The Economic Impact of the
Ports of Louisiana
Prepared for the
The Ports Association of Louisiana
Prepared by
Dr. James A. Richardson*
Alumni Professor of Economics
Louisiana State University
Assisted by
Mr. Roy L. Heidelberg
Doctoral Student
The Ohio State University
March 2012
*Dr. Richardson is solely responsible for the facts, findings, and conclusions presented in this report.
Table of Contents
Page 1
Page 2
Introduction and Purpose
Map 1. The Ports of Louisiana
Page 3
Analysis of Economic Impact of Ports
Page 4
Economic Impact of Ports and Port-sensitive Businesses
What has happened to the Ports in the last ten years?
Figure 1. Net Assets and Net Income of Ports, 2000-2010
Page 5
Economic Impact of Capital Investment
Figure 2. Tons of Cargo Going Through Port of South
Louisiana
Page 6
Economic Impact of Ongoing Port Activities
Figure 3. TEUs at the Port of New Orleans
Table 1. Estimated Economic Impact of a $100 million Capital Investment
Page 7
Economic Impact of Direct Spending by Providers of Port & Vessel Services,
Other Transportation Services, and Companies That Are Port-Sensitive and
Located on Port Property
Table 2. Estimated Economic Impact of Ongoing Operations
Page 8
Table 3. Estimated Value of Cargo Handled by Louisiana Ports
Economic Impact of Cruise Ships
Combined Economic Impact of Ports and Providers of Port & Vessel Services
and Port-sensitive Businesses
Table 4. Estimated Economic Impact of Firms Providing Services & Firms
Located on Port Property
Table 5. Estimated Economic Impact of Cruise Ships in Louisiana
Page 9
Incremental Change in Tonnage and Impact on Economy
Table 6. Economic Impact of Ports, Providers of Services, Port-sensitive
Industries, and Cruise Ships
Table 7. Economic Impact of a 5% Increase in Cargo at Louisiana Ports
Economic Impact of Users of Ports
Page 10
Figure 4. Regional Employment
Page 11
Figure 5. Employment Share by RLMAs
Figure 6. Estimated Value of LA Agricultural Exports
Page 12
Figure 7. Export and Import Commodities Using Louisiana
Ports
Page 13
Figure 8. Commodities as a Percentage of all Manufacturing
in Louisiana
Table 8. Estimated Economic Impact of the Industries Connected to Global
and Nationl Trade
Economic Impact of Out-of-State Users of Ports
Page 14
Figure 9. Exports of Selected States
Page 15
Figure 10. Imports of Selected States
Page 16
Summary Remarks
Economic Impact of Louisiana Ports
Introduction and Purpose
T
he Ports Association of Louisiana (PAL) commissioned
a study evaluating the economic impact of the network of
ports in Louisiana. There are 28 active and 5 developing
ports in the state with a wide variety of sizes, missions, and
responsibilities. The services provided by these ports help
support and sustain local, regional, and statewide economies.
Each port offers unique advantages and helps to encourage
industrial development, directly and indirectly providing
jobs to local citizens and revenues to local governments. This
uniqueness is an important and valued trademark of Louisiana ports. In our interviews with port directors and visits to
port sites, a common refrain was that if you have seen one
port, you have seen only one port. Each port has a special
role to play in its respective region, consequently, has special
effects upon economic activity in the region. No two ports
are exactly alike.
The conventional picture of a port is a place of high-volume
water cargo movement connected to road and rail transportation connections. A number of ports in Louisiana can be
defined in this way; in fact, the state of Louisiana has five
of the largest ports in the United States: the Greater Baton
Rouge Port, the Port of Lake Charles, the Port of New Orleans, the Port of South Louisiana, and Plaquemines Port.1
Among these ports there are differences in the types of cargo
exported and imported (bulk, breakbulk, and/or container),
the value of the cargo, and the distinction between foreign
and domestic cargo. In addition, the Port of New Orleans
services cruise ships, the only port in Louisiana to do so,
thereby providing a substantial stimulus to the tourist trade
in the New Orleans area. Of the five largest ports, four are
located along the Mississippi River while the Port of Lake
Charles, servicing the southwestern part of the state, is on
the Calcasieu River.
392,000-square-foot plant at the Port of Lake Providence
that will be the world’s largest bio-based succinic acid plant,
a subset of the various attempts to assist the United States in
being less dependent on foreign oil.
Throughout the state, ports focus on industries that are important to the statewide economy. The Port of Iberia accommodates companies that provide offshore drilling rigs and
platforms with component parts. Companies located at the
Port of Iberia require access to the Gulf of Mexico since they
provide products to the offshore platforms and rigs. These
companies provide jobs within the region around the Port
of Iberia as well as accommodate the material demands of
the offshore oil and gas industry. The Port of Iberia and the
channel from the port to the Gulf of Mexico enable these
companies to service the offshore rigs and platforms.
The Morgan City Harbor and Terminal District, at the intersection of the Atchafalaya River and Bayou Boeuf, accommodates companies essential to the oil and gas industry
and handles bulk, breakbulk, and containerized cargo. Port
Fourchon in Lafourche Parish connects the onshore services
needed for the exploration, drilling, and production of oil
and gas in the offshore with the intermediate and final users within the states. Port Fourchon directly services approximately 90 percent of all deep-water offshore rigs and
platforms in the US Gulf of Mexico and nearly half of all
shallow-water rigs and platforms in the region. These rigs
produce 16-18 percent of the country’s oil supply.2
With variety in the services provided comes variety in the
revenues received. Some ports in Louisiana provide services
to the various users of the ports while some ports generate
revenues primarily by leasing property to tenants. A number
of ports have an ad valorem millage that is assessed on property within a defined boundary.
The other active ports in the state provide a variety of services to other ports, the waterways, and the local communities
in which they are located. The Greater Ouachita Parish Port,
located along the Ouachita River, supports local industries
in the northeastern part of the state by shipping containerized cargo via rail to ports on the nation’s east coast. Some
ports function in supporting roles, such as West Calcasieu
in southwest Louisiana, where the port supports marine services that play key roles in cargo shipments along the Gulf
Intracoastal Waterway (GIW), a waterway that stretches
over 1,000 miles from Carrebelle, Florida to Brownsville,
Texas. Some ports, such as the Caddo-Bossier Port in northwest Louisiana located along the Red River, are significant
industrial parks that promote tenant land use in order to
foster increased economic activity within the region. Myriant Lake Providence Inc. is in the process of building a new
The common thread that connects all of the ports together is
that each port offers services to industries that are mainstays
of the Louisiana economy and are significant contributors
to the regional economy. Ports expand the marketplace for
such important state commodities as agricultural products,
chemicals, petroleum and coal products, processed food, paper and wood products, fabricated metals, and transportation equipment. The ports serve as an intermediary connecting producers with buyers. The converse of this process is
equally important. Louisiana companies purchase raw materials from global and national markets and, through production and refinement, supply goods to consumers. Examples
of such commodities include coffee beans, oil, and steel. Additionally, recent prospects for natural gas production in the
Haynesville Shale region have increased the demand for imported frac sand for the extraction process associated with
the horizontal drilling operations. The transportation of frac
sand affects deep draft ports, coastal ports, and inland ports
1
2
Based upon total tonnage. Source: American Association of Port Authorities.
http://www.offshore-mag.com/supplements/port-of-fourchon.html
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Economic Impact of Louisiana Ports
since the horizontal drilling is occurring in northwestern
Louisiana. And, as the Tuscaloosa Marine Shale continues to
show promise, inland ports in central Louisiana can expect
increased activity.
