(The following story by Dan Chapman appeared on The Atlanta Journal-Constitution website on June 30, 2010.)
ATLANTA, Ga. — China’s factories run ‘round-the-clock. Ships laden with containers low-ride the Pacific. Georgia’s ports report record traffic.
Trucks and trains leave the ports filled to the brim. Warehouses and distribution centers add workers. Retailers re-stock inventories — and hope shoppers will reach for their wallets.
It’s looking like Christmas in July; retailers are getting an early start filling warehouses for the holidays. Georgia’s ports, truckers and rail lines hustle to keep them supplied.
“We just had our sixth consecutive month of double-digit growth and we are on pace for the 2010 calendar year to be a record for us,” said Curtis Foltz, executive director of the Georgia Ports Authority. “I don’t want to claim the recession is over throughout the U.S. But it’s pretty remarkable that we’ve fully recovered the loss of volume at our ports.”
Container traffic at Georgia ports is up 25 percent through the first five months of the year, versus the same period last year, with more than 631,000 of the steel boxes passing through Savannah . May was the sixth busiest month ever.
Ports are something of a leading economic indicator, hinting at the nation’s economic health a half-year down the road. This year, after two years of abysmal sales, the import-export bustle hints at a busy holiday retail season.
The strengthening supply chain extends beyond the ports. Just about every link in the chain from Chinese factory to Savannah freight hauler to Atlanta Target store – shows recent, robust activity.
All that’s needed is the American consumer, who’s responsible for 70 percent of U.S. economic activity, to get in line.
“There’s a sort of natural buoyancy, an increasing vibrancy to the business that’s been dormant for two or three years,” said David Magee, a retail analyst with SunTrust Robinson Humphrey in Atlanta. Retailers “will feel a lot better once we start to see unemployment coming down.”
Roughly one in 10 Georgians is jobless and unlikely to spend freely. Economists also wonder whether retailers’ restocking is simply to replenish low inventories, not in anticipation of any holiday splurge.
The housing morass remains, and consumer confidence is down.
But people involved in trade and logistics speak encouragingly about Georgia’s economy for the remainder of 2010.
“Last year at this time we were gasping for air. We’re breaking all records this year,” said Willie Seymore, president of the stevedores union in Savannah where hiring has recently doubled to 1,500 card-carrying members. “It’s going to be an excellent Christmas.”
The ports of Savannah and Brunswick account for roughly 129,000 full- and part-time jobs statewide – longshoremen, truckers, fork lift drivers, dispatchers, train engineers — according to an April study by the University of Georgia’s Selig Center for Economic Growth.
Containers coming into the port of Savannah are filled with everything from DVDs to toys to towels from China. Containers flowing out carry machinery, paper, chickens and kaolin clay, among other things.
Imports and exports of cars, trucks and construction machinery through Brunswick grew 82.4 percent last month, compared to May 2009, according to the Ports Authority.
Comparisons with 2009 – the depths of the recession – may not seem that impressive. But Foltz, the ports director, said volumes for the first five months of 2010 surpassed similar time frames during the boom years of 2006-2008.
He expects traffic for at least the next three months, based on shipping and retailer bookings, to remain as vibrant or better.
“As everyday passes, we become more confident that the strengthening in shipping is going to continue through the end of the year,” Foltz said. “There’s no doubt we’re adding jobs and economic recovery to the state right now.”
Port activity nationwide is picking up steam too, though not as robustly as Georgia’s. Chinese exports zoomed 49 percent in May, versus a year earlier, further evidence that consumer demand in the United States is on the rebound.
“Every vessel coming from Asia to the U.S. is almost at 100 percent capacity,” said Tom Scorsune, a vice president with NYK Logistics which provides transportation, warehouse and customs services at the port in Savannah. “Retailers and steamship lines are already speeding things up because they fear a lack of (shipping) capacity during the peak season.”
Scorsune’s clients, which include Target, Dollar General, Home Depot and other retailers, typically begin laying in their end-of-year holiday wares in August and September. So the early start to the Christmas season bodes well for Georgia’s ports, retailers and shippers.
Norfolk Southern, with 1,778 miles of track and four major train-truck terminals in Georgia, has registered “low double-digit” growth this year in traffic through Savannah, according to Jeffrey Heller, a vice president for international operations.
“All the different markets in the Southeast are growing again,” said Heller. “Everybody is pretty optimistic that it’s going to continue in the relative short term.”
Norfolk Southern is hiring. So too is Averitt Express, which runs large depots in Savannah, Atlanta and Lawrenceville.
“At the end of March, all of a sudden, business came back quickly and it’s been sustained through today,” said Tim Reeves, a regional director in Atlanta for the 450-employee trucking company. “Mid-July should tell us a lot. We’ll see by then if this surge is real, sustainable or if we’ll start seeing our business starting to wane.”
Shoppers will largely determine whether the nascent economic recovery gains traction. The National Retail Federation predicts consumer spending will rise 3 percent this year, after a 2.5 percent drop in 2009.
Yet retail sales dipped 1.2 percent in May, and shippers, truckers and port officials wonder whether the recent surge will fade once shelves are restocked.
“Consumers, being the fickle people that we are, get tired of the gloom and doom and are now saying, ‘OK, I’ll go out and buy a new watch,’” said Randy Stuart, an assistant professor of marketing at Kennesaw State University. “It will be a better Christmas than last year, especially if traffic is up at the ports.”