In theory, Charleston and Savannah could meld into a southeast Atlantic colossus rivaling the ports of Los Angeles and Long Beach. That, at least, is the theory.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
The ports of Charleston, S.C., and Savannah, Ga., are only 107 miles apart. But distance is about the only thing about the two that's close. In most other ways, they might as well be at opposite ends of the planet.
The neighboring states, with their ports as proxies, have battled each other over trade and maritime supremacy for decades. They have taken their fight to the legal system, the free market, and the court of public opinion. In the past, each has refused to attend maritime or trade events in the other's state. The contentiousness is as thick as the air on a humid Charleston summer night. "I've never seen anything like it in my 30 years in the business," said K.C. Conway, chief U.S. economist for Colliers International, a global real estate concern.
The ports seem to struggle even when they try to collaborate. In 2007, after years of the states fighting over control of property along the Savannah River in Jasper County, S.C., a bistate operating team spent $7.5 million, divided between the two, to buy 1,500 acres of land to build a container terminal approximately eight miles from the entrance to the river's shipping channel. The project would effectively create a third regional port and allow dredging to a 50-foot depth, deeper than either Charleston, at 45 feet, or Savannah, at 42 feet.
The deeper water would accommodate the large vessels many expect to be dominating global sea trade, notably through the expanded Panama Canal, over the decades. Today's canal configuration is capped at ships with 5,100 twenty-foot-equivalent (TEU) container units; when the widened and deepened canal opens in 2015, it will accommodate so-called post-Panamax ships with close to 13,000 TEUs. About 83 percent of containerships on order today are 8,000 TEUs or larger, according to U.K. consultancy Drewry.
Progress at Jasper has been agonizingly slow. Beyond the land purchase and several feasibility studies, little has happened. Fed-up county officials have demanded to take control of the project and pay for the terminal to be built. It is believed the work won't be done until 2025 or 2030.
NO ZERO SUM GAME
The irony is that Charleston and Savannah need not play a zero sum game. Each can succeed with its complementary strengths, and greater cooperation could create a monolith that dominates the fast-growing and increasingly export-oriented Southeast region, analysts said. Savannah has a superb logistics infrastructure, is close to the Atlanta and northern Florida markets, and has a strong agricultural commodity base. Charleston has the industry's most efficient loading and unloading operation, with 43 crane moves an hour, according to Colliers (Savannah is close behind at between 40 and 42 moves). Charleston, like Savannah, is tied into a vibrant regional manufacturing market—especially autos. It handles most of the sea commerce moving in and out of the Carolinas, and has a solid presence in Tennessee. Luxury automaker BMW North America, probably Charleston's highest-profile customer, transports 600 to 800 vehicles per day by rail from its factory in Spartanburg, S.C., to the port, some 200 miles away.
Conway of Colliers said that, with greater cooperation, the ports combined could handle 10 million TEUs per year by 2020. That would more than double the approximately 4.5 million combined TEUs handled in 2012. Savannah, at 2.9 million TEUs in 2012, is the nation's fourth-largest port, behind Los Angeles, Long Beach, and the Port of New York & New Jersey. Charleston, at 1.5 million TEUs, is the fifth. Los Angeles and Long Beach, adjacent to each other but also competitors, handled a combined 14 million TEUs last year.
The facilities could "complement each other to such a degree that they become the East Coast equivalent of Los Angeles and Long Beach," Conway said. However, they "keep tripping over each other for the same business," he said.
Ted Prince, who runs a Kansas City, Mo.-based consultancy bearing his name, said the ports' fierce rivalry will benefit liner companies, beneficial cargo owners (BCOs), and the ports themselves. "The competition between them will keep them focused, efficient, and customer-responsive," Prince said. The challenge will come if they abuse their dominant position and price like monopolies, Prince said. If that happens, liners and BCOs could, over time, migrate to smaller ports like Wilmington, N.C., and Jacksonville, Fla., he added.
In an early September interview at his Charleston office, James I. Newsome III, who left the top U.S. post at German liner giant Hapag-Lloyd in 2009 to run the South Carolina State Ports Authority, didn't say outright that the ports enjoy a duopoly in the region. But he could see where some could get that impression. "Both ports have things to offer, and they will be partners in the foreseeable future," he said.
