way that maintains their quality of life.”

Georgia’s Department of Transportation has a detailed plan through 2050 to improve freight corridors through the state, which would include a dedicated lane for trucks on I-75 heading into metro Atlanta. Markham said other projects include improvements to the I-95/I-16 interchange near Savannah to expedite freight traffic.

Fulford cited some of the specific challenges involved with inland trans-port of increased freight volume: Motor carriers who are adjusting to new regulations, use of electronic logging devices and growing driver shortages, often due to age; and railroads’ need to create new service lanes for more intermodal freight.

The solution to ease increased truck traffic and move freight faster and more efficiently is to boost rail capacity. The port’s volume of intermodal rail lifts in-creased by 16 percent in 2018. In September 2018, the GPA approved $92 million for an expanded terminal that will double the Savannah port’s rail lift capacity to 1 million per year, making it the largest in North America. The work will include 124,000 feet of new track along with the control devices and power infrastructure needed to operate it.

Another key element of the expansion is the opening of inland terminal hubs for container units to be staged for transport to cities in the southern and Midwestern U.S. The GPA has created two such facilities in south central and northwestern Georgia and plans a third in the northeastern sector, each located along major interstate arteries.

To more easily move a greater volume of goods, Brown said numerous other options are on the table, such as expanding port hours to handle the extra capacity and whether I-16 could be used as a test site for autonomous vehicles.

With all these challenges before them, researchers now are engaged in analyzing data from multiple sources to find solutions to various issues. Fulford said analytics provided by the SCL could be used to help cargo owners and third-party logistics providers streamline their supply chains by factoring in various transportation costs and other market forces to determine the type of transport used and sites for future distribution centers.

“As container volumes increase, dwell time allowances (the time a container waits to be picked up after being offloaded) on terminal must be modified,” Fulford said. “How we modify dwell times and understanding how those changes might impact shippers and supply chain partners is very important.”

Such efforts are right in line with the expertise Georgia Tech’s SCL can pro-vide.

“We really liked hearing about the inland port plans they were having,” Brown said. “We love to do multimodal stuff and look at network planning and inflows and outflows and how to balance them and where to put these type of things. … They want us to play with new ideas, analyze the data and anticipate problems.”

From its previous work, the SCL team has found that issues encountered at ports in Asia and Europe aren’t always the same as those faced in the U.S., such as different labor challenges.

“Different parts of the world have different cost issues, different labor issues, different automation levels,” Brown said. “Singapore and Rotterdam are more automated than ports here, for in-stance.”

Some of the Georgia port’s specific challenges are unique. In Savannah, a city of about 145,000 residents, moving goods from the river terminals to major highways can be dicey through the city’s narrow, tree-lined streets. To ease this problem, a connecting highway was ex-tended 3 miles from the port to I-95 to expedite truck traffic. Sensors also have been placed throughout Savannah to help analysts read traffic patterns to find other solutions, Brown said.

While the port stands to benefit from the expertise of Georgia Tech’s team of data analysts, the school’s faculty and students will be able to gain real-world experience in solving such problems. And those interested aren’t limited to industrial engineers.

“It presents a lot of interesting challenges (for IEs) that are not just within the four walls of a plant,” Brown said. “We’ve done show-and-tells with different faculty on campus and it’s surprising to see different faculty looking at port issues from different perspectives. Some even from the school of history looking at how sea containers have changed global trade. Some are looking at it from a regional development perspective.

“Here in industrial engineering, the faculty, given this relationship and how it ties to other things we’re doing around the world, has started directing more graduate student projects into the port aspects, like looking at for instance shared infrastructure in the automotive industry. There’s been a project on blockchain enablement on container flows.”

Though the project remains in the early stages of data analysis and assessment, the partners will ramp up efforts throughout the year as dredging of the harbor nears completion, set for 2022. Fulford said research on the project was scheduled to continue early in 2019 and the GPA expects to have recommendations to consider by the year’s third or fourth quarter.