Even if an inland port does not transfer high volumes of cargo, the port still provides services to industries in its region
by serving as an intermodal transfer point for commodities,
including waterway, rail, and highway, by attracting businesses to an area with competitively priced land, and by
providing other services essential to attracting and retaining
businesses. Ports are typically not producers of commodities; ports also do not directly enhance the products that are
imported before they are transported to final consumers.
However, the ports serve as an intermediary that connects
production with use. Even though we conventionally associate ports with communities along major waterways, we must
keep in mind that ports are most fundamentally about transportation of goods, whether by air, rail, road, or water. Moreover, access to goods and raw materials affect most goods-
Map 1. The Ports of Louisiana
producing industries in Louisiana and other states.
The ports throughout the state can be divided into four categories based primarily upon the physical characteristics of
the port. Thirteen ports are considered inland ports, shallow-draft ports designed to work with the cargo or industrial
needs in the region. There are nine shallow-draft ports along
the coast, the coastal ports of the state, which service the
offshore industries, such as commercial fishing and oil and
gas industry. The deep draft ports move large quantities and
high volumes of cargo from throughout the world. In Louisiana, there are six such ports, five of which are located along
the Mississippi River in southeast Louisiana and the other is
located in Lake Charles. Other ports are still in development
mode. There are presently five developing ports. All of the
ports are illustrated in Map 1.
The physical characteristics of a port determine the kind
of economic activities available to it. The deep draft ports
handle the high volume cargo that is characteristic of the
conventional public image of a port. The coastal and inland
2 of 16
Economic Impact of Louisiana Ports
ports support industries in their respective regions as well as
facilitate the movement of cargo within its region. The coastal
ports focus on offshore oil and gas activities and cargo moving along the GIW. Among the inland ports, a primary role
may be that of an industrial park, where businesses locate
in order to make use of the infrastructure and accessibility
advantages offered by the port, including the use of inland
waterways. These ports also offer more transportation options to firms needing to move products.
The multitude of services and activities make it difficult
to aggregate the effect of ports in general to one economic
impact number that is truly applicable to every port. It is
reasonable, however, to aggregate the estimated economic
impact of the ports and to extrapolate that all of the ports
together have a single impact upon the economy and, at the
same time, recognizing that each port offers unique advantages and potential for economic development.
The purpose of this report is to provide an estimate of the
aggregate economic impact of Louisiana ports focusing on
the capital investments that have been made and those investments projected to be completed in the future and on
the ongoing operations of the ports. The capital investments
may fluctuate from year to year and will surely be distributed
among the various ports so all of the investments will not
occur at the same port or in the same region of the state. The
ongoing operations of the ports will be sustainable over a
long period of time.
Analysis of Economic Impact of Ports
T
he following spending sequence is an example of how
ports have an economic impact on the local regions and the
state:
1.
2.
Ports operations serve as the first stage of the economic impact. The dollars spent by the ports create and support other businesses in the area and
other jobs in the region. The first stage of the economic impact of the ports will be the estimated
direct spending by the ports themselves, including
both capital investments and ongoing operations.
A second stage of spending is by companies that
have located in Louisiana or are operating in
Louisiana because of the existence of the ports.
Such companies include providers of marine services, companies that require access to the waterways and port services, companies located on
port property, and cruise ships that require port
services if they are going to dock in a city. These
companies make capital investments and carry
out ongoing operations.
a.
Providers of vessel and port services include
steamship companies, stevedoring companies,
navigational services, ship supplies, customs and
other public sector activities, longshoremen, ship
repair, marine insurance and legal services, custom house brokers, and others. All of these companies spend and invest in the respective regions.
3.
b.
Other transportation services, including rail,
barges, and road, represent another stage of
spending. The presence of the ports and the
waterways, including the GIWW in Louisiana,
support this interconnection. Ports are primarily
about moving cargo and help constitute intermodal links that include vessels, barges, trains, and
heavy trucks.
c.
Companies on port property that require waterway services associated with the port, such
as access to the Gulf of Mexico, or other services
provided by the ports. These companies invest
and provide jobs for many citizens in the state.
d.
Spending by participants of the cruise ship industry has effects upon local economies, primarily the tourist trade in New Orleans.
Port users (exporters and importers) represent the
final stage of economic activity within the state related to the presence of the ports within the state.
This activity is potential insofar as these port users could find alternative methods if the ports did
not exist or if the ports proved inadequate for the
companies’ needs. Port users are major industrial sectors in the Louisiana economy and their
market ranges from regional to global. Port users
may export around the globe or import materials
that they transform into a product to be used in
further production of a final good to be sold to
consumers. Port users also include firms outside
the state that ship their goods through a Louisiana
port or receive shipments from a Louisiana port.
a.
b.
Exporters and importers within the state have
the following potential impacts:
i.
Impact on the demand for providers of port
and vessel/barge services (as captured in items
2 and 3 above)—the more exporters and importers within the state, the greater demand
for ports and the providers of port and vessel/
barge services
ii.
Direct impact on the state’s production of
goods in industries requiring transportation
options
Exporters and importers outside state impact the
Louisiana economy because the more volume of
goods that are transported through Louisiana
ports increases the demand for ports and providers of port and vessel/barge services and other
transportation services in the state (again as captured in items 2 and 3 above).
The focus of this document is the economic impact of the
ports within the state of Louisiana. Obviously, the ports,
the service providers, and businesses that require port services or waterway access have an economic impact within
the state. The ports make these economic activities feasible.
Thus, we will estimate the economic impact of the ports, the
providers of marine services, and companies needing the
3 of 16
Economic Impact of Louisiana Ports
special services provided by the ports, such as companies
needing access to waterways or companies servicing cruise
ships. For some of these firms the ports and the providers of
port and vessel services are a necessary condition for their
economic activity. Other firms that locate on port-owned
property could locate on other property within the region,
though many of these firms have a direct connection to services provided by the ports.
modes of transportation. Out-of-state exporters and importers are looking around for the best transportation options
and Louisiana ports provide an option or options for these
out-of-state businesses.
The exporters and importers within Louisiana benefit from
the presence of the Louisiana ports. The success of their operations depends upon the services provided by the ports in
Louisiana. These in-state exporters and importers demand
the services provided by the Louisiana ports and private service-providers, and their operations directly affect the state’s
economy above and beyond the transportation services that
might be required. The Louisiana ports serve a role in the
economic impact these firms have on the Louisiana economy, although it would not be correct to conclude that all of
these firms would close down or could not operate in Louisiana without the presence of the Louisiana ports. Companies
would seek alternative transportation options. Cost effective
ports make Louisiana more attractive for companies that
have a national and global market place. We will focus on
the economic impact of industries in Louisiana that utilize
water transportation.
he economic impact of ports comes primarily from two
types of spending: direct purchases made by the ports themselves and the direct spending in Louisiana by the service
providers to Louisiana ports and vessels/barges, other types
of transportation alternatives, and other businesses located
on port property because they require access to the various
waterways or because of other special services provided by
the ports. This spending can be for capital investments and/
or for ongoing operations. The capital investments will be
recurring in the sense that some capital improvements will
be ongoing at some port in any one year, but a single port
will not necessarily have capital investments going on every
year. The operations of the ports will be continuous. These
spending inputs into the state’s economy induce spending
among businesses and individuals not directly linked to
port-related activity.
