Port Issues Sway Manufacturer To Go East For New Distribution Center

OA Logistics' decided on the Savannah, GA area to build a new distribution center instead of the West Coast, wanting to avoid possible disruptions caused from the port labor battle.

Amid labor strife and other ongoing problems at ports along the western coast of the U.S., one manufacturer has decided to construct a new warehouse 2,500 miles away.

OA Logistics makes the vast majority of its home furnishings in China, but company officials have decided conditions on the West Coast have deteriorated to the point that they've decided to expand their operations on the eastern seaboard.

OA executive Rodney Dickey last week announced the new 1.1 million square foot facility would be constructed near Savannah, Georgia, in close proximity to the company’s existing distribution center. Dickey, however, also said there's "no doubt" avoiding the Pacific Coast played a role in the decision.

Thousands of dockworkers at 29 West Coast ports have been working without a contract since last summer, when their previous deal with the Pacific Maritime Association expired. Although work has continued, both sides have accused the other of deliberately slowing down productivity, leading to near-gridlock at larger ports such as the massive Long Beach and Los Angeles docks. Those issues have hit a critical level, as the PMA shut down vessel loading and unloading operations this past weekend and warned that a complete port shutdown could begin imminently.

Georgia has particularly benefitted from the problems on the opposite shore, with the Georgia Ports Authority reporting a 7 percent increase in cargo tonnage in the last six months of 2014 -- and a 13 percent increase in Savannah alone.

The Savannah port, however, is also experiencing a property crunch, with OA noting it is seeking a new building site rather than looking for a vacant facility. Local economic development officials say although there's some danger in the current circumstances, they're confident new facilities will help alleviate pressure for industrial space.