July 20, 2022

Struck by the power of the ports

stump-blog-photo-savannah-port.jpeg
Stuart Stump Mullens
by
Stuart Stump Mullens

Originally published in Furniture Today

Recently I had the opportunity to tour the fastest-growing and third-largest-by-volume container terminal in the United States: the Port of Savannah. Upon driving on site, located just seven minutes from Savannah’s historic city-center, the first thing that struck me was the scale of this massive enterprise. The Port has a staggering 10,000 feet of continuous berth space, containers stacked and stored as far as the eye could see, cranes reaching hundreds of feet in the air and a seemingly endless line of trucks. Not to mention all the ships stacked high with containers, more resembling cityscapes than boats.

The Port of Savannah has experienced massive growth over the past 15 years, as have other leading ports in the country. It has invested consistently in infrastructure and technology to keep pace with the import and export needs of the U.S. economy.

Helpful in facilitating this growth is the bi-modal transportation options, with two rail companies running multiple lines each through the port and extensive trucking infrastructure. Worth noting is that it is also the closest and fastest option by rail to many of the major centers in the Southeast: Atlanta; Birmingham, Ala.; Charlotte, N.C.; Memphis, Tenn.; and Orlando, Fla.

The Port’s import containers are growing at double the rate of exports over the past 15 years (8% YOY vs. 4% YOY respectively; see chart). This growth in imports has led to a dramatic increase in warehouses and distribution centers nearby to facilitate more seamless logistics through the port.

stump-blog-graph-savannah-port.jpeg

Recently, several major home furnishings companies have announced warehousing and DC infrastructure nearby:

  • Serena & Lily is opening a 1.2-million-square-foot distribution center on Highway 21 in Rincon just 15 minutes from the Port of Savannah this summer.
  • Hooker Furniture opened an 800,000-square-foot distribution center 35 miles from the Port of Savannah in December 2021.

It was fascinating to witness the impact of the international supply chain crisis here at this port. One key addition has been a storage program to deal with the increased number of containers that come to into port but must wait for the needed trucks and rail cars to take them off premises.

This is important, as the average number of days that a full container now sits at the port is estimated to have almost doubled since 2020. This is the case throughout the U.S. and is adding costs to importers who are now facing additional charges if they cannot arrange for their (frequently third party) logistics to pick up their containers in the allotted amount of time.

Expertise in supply chain and logistics will continue to be a key differentiator for home furnishings companies, particularly in this volatile market environment. We believe the M&A market will continue to value logistics expertise (alongside product excellence, of course).

stump-blog-photo-team-at-savannah-768x430.jpeg

Overall, a fascinating day. Interested in discussing further? Give us call.

And a big thank you to the exceptional lawyers Oliver Maner LLP, who specialize in work at the port, for letting me join their tour.

Related News

Bo Stump
Articles & Publications

A look at private equity in the furniture industry

by Bo Stump
Bo Stump dives into the increasing role private equity has played in the evolution of the residential furniture industry and M&A transactions.
Bo Stump

A look at private equity in the furniture industry

Bo Stump dives into the increasing role private equity has played in the evolution of the residential furniture industry and M&A transactions.
Mergers & Acquisitions
Articles & Publications

An Outlook on the Furniture Industry

by Bo Stump
2020 has proven to be the most challenging and perplexing year of the new century. A global pandemic went from 0 to 6 million cases in a matter of months, with hundreds of thousands of casualties. The crisis sparked rapid job layoffs, business closures, plummeting GDP numbers, and a collapse in equity markets.
Mergers & Acquisitions

An Outlook on the Furniture Industry

2020 has proven to be the most challenging and perplexing year of the new century. A global pandemic went from 0 to 6 million cases in a matter of months, with hundreds of thousands of casualties. The crisis sparked rapid job layoffs, business closures, plummeting GDP numbers, and a collapse in equity markets.
Desk.jpeg
Articles & Publications

An Outlook on the Furniture Industry

by Bo Stump
The furniture industry, like many others, has experienced rapid changes this year. Most notably: Consumption Patterns. The existential COVID-19 mandate to work (or for many, live) at home all day, every day, has been a boon to home and home office furnishings suppliers, as many consumers realized they needed a better home office, while others took the opportunity to upgrade dining and living areas.
Desk.jpeg

An Outlook on the Furniture Industry

The furniture industry, like many others, has experienced rapid changes this year. Most notably: Consumption Patterns. The existential COVID-19 mandate to work (or for many, live) at home all day, every day, has been a boon to home and home office furnishings suppliers, as many consumers realized they needed a better home office, while others took the opportunity to upgrade dining and living areas.
Stump Interview in Axial
Articles & Publications

Stump Interview with Axial

Axial interviewed Stump's second generation partners, Stuart Mullens and Bo Stump to get their first hand perspectives on furniture sales trends.
Stump Interview in Axial

Stump Interview with Axial

Axial interviewed Stump's second generation partners, Stuart Mullens and Bo Stump to get their first hand perspectives on furniture sales trends.