Finally, we will discuss the importance of firms operating
outside the state upon the market for Louisiana ports and
port services. The expansion of the out-of-state market for
Louisiana port services will accelerate and augment the demand for activities within each port and the port and vessel services that accompany such expansion of trade at the
Louisiana ports. In this case, Louisiana ports are just businesses located in the state that are competing with out-ofstate businesses, or in this case out-of-state ports or other
Figure 1. Total Net Assets and Total Net Income of Louisiana
Ports, 2000-2010
Deep Draft Ports
Coastal Ports
Inland Ports
average increase = $57.4 million
38% increase
$20.3 million
189% increase
$7.5 million
101% increase
$100 million
200
300
400
500
600
Increase in Total Net Assets of Louisiana Ports, 2000-2010
0
Deep Draft Ports
Coastal Ports
Inland Ports
average increase = $2.9 million
$1.3 million
$0.3 million
$5 million
10
15
20
25
30
35
Economic Impact of Ports and
Port-Sensitive Businesses
T
The first step in the analysis is to document the recent history of Louisiana ports focusing primarily upon the financial
activity of the ports. It is important to monitor the financial
strength and sustainability of the ports along with the change
in actual activity at the ports in terms of cargo movements
and other business developments.
What has happened to Louisiana Ports over last 10 years?
Ports in the state have grown financially in terms of net assets
and net income over the last decade even while employment
in the state has been relatively stagnant. Statewide employment has declined from 1,869,013 employed persons in 2000
to 1,834,338 in 2010, a 1.8 percent reduction in statewide
employment over the decade, which means a loss of approximately 35,000 jobs.3 This trend reveals both the long-term
issues of rebuilding the economy in the New Orleans area
after the devastation of Hurricane Katrina in 2005 as well as
the impact of the national economic downturn in 2008 and
2009 and the continuing lethargy of the national economic
recovery.
The total net assets of ports, as illustrated in Figure 1, increased by almost $600 million, approximately $60 million
per year from 2000 to 2010. Coastal ports grew the most rapidly by almost 190 percent; inland ports more than doubled
their total assets. The deep draft ports had an increase in net
assets of nearly 40 percent. Net income (operating and non-
Increase in Total Net Income of Louisiana Ports, 2000-2010
3
Louisiana Workforce Commission, Annual Wage and Employment, various
publications.
4 of 16
Economic Impact of Louisiana Ports
operating revenues less operating expenses) grew by almost
$34 million over the ten year period for all ports, an average
of about $2.9 million per year for the deep draft ports, $1.3
million per year for the coastal ports, and $0.3 million per
year for the inland ports.
low established during the recovery from Katrina. In 2010
and 2011 the average TEUs now number approximately
450,000, a remarkable increase. This level of TEUs is expected to be maintained and to grow, but certainly not at the
same rate of growth from 2008/2009 to 2010/2011.
The same factors affecting the overall Louisiana economy—
hurricanes and the national downturn—also affected the
ports of the state; however, the ports have been able to grow
financially during the last decade while the overall Louisiana
economy was relatively stagnant. The increase in net assets
illustrates the growth in the overall capacity of the ports to
sustain real increases in handling cargo throughout the state.
The Caddo-Bossier Port received its first load of cargo in
1995, a single movement of stone, and has received over 5
million tons of cargo over the last 17 years. In 2008, according to the port’s annual report, the port had eight business
partners at its site. In 2009 they added five additional business partners. In 2010 there were 14 business partners listed
in their annual report, and from 2008 to 2009 the port’s total
tonnage increased by 15 percent driven by a 29 percent increase in rail tonnage. This was on top of an already remarkable increase in of 50 percent in rail tonnage for 2008. By
2011 the Caddo-Bossier Port had 20 tenants located on their
property with almost 1,500 employees.
In real terms ports experience the same ups and downs other
industries incur in any economy. In recent years there has
been a surge of port activity around the state. As one example, the Port of South Louisiana in 2011 handled 273,991,603
short tons of cargo, its largest amount of cargo ever serviced.
Over the first decade of the 2000s, cargo tonnage at the Port
of South Louisiana varied from a low of 226,734,855 tons in
2009 (during the national economic downturn) and peaked
in 2006 with 262,891,711 tons. The cargo going through the
Port of South Louisiana is illustrated in two- year averages
from 2001 through 2011 in Figure 2.4 Tonnage prior to 2005
averaged about 250 million tons. In 2006 and 2007 the average peaked at approximately 260 million tons. Tonnage
diminished sharply in 2008 and 2009, consistent with the
national and global economic slowdown, but has risen just
as sharply in 2010 and 2011 getting back to the two year average of 260 million tons of cargo plus. South Louisiana tonnage is now almost 8 percent higher in 2010-2011 than it
was in the two-year averages at the beginning of the decade.
Swings in the national and global economy will affect tonnage that goes through the Port of South Louisiana, but this
is true at any major port in the country.
The Port of New Orleans has experienced a major increase in TEUs
(twenty feet equivalent units, the
metric for measuring containerized cargo) over the last two years,
as illustrated in Figure 3. The average TEUs for containerized cargo
dropped in the early part of the decade from almost 300,000 in years
2000 and 2001 to approximately
250,000 in years 2002 and 2003.
Hurricane Katrina and its aftermath severely impacted container
cargo in the New Orleans area. The
years 2008/2009 are influenced by
the national/global downturn, but
there was modest growth from the
4
The value of fixed assets in Port Fourchon increased from
just over $37 million in 2000 to over $136 million in 2010,
a phenomenal growth of over 267 percent in ten years. This
growth is consistent with the migration of oil and gas production in the United States to the Gulf of Mexico and the
operations of the Louisiana Offshore Oil Port. This growth
in fixed assets increases the physical capacity of the port and
enhances its ability to handle more oil and gas activities.
Economic Impact of Capital Investment
Ports should invest on a continuous basis just to keep up with
competing ports and to offer their customers the most upto-date transportation options. Capital investments are not
necessarily continuous; indeed, one would expect major investments to fluctuate over time especially from the perspective of one port. For all of the ports it might be that capital
investments will be somewhat continuous—this would sug-
Figure 2. Tons of Cargo Going Through Port of South Louisiana (two year averages)
2000 - 2001
2002 - 2003
2004 - 2005
(Hurricanes Katrina
and Rita)
2006 - 2007
2008 - 2009
(Recession)
2010 - 2011
0
50 million tons
100
150
200
Cargo through Port of South Louisiana
250
300
Two year averages were used since cargo tonnage will vary from year to year.
5 of 16
Economic Impact of Louisiana Ports
ings of $47 million per year. These jobs
and earnings will be concentrated in the
Shreveport-Bossier area.
Figure 3. TEUs at the Port of New Orleans (two year averages)
In 2006 it was estimated, based on interviews with some of the companies located on Port Fourchon, that capital investment by these companies amounted
to almost $50 million in that one year.6
It is also estimated that companies at the
Port of Iberia have invested over $1 billion over the past decade, or on average
$100 million per year. This represent only
two of the over thirty ports in the state.
2000 - 2001
2002 - 2003
2004 - 2005
(Hurricanes Katrina
and Rita)
2006 - 2007
2008 - 2009
(Recession)
2010 - 2011
0
100,000 TEUs
200,000
300,000
Cargo through Port of New Orleans
gest the state would experience a positive economic impact
from port investment each and every year, but each region of
the state will not necessarily experience the same economic
impact every year.
Capital investments can be conducted by the port itself or by
companies that are located on the property of the ports and
make use of the services provided by the ports. A $100 million investment has the following economic impact within
the year: the creation and support of 1,740 jobs with personal earnings of $66.0 million and state and local tax collections of $8.6 million. The $100 million example provides a
framework for analyzing any investment activity by the ports
directly or by companies located on company property.
Private investment by firms located on
port property is an ongoing activity given
400,000
500,000 that the port provides the services the
companies require. It is impossible to
provide an estimate of capital investment
for each year since companies do not make this information
available on a regular basis. The capital spending by the firms
on the property of the ports and the direct investment by the
ports themselves provide the stimulus to the state and local
economy. The $100 million investment benchmark provides
a very cautious sense of the magnitude that capital spending
has on the overall economy.
