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Port Sector Provides 8.4 Million American Jobs, $2 Trillion in Economic Output

Last year, United States deep draft seaports and seaport-related businesses generated approximately 8.4 million American jobs and added nearly $2 trillion to the economy, according to a study by Martin Associates, a Lancaster, Pennsylvania-based business consulting service that specializes in port sector economic impact studies.
The report was completed in late September, 2007.

Martin Associates used 2006 U.S. port cargo statistics and thousands of recent port sector interviews for an in-depth study of the economic impacts 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 seven million were employed by companies involved in handling imports and exports, such as retailers, wholesalers, manufacturers, distributors and logistics companies.

In addition to citing employment numbers, the study 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. Moreover, the 2006 report 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.

“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,” said Dr. John C. Martin, president of Martin Associates, “This new report shows that port-related activities are contributing to the economy in record numbers.”

Dr. Martin holds a doctorate in economics from George Washington University and has performed more than 300 individual economic impact analyses and port strategic and master plans for ports throughout the country in his 30 years in business.

Looking specifically at employment in the nation’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, for example: jobs with suppliers of parts and equipment; companies providing maintenance and repair services to the businesses dependent on port operations; utilities providing services to marine terminals; and office supply firms.

“One thing that isn’t obvious in the new report is that port sector jobs tend to pay above-average wages, which is important to ensuring America remain a strong economic force in the global community,” said Dr. Martin. In his 2006 report, he found that the number of direct, induced and indirect jobs from business activities at our nation’s ports stood at 1,444,650, and the earnings and consumption dollars from those jobs came to $107.1 billion. Overall, he said 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 that Martin Associates has developed for the majority of the nation’s seaports. These models are based on interviews with more than 10,000 port tenants, maritime service providers, truckers, 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 40 ports, Martin Associates was 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 significant financial benefits of cruise operations at U.S. ports or the economic impacts of inland, shallow-draft ports and the shipping activity they generated.

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