Shipping Boosts Indiana Lakeshore Economy by $14B

A new study released by the Ports of Indiana reports that waterborne shipping along Indiana’s Lake Michigan shoreline contributes $14b per year in economic activity to the state economy and more than 104,000 jobs.

The study was conducted by Martin Associates, one of the foremost maritime economic consulting firms in the country, and was peer reviewed by economics professors from Indiana University, University of Notre Dame and Purdue University. The study focused on 2008 and 2009 data, which reflected a significant economic downturn, suggesting that the results are conservative estimates for average annual impacts. According to the study, waterborne shipping to and from Indiana’s lakeshore region by both ships and barges generated the following annual economic impacts:
•    104,567 direct, induced, indirect and related jobs;
•    $14.2b of economic activity in the state;
•    $6b of total personal income;
•    $2.1b of local purchases; and
•    $567m of state and local tax revenue.

“The Indiana lakeshore is unique because three separate modes of waterborne commerce converge here carrying international and domestic cargoes to and from the region,” said Dr. John Martin, President of Martin Associates. “The region depends on ocean vessels, lake carriers and river barges to bring in raw materials and ship out finished products. The Ports of Indiana, the steel mills and all the other local industries that depend on waterborne shipping are located on Lake Michigan because of the unique transportation advantages. If these low-cost modes of transportation were not available, local industries would lose their competitive advantage in the marketplace, which could potentially result in partial or full plant closures.”

According to U.S. Army Corps of Engineers data used in the study, Indiana’s lakeshore terminals handled 32 million tons of maritime shipments in 2008 (the most recent total available). An additional 42.7 million tons of Indiana business was shipped on the Ohio River, but those shipments were not included in this study. Indiana ranked 14 among all states with 72.7 million tons of waterborne shipments in 2008 and was one of only five states to show an increase in shipments over the previous year.

“Our Midwest location often causes people to forget just how important waterborne shipping is to our economy,” said Rich Cooper, CEO for the Ports of Indiana. “Indiana is not landlocked by any means. We have direct access to the Atlantic Ocean through the Great Lakes and to the Gulf of Mexico through our inland river system. We conduct regular economic impact studies of our port facilities but this is the first time anyone has examined the combined impacts from all of Indiana’s businesses along Lake Michigan. Those businesses include some of the largest steel producers in the world. This study not only shows the importance of maritime activities and their related jobs, but it also allows us to assess impacts of future developments, changing tonnage levels, new cargo services and potential grant opportunities.”

Part of the study identified economic impacts related to Indiana barge shipments through the T.J. O’Brien Lock & Dam in the Chicago Sanitary & Ship Canal, but it should be noted that Indiana accounted for less than 30 percent of the total shipments moving through the lock in 2008. The study found that Indiana’s barge shipments created 17,655 total jobs and generated $1.9 billion in economic activity for Northwest Indiana in 2008.

“It’s important to understand that businesses in this region rely on a balance of ships, barges, trucks and rail to transport goods to and from specific markets,” Cooper said. “It can be cheaper to send something to the Gulf of Mexico by barge than to a neighboring state by truck or rail. Any disruption to one of those modes means increased transportation costs will be passed down to consumers for things like food items made from grain, household goods made from steel and energy derived from coal and oil. But for many Indiana lakeshore businesses, waterborne shipping is the only cost-effective connection they have to major customers and suppliers. Without that connection, our economy could lose much more than just the portion of their business that is dependent on the water.”

The full study is available at the port’s website (www.portsofindiana.com).