Economic Impact of Ongoing Port Activities
The economic impact of ongoing port activities is broken
down into three categories: (1) the direct spending by the
ports themselves; (2) the direct spending by companies that
service the ports and the vessels; the companies that are lo-
Table 1. Estimated Economic Impact of a $100 million Capital Investment by Ports
or Companies located on Port Property
$100 million
Capital Investment
Economic
Output
Personal
Earnings
Jobs Created &
Supported
State Tax
Collections
Local Tax
Collections
$228 million
$66 million
1,740
$4.8 million
$3.8 million
It is estimated that the ports directly invested approximately
$130 million in 2010. This direct investment yielded the following economic impact: the creation and support of over
2,250 jobs with personal earnings of $85.5 million and state
and local tax collections of over $11 million.
cated on port property and are especially port-sensitive; and,
(3) the cruise ships. These types of direct spending provide
the initial step in the economic process and it’s this initial
step that ignites the dynamics of the economic enhancement.
Companies located on port properties will also invest in facilities, machines and equipment, property improvements,
and infrastructure investments. From 2006 to 2010 companies at the Caddo-Bossier Port invested $356.4 million with
the peak investment occurring in 2009 with $197.6 million
being invested.5 On average these investments led to over
1,200 jobs being created and supported with personal earn-
As previously mentioned, the first impact of any port on the
local and state economy is the port itself—that is, its direct
spending, both for ongoing operations and for capital improvements. It is estimated that the ports directly spent just
over $194 million in 2011 to complete their responsibilities.7
Economic Impact of Direct Spending by Louisiana Ports
6
Interviews were conducted in 2008.
Direct spending by the ports include their payrolls, spending on ongoing expenses
such as utilities, office supplies, office services, office technology, and so on.
7
5
Based on study completed for Caddo-Bossier Port by Dr. Loren Scott, 2011
6 of 16
Economic Impact of Louisiana Ports
Table 2. Estimated Economic Impact of the Ongoing Operations of the Louisiana Ports
Direct Spending
Economic Output
Personal
Earnings
Jobs Created and
Supported
State Tax
Collections
Local Tax
Collections
Deep Draft
Coastal
Inland
$129 million
$46 million
$19 million
$231 million
$82 million
$33 million
$45 million
$16 million
$6 million
799
283
115
$3.2 million
$1.1 million
$0.5 million
$2.6 million
$0.9 million
$0.4 million
All Ports
$194 million
$346 million
$67 million
1,198
$4.9 million
$3.8 million
These are the initial dollars being pumped into the economy
that creates secondary effects throughout the state’s economy. The ports themselves have just over 600 employees, but
this activity helps create and sustain many more jobs.
Authorities. The cargo estimates are also consistent with the
information used in the study, The Economic Impact of Reduced Dredging of the Mississippi River, for the major ports
along the Mississippi River.9
It is estimated that the direct spending of the ports created
and supported 1,198 jobs in the state’s economy including
the 600 employees that work for the ports.8 The average
wage associated with these jobs is estimated to be approximately $56,000 per year, a total of about $67 million in personal earnings. These jobs and earnings are spread throughout the state’s economy, but the biggest impact is in the water
transportation sector followed by the service industry and
retail trade. The economic activity leads to state and local
tax collections of approximately $8.7 million: approximately
$4.9 million in net new state tax collections and $3.8 million
in total local tax collections.
An estimated value of the cargo is derived from using the
amount in short tons of the top 25 exports and imports and
assigning a value to this based upon the numbers used in The
Economic Impact of Reduced Dredging of the Mississippi River.10 The estimated value of the cargo for the inland ports is
adjusted since these ports do not have the diversity of cargo
the deep draft ports have, so the value of their cargo must
be related to the types of products that are being handled by
the port.
The estimated economic impact of the deep draft ports,
coastal ports, and inland ports is illustrated in Table 2. The
deep draft ports account for approximately 75 percent of the
direct impact of port spending on the Louisiana economy,
while the coastal ports account for approximately 14 percent
and the inland ports for 11 percent.
The next step is to consider the impact of service providers,
providers of other transportation services, and companies
that depend upon the infrastructure supplied by the ports.
Economic Impact of Direct Spending by Providers
of Port and Vessel Services, Other Transportation
Services, and Companies That Are PortSensitive and Located on Port Property
In Louisiana there are many providers of port and vessel services including steamship companies, navigational services,
stevedoring companies, ship supply companies, customs and
other public sector activities, longshoremen, ship repair, marine insurance and legal services, and custom house brokers.
These services are related to the activities taking place at the
various ports. A list of the various ports and the estimated
tonnage being handled by the ports is noted in Table 3. This
is information provided by the ports to the Ports Association of Louisiana and is consistent with information available in such publications as the US Port Ranking by Cargo
Volume, 2008 published by the American Association of Port
8
Economic impact is derived from the Regional Input-Output Model (RIMS II) as
developed by the U.S. Department of Commerce.
An estimated $11.1 billion is directly spent on port and vessel services in Louisiana by firms located in the state due
to their relationship with the ports and by firms located on
port properties.11 This is about 5.0 percent of the value of
the cargo shipped through Louisiana ports during 2010. The
direct spending by the providers of port and vessel services
and businesses directly associated with the ports leads to the
creation and support of just over 68,500 jobs with personal
earnings of just over $3.8 billion, average earnings of just
over $55,600. This activity leads to the collection of $497.8
million in state and local tax collections. This activity would
not exist if it were not for the ports, the activity required for
operations, and the companies located on the ports and their
operations. The economic impact of the direct spending by
providers of services for ports and vessels is shown in Table
4, which highlights the overall economic impact of deep
draft, coastal, and inland ports.
9
Study conducted by Dr. Timothy Ryan, January 2012.
The average value for the cargo was based on the value of the exports and imports
but adjusted downward for some ports since the value of petroleum dominated the
average value of the imports.
11
The $11.1 billion is the summation of an estimated $3.1 billion being spent
by providers of port and vessel services (steamship companies, stevedoring
companies, navigational services, ship supplies, customs and other public sector
activities, longshoremen, ship repair, marine insurance and legal services, custom
house brokers, and others), related to the cargo passing through the ports plus
$7.9 billion being directly spent by companies on port property—these companies
have an estimated 21,800 employees, a payroll (including benefits) of just under $2
billion, and other expenditures of approximately $6 billion including materials. The
estimate of dollars spent on providers of port and vessel services is consistent with
the estimates accepted by Louisiana Economic Development in its consideration of
the export/import tax. The estimate of the dollars spent by firms operating on port
property is based on information from the ports, surveys of the companies, and
employment data regarding each parish and each major industry as reported by the
Louisiana Workforce Commission.
10
7 of 16
Economic Impact of Louisiana Ports
Table 3. Estimate of Volume and Value of Cargo Handled by Louisiana Ports, 2010
Estimated Volume of
Cargo for all Louisiana Ports*
(short tons)
Port Classification
Deep Draft
Coastal
Inland
Total
Estimated Value of
Cargo for all Louisiana Ports
($)
471,223,091
32,990,000
10,193,139
514,406,230
$201.6 billion
$20.1 billion
$2 billion
$223.7 billion
*Based on foreign and domestic trade as reported in U.S. Port Ranking by Cargo Volume, 2008 as published by the American Association of Port Authorities and information supplied to the Ports Association of Louisiana.
in state and local tax collections of approximately $3.7 million—these are
jobs, earnings, and state and local tax
collections in addition to the existing
impact of cruise ships on the Louisiana
economy. Cruise ships are an outcome
of the infrastructure and services provided by the activity of the Port of New
Orleans.
