The Expansion of the Port of Savannah and its Effect on the Cargo Industry

cargo container ship approaching Port of Savannah, Georgia

In recent American shipping industry news, St. Louis has been chosen for a new rail connection with the Port of Savannah, a major U.S. seaport. The Port of Savannah is investing $3 billion into a joint partnership with the St. Louis Regional Freightway to improve the movement of goods to the Midwest.

With the expansion of the Savannah harbor, containerized cargo capacity is predicted to increase from 5 million to 8 million TEUs (20-foot equivalent units) by 2028, while the cost of intermodal freight transportation will drastically decrease, reducing the cost of container shipments by $300 to $400 when shipped from Savannah instead of the West Coast.

This progress is also due to the construction of a new rail terminal in Savannah’s shipping harbor, the Mason Mega Rail Terminal, which is projected to double terminal rail life capacity to 1 million containers per year. The Georgia Port Authority is contributing $92 million to help fund the new rail terminal.

With new infrastructure in place, the harbor will allow retailers and manufacturers to easily distribute goods between the Midwest and the country’s perimeter, all while cutting costs.

Prime Real Estate for the Shipping Industry

Matt Freix, Regional Vice President for DNJ International Services, claims St. Louis has everything shipping and freight forwarding companies need for easy, cost-effective transportation. The city is positioned in the middle of the country near four interstate highways and remains the country’s third largest rail hub. By partnering with the Port of Savannah, St. Louis can also support a larger volume of containers and goods.

The Effect on the Cargo Industry

The Port of Savannah’s expansion plan and partnership with St. Louis will support both existing and new business in the St. Louis region, and the development of new infrastructure will enable rail providers to offer faster rail services to the Midwest, a hub for intermodal freight transportation. More freight forwarders and shippers may decide to transport goods through the East Coast port instead of Western ones to cut costs and improve their business’ bottom line.

Improved freight and shipping capabilities create the potential for stronger relationships between national and global supply chains. The Port of Savannah is increasing its imports and exports and will continue to do so with the new developments set in place by the Georgia Port Authority and St. Louis Regional Freightway.

The Impact of Automated Trucking on the Workforce

Interior of a self-driving truck on the highway

As automated self-driving vehicle technologies continue to evolve, many wonder what the future of trucking looks like for the 1.9 million heavy and tractor-trailer truck drivers employed in the United States—the Government Accountability Office (GAO) has an answer.

According to a recent report issued by the GAO, two factors will determine the role of truck drivers and operators in a post-automation world: the level at which technology progresses and government regulatory decisions. These elements are expected to develop slowly over the next 5 to 10 years, leaving time for both the Department of Transportation (DOT) and the Department of Labor (DOL) to continue working together alongside key stakeholders to prepare for changes within the trucking industry.

The Role of Truck Drivers and Operators in an Automated World

Cindy Brown Barnes, a director in the GAO’s Education Workforce and Income Security team, predicts that technological and federal advancements within the trucking industry will lead to one of two possible scenarios for truck driver jobs in the U.S.

Fewer Long-Haul Drivers

In this scenario, local drivers transport goods from factories to designated drop-off areas, where an automated truck picks up the loaded trailer and drives the rest of the route. The trucking industry is experimenting with technology that makes long-haul automated driving possible: GPS, cameras, accelerometers and gyroscopes, radar, light detection and ranging (LiDAR) sensors, and platooning.

As tech companies push for more advanced automated trucking technologies (in spite of a growing distrust for self-driving cars among the American public), long-haul truckers may become a rarity.

More Skilled Truck Drivers

In the second scenario, truckers are still needed to perform tasks technology can’t: navigating urban environments, fueling the truck, changing tires, or loading and unloading the truck. Partial automation technology will be used as a tool for truck drivers rather than a replacement—trucking will be less stressful and physically demanding, decreasing turnover rates and encouraging more young workers and women to enter the workforce. Partial automated technologies could also produce more specialized driving roles that require technical know-how and engineering skills, creating more opportunity for drivers to continue their educations.

As outlined in the GAO report, workers both inside and outside the trucking industry aren’t currently feeling the impact of automation. It’s the responsibility of the DOT and DOL, the report argues, to use the next decade to prepare for potential mass layoffs and develop educational programs for training a new workforce of specialized truck drivers.

According to the government watchdog, full automation isn’t an immediate concern, but preparing for a future in which driverless trucks are the norm requires anticipating big economic changes now.

The Growth of the Rail Freight Industry

rail freight train with blurred motion

Like many industries, the rail freight market has fluctuated throughout history. During the great recession in 2008, rail freight transportation had negative year-over-year growth for the first time. The growing need for crude oil, coal, and natural gas and the booming energy industry have improved rail freight’s profitability since then: In 2017, Class I freight volume in carloads increased by 4.5% year over year, and regional railroad volume grew by 4.9% according to the Railway Tie Association. Learn more about the biggest contributors to today’s rail freight market health and trends that may impact the industry in the future.

Contributors to Rail Freight Market Growth

Coal is the largest contributor to the growth of Class I freight volume, with a 20% growth year over year. Other positive rail segments include nonmetallic minerals (8% increase), metallic ores and minerals (4% increase), and intermodal shipments (2.3% increase). Regional roads also helped fuel growth, with coal, stone, sand, petroleum, and intermodal transportation all increasing. Some segments, like chemicals, forest products, and lumber, are still under-performing and will need to concentrate on growth initiatives to remain competitive and profitable.

Rail freight traffic is strongly linked to overall economic health. According to the Association of American Railroads, Class I railroads carried 37.9% of the total freight moved during 2016 and generated $12.9 billion in revenue. The rail freight industry is also a huge economic driver of high-paying job creation—in 2014, America’s major freight railroads supported 1.5 million jobs and $88 billion in wages (freight employees are among America’s highest compensated workers). The healthy U.S. economy is expected to generate more profits and jobs for the rail freight industry in the years ahead.

The Future of Rail Freight

The future success of the rail freight industry depends on its ability to adopt environmentally sustainable solutions and consolidate the supply chain through technology. Rail freight has been slow to incorporate digital advancements, but the industry is likely to place a greater emphasis on real-time predictive data, automation, cybersecurity, and other technology that will increase profit margins by streamlining operations and offering a better customer experience. The rail freight industry must also generate innovative solutions for minimizing emissions to keep up with regulatory pressures and the trend toward clean operations.

Global Shipping Services’ Solutions

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