ATLANTA—KC Conway believes there is a transformation under way of North America's industrial supply chain. Global changes in trade patterns are driving business to East Coast ports, and it has little to do with the Panama Canal expansion.
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Conway is the locally based senior vice president, credit risk manager and chief valuation officer with SunTrust Bank. His observations came during a session at RealShare Industrial 2015,held here on Wednesday. He said that while the West Coast ports will still be huge, there is definite eastward momentum.
"The Port of Savannah set a record for container growth, with 17% last year, and is on track for another banner year," Conway said. "Just eight years ago, 61% of containers came through the West Coast ports. That figure is now down to 55%. It's a result of the remaking of the supply chain, and the expanded Panama Canal isn't even open yet."
Conway noted that inland ports, such as the one in Greer, SC, are fueling auto-manufacturing growth. There are also other projects, and proposed developments, that will promote logistics in the South. A proposed highway project in Georgia, which would link LaGrange to Macon and provide the Kia plant in West Georgia with better access to the Port of Savannah, could further improve automobile logistics in the region. There is a huge need to bypass the oppressive traffic around Atlanta, Conway said.
"If we don't fix the congestion problems we have around Atlanta today, Charlotte could creep up as an alternative," Conway stated, noting that Charlotte airport now has an adjacent Norfolk Southern intermodal facility.
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The Port of Jacksonville is also poised for future growth due to its infrastructure for natural gas to fuel container ships.
Conway cited CenterPoint intermodal projects in Joliet, IL and Winter Haven, FL as examples of the future direction of facilities. He said CenterPoint was able to get a zoning change for the Winter Haven project that allowed yard hostlers [small tractors used to move containers] in the buildings.
"This is the only example I know of in the US, and it's a game changer," Conway said. "It's a cost saver and it likely will be replicated in non-union states. This is a secret sauce they've figured out and this region could be come the Inland Empire of Florida."
In a session on Ports Activity, Logistics and Industrial Real Estate, John Petrino, director of business development for the Georgia Ports Authority, discussed the long-range port development plan, which includes spending $1.4 billion through 2026, to keep port facilities up to date. That's on top of $800 million spent over the past decade.
"You can't live in a vacuum," Petrino said. "You've got to talk to customers and have the financial resources to make these things happen."
Brandi Hanback, executive vice president of industrial development and head of Free Trade Zones, trade and logistics for the Rockefeller Group, said her organization, along with partner Alfieri LLC, will deliver a 930,000-square-foot logistics facility in February in Cranbury, NJ that will have a user mix of e-commerce, food and 3PL companies.
"We are also investing in the Lehigh Valley," Hanback said. "It's the emerging Inland Empire of the Northeast. As space runs out, the Lehigh Valley offers a lot of attributes."
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