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Peter Zeihan

Geopolitical Strategist

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Why the Port of Savannah is poised for success

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Peter Zeihan

Geopolitical Strategist

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Savannah, Ga. is home to the largest container seaport in the United States. It is also the only American city which has constructed a “super container port” since 1920. While this port processes huge volumes of shipments, it is an outlier among U.S. ports, most of which remain hamstrung by the strict regulations of the Jones Act.

Straight Arrow News contributor Peter Zeihan continues to recommend the abolition of the Jones Act, but also proposes alternative solutions to pursue in the meantime, including a direct railway into Mexico City and the expansion of port capacity in Veracruz, Mexico. Zeihan argues that Mexico can help the United States process larger shipments, but it will need U.S. investment in order to do that. Zeihan contends in either case, the expanding port city of Savannah will continue to play a vital role.

The following is an excerpt from Zeihan’s Nov. 21 “Zeihan on Geopolitics” newsletter:

Savannah is awesome!

Not only is it home to my favorite bar and one of my favorite food scenes, but it is also the site of the largest containerport in North America. For the people of Savannah, a lot of the hard work has already been done. They are well positioned to thrive no matter what happens with the global environment or how Americans do or do not take advantage of the changes.

Also, the best shrimp and grits on the planet.

Everybody, Peter Zeihan here coming to you from Savannah, one of my favorite cities in North America, and one of the reasons is the bars, and one of the reasons [is] the restaurants, and the other one is [it’s] home to the largest container port in the continental United States. [It’s] been operating for a few years now [and they] keep expanding it.

You’re looking at here, one of the nurse medium-sized ships, the supers do come through here, they just have a problem getting through that bridge there. All right, it’s raining, we’re gonna do the rest of this inside.

Sorry, I got waylaid by the client and couldn’t do the rest of this one from Savannah. So, I’m back home. Two big reasons to be really bullish on and really impressed by the Port of Savannah over the years to come. The first has to do with that Jones Act that I keep talking about, the law that says that only American vessels can dock at American ports in succession. So, for example, if you’re in a cargo vessel, and you’re delivering things to the Chinese coast, the same vessels go point [to] point, point point point. But if that same vessel, it’s Japanese, was to come to the U.S. West Coast, and it stopped in Seattle, it would then have to go back to Vancouver before it could go to San Francisco, then would have to go back to Vancouver before it could go to San Diego. As a result, the push for ports is to get bigger and bigger and bigger in order to take these big foreign vessels that [have] crowded out smaller American ones. And because the infrastructure required to do that requires a large chunk of land, and most American cities don’t have a lot of port capacity.

Instead, what you get are shuttle ships, where you’ll take a big vessel into a place like Kingston, Jamaica, and the cargo will be relocated onto a lot of again foreign vessels that will then go directly to Miami or go directly to Charleston or go directly to New York. And as a result, the Jones law has just completely hollowed out the American maritime space.

Savannah is the first location in the United States since 1920 to manage to build a super container port, it’s up river a bit. But the biggest vessels, some of the biggest vessels in the world go there regularly, you saw the one that was coming through that was actually a fairly small one. But it’s the only place in the continental United States [that] can actually take these vessels all at once. With the exception of maybe Long Beach, other places tend to do more mix of business. So for example, but the Takoma port does take fairly large containers, but it’s also a major export point for commodities coming out of the intermountain interior of eastern Washington and Oregon. Anywho, bottom line is, as long as we have these very, very large container ships, which are the norm for international trade right now, Savannah is really the only place in United States that can take them on the east coast at all. New Jersey just isn’t up to snuff in that regard. So that’s issue number one.

Issue number two: If we’re moving to a de-globalized period, we’re going to have a lot of different patterns here. And our interactions with the Mexicans are gonna become much, much much, much more robust. Now there are some limitations on the infrastructure between Texas and Mexico that do a decent job of integrating the northern tier of states, but half of the population of Mexico is in the greater Mexico City area. And if we’re going to have the expansion industrial plant that we need in North America, in order to deal with a post-Chinese environment, we’re going to have to metabolize a lot of what is in central Mexico. Now, there are two ways you can do this. The first one is to build a really robust multimodal roads and rail system going from the border all the way down into the Mexico City core, we should definitely do that.

The second one is to turn Veracruz, once again, into a very, very large port, so that product from Mexican city court can go down to Veracruz, get on a vessel and then come up to the United States. Now you can do that in one of two ways as well. You can use small shuttle tankers that go to places like Houston, or New Orleans or Miami. Or if you’re more interested in the eastern seaboard, you just put it on a mega ship and you put it in Savannah. So it doesn’t really matter which path we’re on here or how smart or how dumb we are in taking advantage of the changing world around us. Savannah has got the hardware in place for really any possible scenario here. And so the ships are gonna keep coming. And so am I.

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