The two ports, by virtue of their superior capabilities relative to other Southeast port locations, have a near lock on the region's commerce, Newsome said. They also have the traffic flows required to justify the billions of dollars in investments needed to stay competitive, he said. "Savannah and Charleston will be the winners," he said.
Curtis Foltz, executive director of the Georgia Ports Authority, said the states have moved away from the political strife that has hindered the Jasper project. Beyond that, however, Foltz sees little need or opportunity for Georgia to cozy up to its northern neighbor. Los Angeles and Long Beach, like Seattle and Tacoma in Washington state, work because they function within the boundaries of their respective states, he said. A model like the Port Authority of New York & New Jersey, which is run by a bistate agency, would be difficult to execute in the Southeast because of Georgia's diverse portfolio of port assets, which includes three ports and inland properties for development, he said.
The region and its shippers, BCOs, and liners are "best served by independent port authorities operating their respective assets as an economic development extension of their state" augmented by joint efforts to get Jasper up and running, Foltz said. He contended that there's little customer overlap between the ports.
HOW DEEP IS YOUR WATER?
One area where both ports are in the somewhat same figurative boat is water depth. Each has faced daunting political, environmental, and bureaucratic obstacles to deepening its channels and berths. Savannah hopes to get to 47 feet by 2016 or 2017. Charleston today can handle vessels with 48-foot drafts but only during periods of high tides that last roughly two hours. Liner companies spending fortunes to buy and maintain big ships don't want to wait for high tide or be forced to enter and exit a port at specific times, Newsome argues.
A 50-foot depth will allow for unrestricted access to Charleston. However, that's unlikely to happen before 2018, and if forecasts by the U.S. Army Corps of Engineers are accurate, closer to 2020. The Corps is halfway through a feasibility study to determine if the harbor should be deepened at all. Currently, New York, Baltimore, and Norfolk have 50-foot depths; a fourth port, Miami, is expected to reach that level by 2015.
South Carolina has taken what Newsome calls the unprecedented step of allocating $300 million in state money to fund the entire cost of the dredging. State taxpayers are already on the hook for $180 million; the balance would be spent only if federal funding to finance the remaining $120 million fails to come through. Newsome said the move underscores the state's commitment to deeper water, but he chafes at the idea of its citizens footing the additional tab for a project that has clearly shown regional and national economic benefits.
How important water depth becomes in a post-Panamax world remains to be seen. The rule of thumb is that each foot of vessel draft allows a ship to carry an additional 100 loaded containers. Newsome has said deep water is a port's new currency and is staking almost all of Charleston's future on it. Prince, by contrast, said water depth is not a major factor in a line's decision to call at a port, and that other elements like infrastructure capabilities and terminal throughput are more significant. J. Christopher Lytle, who was head of the Port of Long Beach before taking the top job at the Port of Oakland (Calif.) in May, said rail connections and an inland port network that radiates cargo hundreds of miles from a port are just as critical as water depth. Charleston's inland port, located in Greer, S.C., 212 miles from the port, opens for business on Oct. 14 on a limited scale. Savannah has an inland port operation at Cordele, Ga., about 190 miles west. Both Savannah and Charleston took their cues from the Virginia Port Authority, which in 1990 developed an inland port in Front Royal, about 220 miles from Norfolk.
Most important, each authority must have the portside network already in place, Lytle said. "They [the ports] have to show a developed infrastructure, not just an action plan," he said. Relationships with the eastern railroads that haul cargo from the water to inland ports for distribution by truck throughout the eastern half of the U.S. will be a key part of any port strategy, Lytle added. Transporting cargo to inland ports is not historically part of a railroad's business plan, he said.
What seems clear at this point is that vessel operators looking to maximize the value of expensive megaships are unlikely to make multiple calls along the East Coast. Some liners may choose just two ports, one in the North (either New York or Norfolk) and one in the south (Charleston, Savannah, or Miami). Foltz believes most liners will choose three ports: New York because of its enormous consumer base, Norfolk because it rules the geographic sweet spot midway between New York and the Southeast ports, and either Charleston or Savannah. Miami is considered the outsider because its location is too far removed from major population centers other than south and central Florida.
