Seaports, seaport-related activity major contribution to U.S. economy

Seaports — and protecting and serving seaports — are good business. Last year, U.S. deep-draft seaports and seaport-related businesses generated approximately 8.4 million U.S. jobs and added nearly $2 trillion to the economy, according to a study by a Lancaster, Pennsylvania-based business consulting service specializing in port-sector economic impact studies. Based upon 2006 U.S. port cargo statistics and thousands of port-sector interviews, Martin Associates late this month completed an in-depth study into the economic impact of coastal and Great Lakes ports, examining aspects ranging from jobs and wages to business and tax revenues. Of the 8,397,301 Americans working for ports and port-related industries in 2006, nearly 7 million were employed by firms involved in handling imports and exports, such as retailers, wholesalers, manufacturers, distributors and logistics companies. “The tremendous growth in overseas trade volumes moving through our ports in the past decade has been a huge boon to the American economy,” said Kurt Nagle, president and chief executive officer for the Alexandria, Virginia-based American Association of Port Authorities. “The jobs these imports and exports create are spread throughout the country, not just in port cities, making them a vital part of our nation’s economic fabric.”

The study also shows that businesses providing goods and services to U.S. seaports directly and indirectly paid $314.5 billion in total wages and salaries. Of this total, $207.4 billion came directly from businesses involved in handling international waterborne commerce. The 2006 report also shows that port-sector businesses generated a high rate of economic output, with business revenues and the value of the goods and services they provided totaled $1,976.4 billion, or nearly $2 trillion. In addition, port-sector businesses paid more than $102 billion in federal, state and local taxes in 2006. Dr. John Martin, president of Martin Associates, said that “Compared to the last study we developed in 2000 (based upon 1999 data), these figures indicate a significant increase in the financial benefits that the port industry provides the American economy…. This new report shows that port-related activities are contributing to the economy in record numbers.”

Looking specifically at employment in U.S. seaports, the study shows that 507,448 Americans held jobs such as terminal operators, longshoremen, freight forwarders, steamship agents, ship pilots, tug and towboat operators, chandlers, warehousemen, as well as jobs in the dredging, marine construction, ship repair, trucking and railroad industries. These direct port-sector jobs supported another 630,913 induced jobs due to purchases of food, housing, transportation, apparel, medical and entertainment services. Also included as induced jobs were those with local, state, and federal agencies providing support functions such as education and municipal services. The port-sector firms providing direct services to the cargo and vessel activity at the nation’s seaports made $26.3 billion in purchases to support their direct activity, supporting another 306,289 indirect jobs. These include jobs with suppliers of parts and equipment, firms providing maintenance and repair services to the businesses dependent on port operations, utilities providing services to marine terminals, and office supply firms.

Port-sector jobs tend to pay above-average wages: The number of direct, induced, and indirect jobs from business activities at U.S. ports stood at 1,444,650, and the earnings and consumption dollars from those jobs came to $107.1 billion. Overall, port-sector workers today earn, on average, about $50,000 a year, which is $13,000 more per year than the National Average Wage Index, as computed by the Social Security Administration.

The study was developed using individual economic impact models based on interviews with more than 10,000 port tenants, maritime service providers, trucking firms, railroads, terminal operators, towing companies, pilot associations, and other port-related entities. The models were updated using 2006 import and export data provided by the U.S. Maritime Administration (MARAD), as well as port-specific data for domestic cargo shipments handled at the ports but not included in the international cargo data provided by MARAD. Using these port specific models for more than forty specific ports, the study’s authors were able to translate the cargo activities into direct, induced, and indirect port-sector impacts as well as impacts from users of the nation’s seaports. Not included in the analysis are the financial benefits of cruise operations at U.S. ports as well as the economic impacts of inland, shallow-draft ports and the shipping activity they generated.