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Ports and the Economy Presentation for Management Seminar Unisantos, Brazil by Dr. Veronica Z. Kalich Associate Professor – Economics Baldwin-Wallace College.

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Presentation on theme: "Ports and the Economy Presentation for Management Seminar Unisantos, Brazil by Dr. Veronica Z. Kalich Associate Professor – Economics Baldwin-Wallace College."— Presentation transcript:

1 Ports and the Economy Presentation for Management Seminar Unisantos, Brazil by Dr. Veronica Z. Kalich Associate Professor – Economics Baldwin-Wallace College May 2005

2 Global Patterns of US Merchandise Trade - Balance 2004 Balance of TOTAL in thousands $USD

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4 ProductValue ($) 84--NUCLEAR REACTORS, BOILERS, MACHINERY ETC.; PARTS -51,617,584, ELECTRIC MACHINERY ETC; SOUND EQUIP; TV EQUIP; PTS -60,145,224, VEHICLES, EXCEPT RAILWAY OR TRAMWAY, AND PARTS ETC -117,940,556, MINERAL FUEL, OIL ETC.; BITUMIN SUBST; MINERAL WAX -186,969,413,088 All Others-235,062,130,263 Grand Total-651,734,908,409 U.S. Merchandise Trade Balance With the World in 2004 by Specific Products

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7 U.S. Trade Deficit and the Trade Weighted Index of the U.S. Dollar (1973 = 100)

8 U.S. Trade Deficit and Change in Currency Valuation ( )

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11 Balance of Trade with Brazil

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13 Ohio Exports to Brazil ProductValue ($)Percent Transportation Equipment 215,174, % Chemical Manufactures 84,831, % Machinery Manufactures 73,735,72515 % Fabricated Metal Products 26,276, % All Others90,815, % Grand Total490,832, %

14 ProductValue ($) 84--NUCLEAR REACTORS, BOILERS, MACHINERY ETC.; PARTS 1,577,239, MINERAL FUEL, OIL ETC.; BITUMIN SUBST; MINERAL WAX -1,269,218, WOOD AND ARTICLES OF WOOD; WOOD CHARCOAL -1,538,002, IRON AND STEEL-2,256,409,615 All Others-3,807,921,775 Grand Total -7,294,313,027 U.S. Trade Balance with Brazil

15 Virginia Port Authority, VA Wood pulp Loading Alabama State Docks Mobile, AL Florida Dept. of Commerce Salt transferred at Port Newark/Elizabeth, NJ Hanjin Shipping Terminal Port of Long Beach, CA Black Falcon Cruise Terminal Boston, MA Ports as Gateways to Global Trade Military Cargo Port of Tacoma, WA

16 Economic Impact of Ports Port Industry accounts for 4 million jobs Port-related jobs generate $44 billion in Personal Income, annually Port-related incomes supply federal and local government $16.1 billion in total tax revenues Port activity accounts for $723 billion annually to GDP Source 1

17 Selected World Port Ranking Total Cargo Volume 2003 RankPortCountryTons* 1Singapore 347,694 FT 2RotterdamNetherlands326,958 MT 4Hong KongChina207,612 MT 5South LouisianaUnited States180,493 MT 6HoustonUnited States173,320 MT 18New York/New JerseyUnited States132,438 MT 36TubaraoBrazil77,621 MT 42ItaquiBrazil67,591 MT 46Long BeachUnited States62,816 MT 47SantosBrazil60,077 MT ~ * MT = Metric Ton FT = Freight Ton

18 Role of Ports in Economic Development Ports are a major determinant of industrial plant location Waterfront sites provide low-cost transportation of finished goods and raw materials Continued U.S. economic growth will fuel demand for imports Port capacity is not expected to keep up with the growing activity –Underinvestment in port and intermodal infrastructure

19 Waterborne commerce is the greenest form of transportation. Typical season, ships use 9.6 million gallons of fuel to deliver roughly 8 million tons of iron ore to Lorain Were that trade to switch to trains, locomotives would burn more than 14 million gallons of fuel and their emissions would double that of ships Ships burn less fuel and produce fewer emissions than trains or trucks Ships Benefit Ohio's Environment

20 Port Congestion – Infrastructure Problem Ports cant expand (ie. California) –Infrastructure costs are beyond the states fiscal capacity/resources –Anti-expansion sentiments Ports come with traffic problems and pollution Rising Fuel costs affect truckers hauling loads –waiting isnt worthwhile Few legislative responses –Focus is more on increased security –Use of alternative deep-water ports

21 U.S. Waterborne Foreign Trade Top 10 Trading Partners Containerized Cargo 2004 *Twenty-Foot Equivalent Units Source 3

22 Top 10 U.S. Ports Ranked by Value of Cargo Foreign Trade ( $Mils.U.S.) RankPortExportsImportsTotal Foreign Trade 1Los Angeles (CA)$16,865$105,186$122,050 2New York/NJ$24,303$ 76,873$101,176 3Long Beach(CA)$16,865$ 78,700$ 95,863 4Houston (TX)$21,439$ 28,454$ 49,893 5Charleston (SC)$13,375$ 26,000$ 39,375 6Hampton Rds(VA)$12,248$ 20,687$ 32,935 7Tacoma (WA)$ 5,203$ 21,129$ 26,332 8Baltimore (MD)$ 5,686$ 20,270$ 25,956 9Oakland (CA)$ 7,762$ 17,381$ 25,144 10Seattle (WA)$ 5,687$ 17,389$ 23,077 Source 2

23 Port and Intermodal Chokepoints Problem Spots

24 Forecast Underinvestment in port and intermodal infrastructure –By 2020, its predicted that the U.S. transportation system will handle cargo valued at more than $28 trillion Continued U.S. economic growth will fuel demand for imports –Port capacity is not expected to keep up with the growing activity Source 3

25 Forecast Chinas economy (GDP) expected to double by 2010 Restrictive labor practices in the US will hinder productivity growth at the ports Chokepoints between the ports and inland transportation will stall transfer of cargo Without a coherent expansion plan for transportation INFRASTUCTURE PROBLEMS will continue Source 3

26 Possible Solutions Financing Improvements –Improve rail and highway (inland modes of transportation) –U.S. public ports have already made advances –Expected investment: $1 billion each future year Public/Private Partnerships Involving all stakeholders –Carriers, ports, truckers –railroads –Government (state, local and Federal) Insourcing manufacturing – in North America Train more workers Source 1


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