Conway of Colliers said a port doesn't have to throw in the towel if it never gets to 50 feet. The deep water only matters if a megaship is fully laden, he said. Besides, as Savannah has shown, the ability to carve out compelling service niches like logistics can overcome any depth deficiencies in a port's channel or berth, Conway said.
Newsome doesn't buy it. If the port's future lies with exports, then a 50-foot ship draft is essential for big vessels to load up with cargo that is heavier than the stuff coming into the U.S., he said. "After 2016, 13,000-TEU ships will become the norm. We have to be ready," he said.
Oh, you work in logistics, too? Then you’ve probably met my friends Truedi, Lumi, and Roger.
No, you haven’t swapped business cards with those guys or eaten appetizers together at a trade-show social hour. But the chances are good that you’ve had conversations with them. That’s because they’re the online chatbots “employed” by three companies operating in the supply chain arena—TrueCommerce,Blue Yonder, and Truckstop. And there’s more where they came from. A number of other logistics-focused companies—like ChargePoint,Packsize,FedEx, and Inspectorio—have also jumped in the game.
While chatbots are actually highly technical applications, most of us know them as the small text boxes that pop up whenever you visit a company’s home page, eagerly asking questions like:
“I’m Truedi, the virtual assistant for TrueCommerce. Can I help you find what you need?”
“Hey! Want to connect with a rep from our team now?”
“Hi there. Can I ask you a quick question?”
Chatbots have proved particularly popular among retailers—an October survey by artificial intelligence (AI) specialist NLX found that a full 92% of U.S. merchants planned to have generative AI (GenAI) chatbots in place for the holiday shopping season. The companies said they planned to use those bots for both consumer-facing applications—like conversation-based product recommendations and customer service automation—and for employee-facing applications like automating business processes in buying and merchandising.
But how smart are these chatbots really? It varies. At the high end of the scale, there’s “Rufus,” Amazon’s GenAI-powered shopping assistant. Amazon says millions of consumers have used Rufus over the past year, asking it questions either by typing or speaking. The tool then searches Amazon’s product listings, customer reviews, and community Q&A forums to come up with answers. The bot can also compare different products, make product recommendations based on the weather where a consumer lives, and provide info on the latest fashion trends, according to the retailer.
Another top-shelf chatbot is “Manhattan Active Maven,” a GenAI-powered tool from supply chain software developer Manhattan Associates that was recently adopted by the Army and Air Force Exchange Service. The Exchange Service, which is the 54th-largest retailer in the U.S., is using Maven to answer inquiries from customers—largely U.S. soldiers, airmen, and their families—including requests for information related to order status, order changes, shipping, and returns.
However, not all chatbots are that sophisticated, and not all are equipped with AI, according to IBM. The earliest generation—known as “FAQ chatbots”—are only clever enough to recognize certain keywords in a list of known questions and then respond with preprogrammed answers. In contrast, modern chatbots increasingly use conversational AI techniques such as natural language processing to “understand” users’ questions, IBM said. It added that the next generation of chatbots with GenAI capabilities will be able to grasp and respond to increasingly complex queries and even adapt to a user’s style of conversation.
Given their wide range of capabilities, it’s not always easy to know just how “smart” the chatbot you’re talking to is. But come to think of it, maybe that’s also true of the live workers we come in contact with each day. Depending on who picks up the phone, you might find yourself speaking with an intern who’s still learning the ropes or a seasoned professional who can handle most any challenge. Either way, the best way to interact with our new chatbot colleagues is probably to take the same approach you would with their human counterparts: Start out simple, and be respectful; you never know what you’ll learn.
With the hourglass dwindling before steep tariffs threatened by the new Trump Administration will impose new taxes on U.S. companies importing goods from abroad, organizations need to deploy strategies to handle those spiraling costs.
American companies with far-flung supply chains have been hanging for weeks in a “wait-and-see” situation to learn if they will have to pay increased fees to U.S. Customs and Border Enforcement agents for every container they import from certain nations. After paying those levies, companies face the stark choice of either cutting their own profit margins or passing the increased cost on to U.S. consumers in the form of higher prices.
The impact could be particularly harsh for American manufacturers, according to Kerrie Jordan, Group Vice President, Product Management at supply chain software vendor Epicor. “If higher tariffs go into effect, imported goods will cost more,” Jordan said in a statement. “Companies must assess the impact of higher prices and create resilient strategies to absorb, offset, or reduce the impact of higher costs. For companies that import foreign goods, they will have to find alternatives or pay the tariffs and somehow offset the cost to the business. This can take the form of building up inventory before tariffs go into effect or finding an equivalent domestic alternative if they don’t want to pay the tariff.”