Economic Impact of Cruise Ships
Cruise ships, another port-sensitive business, at the Port of
New Orleans provide an additional layer of economic activity and inducements. The initiation of a cruise in New
Orleans brings new visitors to the city who, in many cases,
spend within the New Orleans region. Cruise ships, based
on 2010 data and illustrated in Table 5, led to the creation of
about 3,228 jobs with personal earnings of over $80 million
for an average salary of roughly $25,000. The activity lends to
net new state tax collections of about $5.9 million and local
tax collections of roughly $4.6 million. These are the esti-
Combined Economic Impact of Ports and Providers of
Port and Vessel Services and Port-sensitive Businesses
The combined economic impact of the ports, providers of
port and vessel services, businesses operating within the
ports, and cruise ship operations are summarized and presented in Table 6. Almost 72,950 jobs are created and supported by the ports and concomitant economic activity,
personal earnings total $3.96 billion, and state and local tax
collections amount to $517 million per year with $289.2
Table 4. Estimated Economic Impact of Firms Providing Services to Ports and Vessels and Firms Located on
Port Property
Direct Spending
Economic Output
Personal
Earnings
Jobs Created &
Supported
State Tax
Collections
Local Tax
Collections
Deep Draft
Coastal
Inland
$5,430 million
$4,758 million
$881 million
$9,730 million
$8,526 million
$1,579 million
$1,871 million
$1,640 million
$304 million
33,615
29,454
5,453
$136 million
$120 million
$22 million
$107 million
$94 million
$17 million
All Ports
$11,069 million
$19,835 million
$3,815 million
68,522
$278 million
$218 million
Table 5. Estimated Economic Impact of the Cruise Ships Services in Louisiana
Cruise Ships
Direct Spending
Economic
Output
Personal
Earnings
Jobs Created &
Supported
State Tax
Collections
Local Tax
Collections
$120 million
$226 million
$81 million
3,228
$5.9 million
$4.6 million
mated economic impacts that are derived from the patrons
of the cruise ships also spending time in New Orleans and
spending a certain amount of cash above and beyond their
cruise ship expenditures.
In 2011 there were 141 cruise ship calls in New Orleans with
736,908 passengers.12 In 2013 the Port of New Orleans projects that, based upon agreements with the cruise lines, that
there will be 196 cruise ship calls with an estimated 1,000,777
passengers embarking and disembarking in New Orleans.
This increase in the number of cruise ships coming to New
Orleans will lead to the support of an additional 1,156 jobs,
additional personal earnings of $28 million, and increases
12
Information from Mr. Robert Jumonville with the Port of New Orleans.
million going to the state government and $227.8 million
going to the various local governments. These are ongoing
economic gains associated with the Louisiana economy and
are sustainable as long as the ports maintain their competitive advantage with other ports around the country and with
other means of transporting goods.
It is very important to note that these are the jobs and personal earnings and overall economic activity that are linked
to the direct spending by the ports, providers of services to
the ports and vessels, businesses operating within the ports
that need the special services offered by the port, as well as
the cruise ships that visit the Port of New Orleans. This direct spending would not occur if the ports (or some substitute for the ports) did not exist.
8 of 16
Economic Impact of Louisiana Ports
Table 6. Economic Impact of Ports, Provider of Services to Ports and Vessels, Port-sensitive Industries,
& Cruise Ships
Direct Spending
Economic Output
Personal
Earnings
Jobs Created &
Supported
State Tax
Collections
Local Tax
Collections
Deep Draft
Coastal
Inland
Cruise Ships
$5,560 million
$4,804 million
$899 million
$120 million
$9,962 million
$8,608 million
$1,612 million
$226 million
$1,916 million
$1,655 million
$310 million
$80 million
34,414
29,737
5,568
3,228
$140 million
$121 million
$23 million
$5.8 million
$110 million
$95 million
$18 million
$4.6 million
All Ports
$11,383 million
$20,408 million
$3,961 million
72,948
$289 million
$228 million
Table 7. Estimated Economic Impact of a 5% Increase in Cargo at Louisiana Ports
All Ports
Direct Spending
Economic
Output
Personal
Earnings
Jobs Created &
Supported
State Tax
Collections
Local Tax
Collections
$155 million
$277 million
$53 million
959
$3.8 million
$3 million
It is also important to note that deep draft ports are dominant in terms of cargo, as illustrated in Table 3. The deep
draft ports move over 90 percent of the cargo through Louisiana ports. In terms of economic impact as measured by
the direct spending, the deep draft ports account for almost
50 percent of the impact, the coastal ports just over 40 percent of the economic impact, and the inland ports around 8
percent of the economic impact. The cruise ships constitute
about 1.1 percent of the economic impact. In terms of direct and indirect jobs linked to this direct spending, the deep
draft ports account for about 47 percent of the jobs created
and supported, the coastal ports for about 41 percent; the
inland ports for about 7.7 percent; and, the cruise ships for
about 4.4 percent.
The economic impact of the deep draft ports is related to the
cargo transferred at these ports and the companies located
on their property; the economic impact of the coastal ports
is related to the companies on their properties and the types
of activities associated with these companies with emphasis
on oil and gas and manufacturing with respect to machines
and fabricated metals; and, the economic impact of the inland ports is related to the companies located on port property.
Incremental Change in Tonnage and Impact on Economy
The previous analysis details the economic impact of Louisiana ports on the Louisiana economy given their current
cargo movements, business enterprises, cruise ships, and
other related activities. To broaden the analysis, we examine what would be expected to occur if there is a 5 percent
increase in cargo going through the ports, approximately 26
million tons.13 A five percent increase is feasible. The Port
of South Louisiana alone increased its cargo by 27.8 million
tons from 2010 to 2011. The estimated economic impact on
the overall Louisiana economy is shown in Table 7. The proposed increase in cargo would lead to a direct increase in
13
We assume that the proportion of cargo exported / imported remains similar to
historical proportions.
spending of approximately $155 million. This leads to the
creation of almost 1,000 jobs with personal earnings of over
$53 million and state and local tax collections of almost $7
million. The 5 percent increase in cargo going through Louisiana ports leads to a 1.6 percent increase in employment
related to Louisiana ports. These estimates do not include
any induced activity such as firms relocating to the ports because of the increasing cargo activity. It is also neutral on
where this cargo is being produced; if the production were
to occur in the state, then the impacts would be even greater.
Economic dynamics are always difficult to project so our estimates are relatively cautious.
Economic Impact of Users of Ports
P
orts have an economic impact on the state associated
simply with the presence of a port in a community, the required service delivery by the ports and the vessels, the presence of port-sensitive businesses, and the cruise ships. The
ports also provide support to transportation sensitive industries in the Louisiana economy. In fact, in Louisiana the
ports are extremely connected to the major industries that
are critical to the Louisiana economy
Figure 4 shows the distribution of employment in the Regional Labor Market Areas of the state (RLMAs) as well as
how the employment in each RLMA is distributed among
various economic sectors. Approximately 50 percent of all
employment is concentrated in the New Orleans and Baton
Rouge regions. Just over 75 percent of all employment in the
state is scattered along the Interstate 10/12 corridor, starting with the Northshore, including the New Orleans area,
and then ending in the Lake Charles region. Central Louisiana and north Louisiana account for about 25 percent of the
state’s employment.
