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Regional Report: South Atlantic States Thriving In Recession Rebound

The South is staying financially fit with investments and innovations in logistics, automotives, energy, biotech and renewables.

Apr/May 10
The South Atlantic states of Florida, Georgia, North Carolina, South Carolina, Virginia, and West Virginia are finding ways not just to survive during America's Great Recession, but to thrive. Each state is assessing its strengths and finding better ways to make its material and intellectual assets stronger, leaner, and more competitive. Here is a look at some of the factors responsible for the region's prosperity.

Moving Products
First, some good news: Increased import and export activity in the South Atlantic region signals that the U.S. economy is beginning to bounce back, according to Tim Feemster, senior vice president and director of global logistics for Grubb & Ellis.

Feemster found that container traffic in January 2010 exceeded traffic in January 2009 at the ports of Miami, Jacksonville, Savannah, Charleston, and Norfolk. And since April 2009, "there has been an incremental increase in the volume of goods on a month-to-month basis," Feemster said. "That's good news for the economy."

Since East Coast railroads "pull off of" coastal ports, positive reports from the railroads signify success at the ports. "Ports don't submit weekly data like the railroads," Feemster said. "But we can tell a turnaround has happened at the East Coast ports since the latest first quarter information already indicates that railroad international container movement for 2010 is expected to exceed the 2009 levels. Already through week 11 of this year, container volume was up 11.8 percent over the prior year."

The ongoing expansion of the Panama Canal, expected to be complete by 2015, also affects this region's economic development. "They're now installing new locks so an increased number of larger ships can travel from Asia to these ports. Today you can only move 4,800 TEU [twenty-foot equivalent unit] ships through the Canal, but soon 12,600 TEU ships will be coming through as well." Anticipating these changes, Atlantic ports are beefing up railroad yard infrastructure and investing in new cranes and equipment to efficiently move consumer goods off these bigger ships into the logistics chain.

Diverting Asian imports from West to East Coast ports via the Canal (a trend that began in 2003) continues. It's becoming a permanent strategy of distributors feeding East Coast consumption. One reason? Diesel fuel prices have increased 35 percent in the past year, making transportation by ship to South Atlantic ports attractive.

No wonder logistics is a major regional business. Georgia in particular is a big player. Air Cargo Week named the Hartsfield-Jackson Atlanta International Airport its "Airport of the Year" in 2009. The state has nearly 11,000 logistics service providers, and is the headquarters for UPS, Delta, and SAIA. Its Savannah container terminal is the nation's third largest. According to the Georgia Department of Economic Development, "nearly 21,000 companies throughout all 50 states rely on the deepwater ports in Savannah and Brunswick and export to 153 out of 195 countries across the globe." On the road, 5.9 million tons of freight moves across Georgia's 21,200 miles of highway each week.

North Carolina's 11-county southeast region offers excellent transportation access via the international Port at Wilmington, three interstate highways, and a CSX Transportation national rail corridor.

Last fall the South Carolina State Ports Authority received good news. TBC Corporation chose Charleston for its new, 1.1 million-square-foot tire distribution center, and Boeing announced plans to construct a 787 jetliner assembly plant in North Charleston. The Port of Charleston was a key factor in both decisions.

Virginia's global logistics industry employed over 73,000 people in 2008, and its economic output totaled $8.9 billion. This sector supports an additional $6.5 billion in economic activity in the state. The Port of Virginia handles more than two million TEUs each year, and is known for being the home of the world's fastest and biggest container cranes.

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