A new study released on Tuesday by the Ports of Indiana reports that
waterborne shipping along Indiana’s Lake Michigan shoreline contributes $14
billion per year in economic activity to the state economy and more than
104,000 jobs.
The study—conducted by Martin Associates, one of the foremost maritime
economic consulting firms in the country, and peer reviewed by economics
professors from Indiana University, University of Notre Dame and Purdue
University—focused on 2008 and 2009 data. Those data 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.
•$14.2 billion of economic activity in the state.
•$6 billion of total personal income.
•$2.1 billion of local purchases.
•$567 million 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 Port 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.”
U.S. Army Corps of Engineers data used in the study indicate that 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 14th 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.”
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