The one common feature in all regions of the state is that
the service sector dominates employment; this is a welldocumented national trend. In fact, many of the services
9 of 16
Economic Impact of Louisiana Ports
described as providers of port and vessel services, such as
legal and financial services, will be classified under this category. Although service employment is a component of portrelated activity, the primary sectors connected to the ports
are agriculture, mining, and manufacturing sectors of the
economy. These sectors market their products throughout
the globe. In Louisiana these sectors may not be the highest employment centers, but they provide a large part of the
export market.
the value of shipments. Nearly 90 percent of the manufacturing value added throughout the state is accounted for by six
commodities: paper, wood, food, fabricated metals, petroleum and coal, and chemicals.
The economic impact of these manufacturing industries,
agriculture, and oil and gas is presented in Table 8. These
industries create and support close to 400,000 jobs in Louisiana with about $19.5 billions in personal earnings. These
industries support approximately 20 percent of all the jobs
in the state, directly and indirectly. The industries are sensitive to transportation options since they must market their
products throughout the world and must import materials
from around the world. Effective transportation options are
important elements in the long-term sustainability of related
industries in any state.
A further examination of the industrial sector in each region is illustrated in the Figure 5. As noted, the sectors especially important to the exporting of Louisiana goods are
agriculture, mining, and manufacturing. The transportation
and warehousing sector is also an important sector for its
accommodation of transportation services within the state.
We can see that the agricultural economy is spread across
Important Louisiana industries need transportation opthe state, as illustrated in Figure 5, but it is less prominent
tions to move their goods around the country and around
in the large metropolitan markets
Monroe Region
of Baton Rouge and New Orleans. Figure 4. Regional Employment
5.81%
Mining and manufacturing are more
Share of total
concentrated in the parishes along
Shreveportstatewide employment
the coast and the Mississippi River.
Bossier Region
within
region
Lafayette and Houma-Thibodaux
12.56%
New Orleans
have large mining sectors compared
Region
Alexandria
27.79%
to other regions of the state. Overall
Region
5.74%
manufacturing is strongest in New
Orleans, Lafayette, and Baton Rouge
Houmaregions.
Agricultural exports produced in
Louisiana are illustrated in Figure
6. Rice, soybean, cotton, and other
grains are major exports. Soybeans
and cotton are grown primarily in
the northern part of the state, while
rice is grown in the southwestern
and south central regions of the state
as well as in the northern part of the
state. These are major crops in the
state and require transportation options.
The major export and import commodities of the state are presented in
Figure 7. Agriculture, oil, and chemicals dominate, which is consistent
with the overall structure of the Louisiana economy. The exports that use
Louisiana ports are representative of
the industries that presently serve as
the foundation of the state’s economy.
This is further illustrated in Figure
8, which presents the breakdown of
manufacturing commodities based
upon value added, material cost, and
Baton Rouge
Region
22.03%
Lafayette
Region
14.22%
Thibodaux
Region
5.19%
Lake Charles
Region
6.03%
Employment in region by sector
NEW ORLEANS
BATON ROUGE
HOUMA-THIBODAUX
LAKE CHARLES
LAFAYETTE
Agriculture, forestry, fishing and hunting
MONROE
Mining
Utilities
Services
Construction
Finance and insurance
Real estate and rental and leasing
Manufacturing
Professional and technical services
Management of companies and enterprises
Administrative and waste services
Wholesale trade
SHREVEPORT-BOSSIER
Educational services
Health care and social assistance
Retail trade
Arts, entertainment, and recreation
Accommodation and food services
Other services, except public administration
Public administration
Transportation and warehousing
ALEXANDRIA
Unclassified establishments
10 of 16
Economic Impact of Louisiana Ports
the globe. Ports provide one of the most effective options.
In doing so, ports directly create just under 73,000 jobs in
the state; they support another approximately 400,000 jobs
by offering transportation options to critical industries in
the state, including agriculture, oil and gas, food and related products, wood and related products, paper and related
products, petroleum and coal products, chemicals and related products, and fabricated metals. Louisiana ports create or
support almost 475,000 jobs in the state, about 25 percent of
all the jobs in Louisiana. None of these impacts include general consumers, who are able to purchase products produced
in other states of the nation or other countries in the world.
Transportation options offer industries in the state the ability
to be more competitive and consumers in the state the opportunity to purchase products more competitively.
If the ports (or some reasonable facsimile to the ports) did
not exist, then the just under 73,000 jobs would simply disappear. The approximately 400,000 jobs connected to major
industries in the state (agriculture, mining, manufacturing,
and transportation and warehousing) would not necessarily
all disappear if the ports did not exist, but their existence in
Louisiana would be more probable. That is, these industries are in a competitive battle with similar industries across
the nation and globe. Any competitive advantage, such as
more cost-effective transportation options, creates a better
incentive structure for these base businesses to be active in
Louisiana.
The 73,000 jobs represent approximately 4 percent of the
total employment in Louisiana. If these 73,000 jobs disappeared because the ports did not exist, and if only 10 percent
of the jobs in agriculture, mining, manufacturing, and transportation and warehousing (or approximately 40,000 jobs)
disappeared because of the lack of ports, then over 6 percent
of the Louisiana employment would be eliminated.
Ports are an economic intermediary between producers and
consumers. From the perspective within the state, ports
support the state’s industrial structure and especially those
industries that are transportation-sensitive. The ports are
an essential player in the state’s overall economic structure;
Figure 6. Estimated Value of Louisiana Agricultural Exports, 2006 - 2010
$1 billion
Other*
Seeds
Feeds
800
Cotton
600
Soybeans
400
Feed Grains
Rice
$200 million
Wheat
2006
2010
Source: U.S. Department of Agriculture, Economic Research Service
Other includes commodities valued less than $10 million annually, including fruits, live animals, hides, fats,
cottonseed, poultry and tree nuts
11 of 16
Economic Impact of Louisiana Ports
Figure 7. Export and Import Commodities using Louisiana Ports, 2010
Export Commodities in Louisiana, 2010
Louisiana exported over $41 billion of commodities to countries worldwide, accounting for 3.2% of all US exports in 2010. Of those
statewide exports, the most prominent commodities are soybeans, non-crude oil, and corn (maize), which together constitute over
half of all exports. The top 25 export commodities, listed below, account for 77% of the value of all Louisiana exports, over $32
billion.
Soybeans
Oil (not crude)
Corn (maize)
Soybean oilcake & oth solid residue
Light oils & prep (not crude)
Soybean oil & fractions, crude
Wheat (other than durum wheat), and meslin
Bituminous coal
Oils & products
Rice in the husk
Petroleum coke, not calcined
Petroleum coke, calcined
Polymers of ethylene nesoi
Brewing or distilling dregs and waste
Ethylene-propylene-nonconjugated diene rubber
Styrene
Parts for boring or sinking machinery
Polyvinyl chloride
Rice, semi- or wholly milled
Residues of starch
Amino-resins
Motor vehicle transport goods
Polyethylene
Xylenes
Civilian aircraft, engines, and parts
8,807
8,176
4,976
1,262
1,132
1,065
721
617
561
441
433
429
384
381
357
307
293
292
283
275
219
208
194
187
182
21.1%
19.6%
11.9%
3.0%
2.7%
2.5%
1.7%
1.5%
1.3%
1.1%
1.0%
1.0%
0.9%
0.9%
0.9%
0.7%
0.7%
0.7%
0.7%
0.7%
0.5%
0.5%
0.5%
0.4%
0.4%
Commodities
not in Top 25
Exports
Import Commodities in Louisiana, 2010
Louisiana imported $60.9 billion of commodities from countries worldwide. This accounted for over 4% of the total US imports in 2010.
Oil is by far the largest import accounting for nearly 83% of all statewide imports (both crude and non-crude). The top 25 import
commodities, listed below, account for 91.5% of the value of all Louisiana imports, over $55 billion.