Tariffs could be particularly painful for U.S. manufacturers that import raw materials—such as steel, aluminum, or rare earth minerals—since the impact would have a domino effect throughout their operations, according to a statement from Matt Lekstutis, Director at consulting firm Efficio. “Based on the industry, there could be a large detrimental impact on a company's operations. If there is an increase in raw materials or a delay in those shipments, as being the first step in materials / supply chain process, there is the possibility of a ripple down effect into the rest of the supply chain operations,” Lekstutis said.
New tariffs could also hurt consumer packaged goods (CPG) retailers, which are already being hit by the mere threat of tariffs in the form of inventory fluctuations seen as companies have rushed many imports into the country before the new administration began, according to a report from Iowa-based third party logistics provider (3PL) JT Logistics. That jump in imported goods has quickly led to escalating demands for expanded warehousing, since CPG companies need a place to store all that material, Jamie Cord, president and CEO of JT Logistics, said in a release
Immediate strategies to cope with that disruption include adopting strategies that prioritize agility, including capacity planning and risk diversification by leveraging multiple fulfillment partners, and strategic inventory positioning across regional warehouses to bypass bottlenecks caused by trade restrictions, JT Logistics said. And long-term resilience recommendations include scenario-based planning, expanded supplier networks, inventory buffering, multimodal transportation solutions, and investment in automation and AI for insights and smarter operations, the firm said.
“Navigating the complexities of tariff-driven disruptions requires forward-thinking strategies,” Cord said. “By leveraging predictive modeling, diversifying warehouse networks, and strategically positioning inventory, JT Logistics is empowering CPG brands to remain adaptive, minimize risks, and remain competitive in the current dynamic market."
With so many variables at play, no company can predict the final impact of the potential Trump tariffs, so American companies should start planning for all potential outcomes at once, according to a statement from Nari Viswanathan, senior director of supply chain strategy at Coupa Software. Faced with layers of disruption—with the possible tariffs coming on top of pre-existing geopolitical conflicts and security risks—logistics hubs and businesses must prepare for any what-if scenario. In fact, the strongest companies will have scenarios planned as far out as the next three to five years, Viswanathan said.
Grocery shoppers at select IGA, Price Less, and Food Giant stores will soon be able to use an upgraded in-store digital commerce experience, since store chain operator Houchens Food Group said it would deploy technology from eGrowcery, provider of a retail food industry white-label digital commerce platform.
Kentucky-based Houchens Food Group, which owns and operates more than 400 grocery, convenience, hardware/DIY, and foodservice locations in 15 states, said the move would empower retailers to rethink how and when to engage their shoppers best.
“At HFG we are focused on technology vendors that allow for highly targeted and personalized customer experiences, data-driven decision making, and e-commerce capabilities that do not interrupt day to day customer service at store level. We are thrilled to partner with eGrowcery to assist us in targeting the right audience with the right message at the right time,” Craig Knies, Chief Marketing Officer of Houchens Food Group, said in a release.
Michigan-based eGrowcery, which operates both in the United States and abroad, says it gives retail groups like Houchens Food Group the ability to provide a white-label e-commerce platform to the retailers it supplies, and integrate the program into the company’s overall technology offering. “Houchens Food Group is a great example of an organization that is working hard to simultaneously enhance its technology offering, engage shoppers through more channels and alleviate some of the administrative burden for its staff,” Patrick Hughes, CEO of eGrowcery, said.
The 40-acre solar facility in Gentry, Arkansas, includes nearly 18,000 solar panels and 10,000-plus bi-facial solar modules to capture sunlight, which is then converted to electricity and transmitted to a nearby electric grid for Carroll County Electric. The facility will produce approximately 9.3M kWh annually and utilize net metering, which helps transfer surplus power onto the power grid.
Construction of the facility began in 2024. The project was managed by NextEra Energy and completed by Verogy. Both Trio (formerly Edison Energy) and Carroll Electric Cooperative Corporation provided ongoing consultation throughout planning and development.
