MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE in other “corners” of the US, growing from the 12th-largest to the 3rd-largest container gateway nationally and establishing a leading market position regionally over the last 20 years. The growth has been driven by several catalysts, with a critical one being the West Coast lockout in 2002, which caused importers to diversify supply chains into the Southeast and Northeast beyond the Pacific Southwest, which had been the sole source gateway for many. The deployment of larger ships through the Suez and Panama canals has supported the consolidation of regional service to Savannah along with a nearly 20% swing in coastal market share of Asian imports to East Coast ports. Overall trade flows are well balanced for a gateway, as Savannah is also a major export point and the second-largest port for US exports. As Savannah rose it surpassed Norfolk, Charleston and Jacksonville (and many other ports) along the way. While Savannah increased market share relative to the entire US port sector, its establishment as a regional cargo center particularly affected Southeast ports, including the closest/most proximate competitor, Charleston, as vessel service and related operations were consolidated toward Savannah. Exhibit 2 Savannah has grown in relevance as a national gateway… Savannah volume as % of select port volume SAV vs. LA/LB 0% 10% 20% 30% 40% 50% 60% 70% Seattle, Tacoma and Vancouver Source: Moody's Investors Service SAV vs. NY SAV vs. SEA/VAN 250% 200% 150% 100% 50% 0% Jacksonville, Broward and Miami Source: Moody's Investors Service Growth has been exceptionally strong. Container throughput grew 20% in fiscal 2021, and has grown at a CAGR of 6% for the last decade (2012-2021), and 7% for the last two decades, nearly double the sector average. Notably, the growth has occurred despite a more than 5-foot draft differential to Charleston and Norfolk. This differential will continue in the medium term, but is unlikely to become the determining factor in routing among Southeast ports. Good growth potential as national gateway port Relative to gateway ports in Los Angeles and New York, Savannah benefits from 1) better regional market population growth, 2) lower terminal charges, with a labor model that supports competitive costs and productivity, and 3) more abundant and affordable available/ developable land, and a lower level of roadway congestion, relative to ports in highly urbanized environments. Growth prospects for Savannah would likely be positively affected by a shift in sourcing away from China into Southeast Asia and India (or Africa), as this would make Suez routing more competitive – and while we expect any shift will be gradual, Savannah's long-term growth is not exposed to this risk factor to the same degree as West Coast gateways. Combined, these factors support our expectation that Savannah will maintain a competitive position as a gateway port. While Savannah does not have a large adjacent local population center like Los Angeles or New York, it is the closest port to Atlanta – the freight hub of the Southeast – in addition to Memphis, Nashville and Birmingham, and is highly competitive in serving via truck or rail a geographic region with 20% of the US population. As discussed below, import demand is further anchored by the distribution operations of major retailers and shippers near the port. Exhibit 3 … and has established a substantial regional market position Savannah volume as % of select port volume SAV vs. CHS SAV vs. NFK SAV vs. JAX/PEV/MIA 3 14 October 2021 Georgia Ports Authority: New rating for $420 million of bonds