Crude oil
44,030
Oil (not crude)
6,448
Light oils and prep
859
Coffee
678
LNG
400
Technically specified natural rubber 377
Palm oil
344
Anhydrous ammonia
342
Methanol
337
Nonalloy pig iron
282
Benzene
207
Urea
173
Coconut (copra) oil
168
Taps cocks etc
111
Potassium chloride
101
Propene (propylene)
98
Acyclic hydrocarbons
94
Boring or sinking mach nesoi
91
Unwrought aluminum alloys
86
Cotton t-shirts, etc
82
Parts for boring or sinking machinery 79
Unwrought aluminum
76
Refined copper cathodes
76
Helicopters
69
Titanium ores and concentrates
69
72.36%
10.60%
1.41%
1.11%
0.66%
0.62%
0.57%
0.56%
0.55%
0.46%
0.34%
0.28%
0.28%
0.18%
0.17%
0.16%
0.15%
0.15%
0.14%
0.13%
0.13%
0.12%
0.12%
0.11%
0.11%
Commodities
not in Top 25
12 of 16
Economic Impact of Louisiana Ports
Figure 8. Commodities as a Percentage of All Manufacturing in Louisiana
Value Added
Commodity
Food
Wood
Paper
Petroleum, Coal
Chemical & Related Products
Fabricated Metals
Other manufacturing
Material Cost
Value of Shipments
Value Added
Material Cost
Value of Shipments
4.8%
1.0%
4.6%
38.3%
34.9%
4.8%
11.7%
2.8%
1.0%
2.0%
59.0%
27.1%
1.7%
6.4%
3.4%
1.0%
2.3%
52.9%
29.5%
2.5%
8.4%
Table 8. Estimated Economic Impact of the Industries Connected to Global and National Trade (dollars in millions)
Direct Spending Economic Output
Agriculture
Oil and Gas
Food Manufacturing
Wood Products
Paper Products
Petroleum, Coal and related products
Chemicals and related products
Fabricated Metals
Total
$1,059
$10,284
$4,630
$1,756
$3,482
$21,980
$10,485
$3,521
$57,200
$2,305.4
$17,197.9
$9,845.7
$4,161.5
$7,026.3
$36,517.6
$24,448.9
$6,848.3
$108,351.8
the most prominent cargo shipped through Louisiana ports
correlate strongly with the important industries of the state.
But the impact of ports is not limited to the confines of state
boundaries. In the next section we will discuss how out-ofstate users of Louisiana ports impact the local, regional and
state economies.
Economic Impact of Out-of-State
Users of Louisiana Ports
P
orts are an important economic connection between
producers and consumers. Ports are also, however, another
business in the state that can grow by attracting cargo exported and imported by other states. In short, ports can enhance their impact on the Louisiana economy by providing
more services to cargo being produced in other states or being sent to other states.
Just as an example, agricultural exports produced in Louisiana, as noted in Figure 6, amounted to just under $1 billion
Personal
Earnings
$497.3
$3,355.6
$1,811.3
$983.7
$1,368.1
$5,600.5
$4,144.7
$1,752.0
$19,513.3
Local
State
Jobs Created &
Tax Collections Tax Collections
Supported
17,285
58,222
50,487
27,943
29,760
94,508
77,695
40,398
396,297
$36.3
$245.0
$132.2
$71.8
$99.9
$408.8
$302.6
$127.9
$1,424.5
$28.6
$193.0
$104.1
$56.6
$78.7
$322.0
$238.3
$100.7
$1,122.0
in 2010. In 2010, the value of soybeans transported through
Louisiana ports amounted to almost $9 billion. Quite obviously, Louisiana ports service the United States, but, in doing
so, they create an enhanced economic climate in Louisiana.
We should be aware of the economic opportunities associated with the out-of-state cargo that moves through the Louisiana ports.
These opportunities are illustrated for exports from selected
states in Figure 9 and for imports from selected states in Figure 10. The focus of the graphics is to compare states of a
similar functional status as Louisiana – that is, we consider
states along the Mississippi River as well as states along the
Gulf Coast. Our comparison includes the following states:
Alabama, Arkansas, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, South Carolina, Tennessee, and Texas.
Of these states, Louisiana ranks third in terms of exports
originating within the state, which is about 9.5 percent of the
overall $571 billion in exports originating in these thirteen
states. Texas is by far the largest exporter followed by Illinois.
13 of 16
Economic Impact of Louisiana Ports
Figure 9.
Exports of selected states | 2008-2011 | measured in commodity value
Arkansas
Mississippi
Kansas
Missouri
Alabama
Kentucky
Share of Export
Value, by state
Change in Exports, measured by commodity value, from 2008 levels (2009-2011)
0.5
0.4
South Carolina
Texas
AR
MS
KS
MO
AL
KY
SC
TN
IN
GA
LA
IL
TX
0.3
0.2
Tennessee
0.1
0.0
Indiana
-0.1
-0.2
Georgia
-0.3
Since 2008, exports in the selected states are up by about 24%. In Louisiana, exports are
over 31%, the most among states with strong export activity (Mississippi, with less than 20%
of the exports of Louisiana, has seen a 50% jump in exports since 2008).
Louisiana
Illinois
Among the thirteen states selected, Louisiana ranks third in
terms of the value of exports originating in state ports,
accounting for about 9.5 percent of the $571 billion in exports.
In 2011, the thirteen states in this analysis exported over $571 billion in goods. Six commodity classes account for nearly 75% of the value of exports:
Chemicals (17%), Transportation Equipment (14%), Petroleum and Coal Products (14%), Non-electronic Machinery (12%), Computer and
Electronics (11%), and Agricultural Products (6%) .
Other
Distribution of Louisiana
Exports based upon Value
Export Value by
Commodity Class
Textiles & Fabrics
Minerals & Ores
Oil & Gas
Waste And Scrap
Plastics & Rubber Products
Paper
Miscellaneous Manufacturing
Fabricated Metal Products
In 2011, Lousiana exported $55 billion in
goods. Most of this value was in
Petroleum and Coal Products (34%),
Chemicals (15%)
and Agricultural Products (31%).
Chemicals
Primary Metal Mfg
Electrical Equipment
Transportation
Equipment
Food Products
Agricultural
Products
Agricultural Products
Petroleum &
Coal Products
Petroleum &
Coal Products
Computer & Electronics
Other
Non-electronic
Machinery
Chemicals
“Other” includes those commodities that constitute less than one percent of the export values: Nonmetallic Mineral Products, Beverages &
Returned
Major Exports and Statewide Shares of Total Value
Of the 6 top export commodities (in terms of export value), Louisiana has a prominent role in three: Petroleum and Coal (24% of the total exports),
Chemicals (8%) and over half of the value of all Agricultural Products. The state does not have a strong presence in machinery and electronics.
Export of Agricultural
Products
Export of
Petroleum and Coal
MS
LA
0
IL
TX
20
40
Export of
60
KS
TN GA
80
TX
100%
0
20
Computer & Electronics
LA
40
Export of
60
MS
80
100%
Transportation Equipment
SC
KY
TX
0
20
IL
40
Export of
TN
60
MS
LA
TX
GA IN
100
0
GA
IN
TX
80
20
Chemicals
Export of
IL
KY
SC
40
AL
60
Non-electronic Machinery
0
20
IL
40
LA
60
IN
TN
KY GA SC
80
TX
100
0
20
IL
40
GA
60
IN
100
LA
KS
AL
MO
AL
MO
TX
MO KS
TN
80
SC
80
TN KY
100
14 of 16
Economic Impact of Louisiana Ports
Figure 10.