“By commissioning this solar facility, J.B. Hunt is demonstrating our commitment to enhancing the communities we serve and to investing in economically viable practices aimed at creating a more sustainable supply chain,” Greer Woodruff, executive vice president of safety, sustainability and maintenance at J.B. Hunt, said in a release. “The annual amount of clean energy generated by the J.B. Hunt Solar Facility will be equivalent to that used by nearly 1,200 homes. And, by drawing power from the sun and not a carbon-based source, the carbon dioxide kept from entering the atmosphere will be equivalent to eliminating 1,400 passenger vehicles from the road each year.”
As a contract provider of warehousing, logistics, and supply chain solutions, Geodis often has to provide customized services for clients.
That was the case recently when one of its customers asked Geodis to up its inventory monitoring game—specifically, to begin conducting quarterly cycle counts of the goods it stored at a Geodis site. Trouble was, performing more frequent counts would be something of a burden for the facility, which still conducted inventory counts manually—a process that was tedious and, depending on what else the team needed to accomplish, sometimes required overtime.
So Levallois, France-based Geodis launched a search for a technology solution that would both meet the customer’s demand and make its inventory monitoring more efficient overall, hoping to save time, labor, and money in the process.
SCAN AND DELIVER
Geodis found a solution with Gather AI, a Pittsburgh-based firm that automates inventory monitoring by deploying small drones to fly through a warehouse autonomously scanning pallets and cases. The system’s machine learning (ML) algorithm analyzes the resulting inventory pictures to identify barcodes, lot codes, text, and expiration dates; count boxes; and estimate occupancy, gathering information that warehouse operators need and comparing it with what’s in the warehouse management system (WMS).
Among other benefits, this means employees no longer have to spend long hours doing manual inventory counts with order-picker forklifts. On top of that, the warehouse manager is able to view inventory data in real time from a web dashboard and identify and address inventory exceptions.
But perhaps the biggest benefit of all is the speed at which it all happens. Gather AI’s drones perform those scans up to 15 times faster than traditional methods, the company says. To that point, it notes that before the drones were deployed at the Geodis site, four manual counters could complete approximately 800 counts in a day. By contrast, the drones are able to scan 1,200 locations per day.
FLEXIBLE FLYERS
Although Geodis had a number of options when it came to tech vendors, there were a couple of factors that tipped the odds in Gather AI’s favor, the partners said. One was its close cultural fit with Geodis. “Probably most important during that vetting process was understanding the cultural fit between Geodis and that vendor. We truly wanted to form a relationship with the company we selected,” Geodis Senior Director of Innovation Andy Johnston said in a release.
Speaking to this cultural fit, Johnston added, “Gather AI understood our business, our challenges, and the course of business throughout our day. They trained our personnel to get them comfortable with the technology and provided them with a tool that would truly make their job easier. This is pretty advanced technology, but the Gather AI user interface allowed our staff to see inventory variances intuitively, and they picked it up quickly. This shows me that Gather AI understood what we needed.”
Another factor in Gather AI’s favor was the prospect of a quick and easy deployment: Because the drones can conduct their missions without GPS or Wi-Fi, the supplier would be able to get its solution up and running quickly. In the words of Geodis Industrial Engineer Trent McDermott, “The Gather AI implementation process was efficient. There were no IT infrastructure or layout changes needed, and Gather AI was flexible with the installation to not disrupt peak hours for the operations team.”
QUICK RESULTS
Once the drones were in the air, Geodis saw immediate improvements in cycle counting speed, according to Gather AI. But that wasn’t the only benefit: Geodis was also able to more easily find misplaced pallets.
“Previously, we would research the inventory’s systemic license plate number (LPN),” McDermott explained. “We could narrow it down to a portion or a section of the warehouse where we thought that LPN was, but there was still a lot of ambiguity. So we would send an operator out on a mission to go hunt and find that LPN,” a process that could take a day or two to complete. But the days of scouring the facility for lost pallets are over. With Gather AI, the team can simply search in the dashboard to find the last location where the pallet was scanned.
And about that customer who wanted more frequent inventory counts? Geodis reports that it completed its first quarterly count for the client in half the time it had previously taken, with no overtime needed. “It’s a huge win for us to trim that time down,” McDermott said. “Just two weeks into the new quarter, we were able to have 40% of the warehouse completed.”