Imports of selected states | 2008-2011 | measured in commodity value
Arkansas
Kansas
Missouri
Alabama
Mississippi
Kentucky
Share of Import
Value, by state
Texas
Change in Imports, measured by commodity value, from 2008 levels (2009-2011)
50%
40
South Carolina
TX
IL
LA
GA
TN
IN
SC
KY
MS
AL
MO
KS
AR
30
20
Indiana
10
0
Tennessee
-10
-20
Georgia
-30
-40
-50%
Louisiana
Illinois
Among the thirteen states selected, Louisiana ranks third in
terms of the value of imports coming through state ports,
accounting for about 10 percent of the $821 billion in imports.
The recession impacted imports substantially, causing a decline in the value of imports for all states
selected for this analysis. In Louisiana, the value of imports declined by 50 percent from 2007 to 2008.
Moreover, Louisiana is one of two states (Kansas) that has not recovered to pre-recession levels in import
value.
In 2011, the thirteen states in this analysis imported over $821 billion in goods. Six commodity classes account for over 60% of the value of imports: Oil
and Gas (27%), Computer & Electonics (16%), Transportation Equipment (9%) and Chemicals (9%), Non-electronic machinery (7%), and Petroleum &
Coal Products (5%). .
Import Value by
Food Products
The state of Lousiana imported $82
Distribution of Louisiana
Commodity Class
Plastics & Rubber Products
billion in goods in 2011. The
Goods Returned
Imports based upon Value
overwhelming majority of these
imports were
Apparel & Accessories
Miscellaneous Mfg
Fabricated Metal Products
Oil and Gas (71%)
and Petroleum and Coal
Products (15%).
Chemicals
Primary Metal Mfg
Petroleum &
Coal Products
Petroleum &
Coal Products
Other
Oil & Gas
Electrical Equip.
Non-electronic
Machinery
Computer &
Electronics
Other
Chemicals
Oil & Gas
Transportation Equipment
“Other” includes those commodities that constitute less than one percent of the import values: Leather & Allied Products, Furniture & Fixtures,
Nonmetallic Mineral Products, Paper, Agricultural Products, Textile Mill Products, Beverages & Tobacco Products, Forestry Products, Wood
Major Imports and Statewide Shares of Total Value
Of the 4 key import commodities (in terms of import value), Louisiana has a prominent role in the import of Oil and Gas (accounting for 27% of the
import value, second to Texas, which imports over 50% of the value of Oil and Gas), but ranks last in the import of Computer & Electronics (a
0.19% share of the import value) and in Transportation Equipment (a 0.53% share) and ranks 8th in the import of Chemicals (a 3.53% share).
Import of
Oil and Gas
20
40
60
Import of
MS
80
0
KY
Transportation Equipment
GA
20
40
Import of
MO
GA
TN
TX
100%
Chemicals
IN
TX
IL
IL
LA
TX
0
Import of
IL
SC
KY
60
TN
AL
80
100%
Computer & Electronics*
TX
SC LA
IN
LA
IL
SC
TN
KY
GA IN
KS
0
20
40
Import of
TX
0
80
100%
SC
GA
40
60
TN
0
20
AR
KS
LA
MS
MO
Non-electronic Machinery
IL
20
60
IN
80
40
Import of
60
80
*LA < 0.2%100%
Petroleum & Coal Products
SC
100%
0
20
GA
LA
TX
KY AL
40
60
80
100%
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Economic Impact of Louisiana Ports
In terms of products exported among these thirteen states,
the top six commodities are chemicals, transportation
equipment, petroleum and coal products, non-electronic machinery, computer and electronics, and agricultural
products. The major exports in Louisiana were petroleum
and coal products (34 percent), agricultural products (31
percent), and chemicals (15 percent). These three categories
of products made up 80 percent of the value of all exports
originating in Louisiana. Louisiana is the largest exporter of
agricultural products; the second largest exporter of petroleum and coal products (with Texas being the largest); and
the third largest exporter of chemicals and related products
(behind Texas and Illinois). Louisiana is also the third largest
importer of goods among these thirteen states. Again, Texas
and Illinois are larger importers of goods than Louisiana.
The six largest commodity classes are oil and gas, computer
and electronics, transportation equipment, chemicals, nonelectronic machinery, and petroleum and coal products. The
three largest commodity classes imported into Louisiana are
oil and gas, petroleum and coal products, and chemicals.
Louisiana is ranked second among the thirteen states for the
importing of oil and gas with Texas being the largest state
importer. Louisiana is ninth of the thirteen states in terms of
importing chemicals.
The first lesson to be learned from these data is that Louisiana’s ports export agricultural products, petroleum and coal
products, and chemical and related products and imports
oil and gas, petroleum and coal products, and chemicals
and related products in terms of value. The second lesson
is that almost $600 billion of goods (equivalent to over an
estimated 1.2 billion tons) are exported from and over $820
billion of goods (equivalent to an estimated 1.6 billion tons)
are imported to these thirteen states. This is a relevant market for Louisiana ports. The third lesson is that Louisiana has
a niche in agricultural products, oil and gas, petroleum and
coal products, and chemical and related products, but there
are many other opportunities. Part of Louisiana long-term
economic development strategy will be related to ports developing new business partners.
Summary Remarks
L
ouisiana ports are located throughout the state from
the deep draft ports along the Mississippi River and the
one deep draft port on the Calcasieu River to the ports
along the coast of the state supporting the offshore oil and
industry and the commercial fishing industry to the inland
ports providing specific service to the communities in
which they are located. Over the last ten years these ports
have grown in terms of net assets by almost $600 million or
approximately 33 percent. The net income of all the ports
has grown by 76 percent. The ports have grown in terms of
their assets and in terms of their ability to generate income.
The ports are also a point of connection between producers
of products in the state and buyers of products throughout
the country and the world and between goods made in other
parts of the nation and the world and used in Louisiana for
further development or for final consumption. The economic impact of ports focuses on the direct purchases made by
the ports themselves plus the direct spending in Louisiana
by the providers of services to Louisiana ports and vessels/
barges, other types of transportation alternatives, and other
businesses located on port property that are especially sensitive to the waterways. These are significant spending inputs
into the state’s economy that create a new wave of spending among businesses and individuals that were recipients
of the initial spending by the ports, the providers of services
to Louisiana ports and vessels/barges, and other port-sensitive businesses. This economic activity is present in Louisiana because of the presence of the ports in the state and the
transportation options that they provide businesses within
Louisiana and businesses in other states that need national
or global markets.
The combined economic impact of the ports, providers of
port and vessel services, businesses operating within the
ports, and cruise ship operations are (1) almost 73,000 jobs
created and supported, (2) personal earnings amount to
$3.961 billion, and (3) state and local tax collections amount
to $517 million per year with approximately $289 million
going to the state government and $228 million going to
the various local governments. These are ongoing economic
gains associated with the Louisiana economy and are sustainable as long as the ports maintain their competitive advantage with other ports around the country and with other
means of transporting goods. Port activity creates and supports directly about 4 percent of the jobs in the state.
The port’s connection to other industries in the state as providing transportation options is even more substantial in
terms of impact. Certain industries rely on the ports to assist
in moving their goods. These industries are the agricultural
sector, oil and gas, petrochemical and coal products, chemicals and related products, food and related products, paper,
wood, and fabricated metals. These industries create and
support almost 400,000 jobs and personal earnings of close
to $20 billion. The Louisiana port structure is an important
anchor in the support of these fundamental industries in the
Louisiana economy. These industries require transportation
options—a connection with their markets. The ports provide
that transportation connection.
Finally, ports provide a connection for industries within the
state, but they are also direct contributors to the state’s economy when they can increase cargo being shipped through
Louisiana ports and this cargo originates in another state.
Louisiana ports are from this perspective a business providing even more direct spending in the Louisiana economy.
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