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Department of Industrial Engineering1 Economic Evaluation of the Impact of Waterways on the Port of Cincinnati-Tristate Heather Nachtmann, Ph.D. River.

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Presentation on theme: "Department of Industrial Engineering1 Economic Evaluation of the Impact of Waterways on the Port of Cincinnati-Tristate Heather Nachtmann, Ph.D. River."— Presentation transcript:

1 Department of Industrial Engineering1 Economic Evaluation of the Impact of Waterways on the Port of Cincinnati-Tristate Heather Nachtmann, Ph.D. River Industry Forum November 16, 2005

2 Department of Industrial Engineering2 Outline Project Overview Input-output model Regional multipliers U.S. Waterways Statistics Importance Cincinnati – Tristate Region Summary

3 Department of Industrial Engineering3 Project Overview Analyzing and reporting the economic impacts of port activities on the Port of Cincinnati tri-state area Economic impacts of port activities on the tri-state area will be analyzed through the application of an input-output model Empirical results will indicate how port activities directly and indirectly contribute to the economic growth of this area Economic value Earnings Employment

4 Department of Industrial Engineering4 Project Overview (cont.) Findings of the study will help to show how the economic prosperity of this area is affected by waterway utilization Further investment in port development has the potential to increase the tri-state area’s competitive advantage In addition to offering social and environmental benefits

5 Department of Industrial Engineering5 Project Overview Input-output Model Most widely used and accepted method for conducting economic impact studies of water transportation Uses regional multipliers to estimate the indirect economic impacts of an activity within a region Direct economic impacts are input into the model and multiplied by the input-output multipliers Results are the total regional economic impacts of the activity, including both the direct and indirect impacts Economic value Earnings of employees Number of jobs

6 Department of Industrial Engineering6 Project Overview Regional Multipliers Estimate the effects of the changes in the output of an industry (e.g. water transportation) in an area on the economic output, employment, and labor earnings in the other industries in that area Developed by the Bureau of Economic Analysis (BEA), U.S. Dept. of Commerce Industry standard

7 Department of Industrial Engineering7 U.S. Waterways Important Trends Amount of trade and cargo moving through ports is increasing in general Increased need to maintain environmental and economic balance in their operations Greater need for capital investment in port infrastructure (AAPA, 2005)

8 Department of Industrial Engineering8 U.S. Waterways 2002 Barge Traffic by Commodity

9 Department of Industrial Engineering9 U.S. Waterways Cargo Movement Impacts $1.1 million direct and indirect jobs $44 billion in personal income $56 billion in transportation service revenue $729 billion to the Gross Domestic Product $16.1 billion in federal, state and local taxes

10 Department of Industrial Engineering10 Additional Benefits of Waterway Transportation Low shipping rates 38% of rail, 18% of truck Low fuel consumption (ton-miles per gallon) 254% more than rail, 871% more than truck Low emission ModeHydrocarbonCarbon Monoxide Nitrous Oxide Towboat0.090.200.53 Rail0.460.641.83 Truck0.631.9010.17

11 Department of Industrial Engineering11 National Importance of Water Transportation Traffic congestion caused 3.7 billion hours of travel delay and 2.3 billion gallons of wasted fuel (~$63 billion) Since 1982, 74% increase in vehicle miles traveled has occurred but road lane mileage has only increased 6% Serious investment in new public transit, rail, airport, and waterway capacity has been neglected (Texas Transportation Institute, 2003)

12 Department of Industrial Engineering12 National Importance of Water Transportation (cont.) National highway system is nearly saturated Inland waterways are a logical transportation alternative with great potential benefit to commerce and consumers 16% of the nation’s freight is moved by water for just 2% of the nation’s freight cost Saving over $7 billion/year for shippers and consumers The key to maximizing efficiency of waterways transportation is modernizing ports and infrastructure (Traffic World, 2002)

13 Department of Industrial Engineering13 Top 5 Inland U.S. Ports RankPort TonsTrip Ton-Miles Average (millions)% Diff.Average (millions)% Diff. CY 98-02 (M)CY 03CY 98-02 (M)CY 03 1Huntington78.277.6-0.728.326.7-5.7 2St. Louis33.032.4-1.624.624.2-1.7 3Pittsburgh53.041.7-21.318.316.1-12.3 4Memphis17. 5Cincinnati13.511.8- Waterborne Commerce Statistics Center

14 Department of Industrial Engineering14 Tonnage for Selected Ohio River Ports Waterborne Commerce Statistics Center

15 Department of Industrial Engineering15 Cincinnati – Tristate Region

16 Department of Industrial Engineering16 BEA Economic Area Relevant regional markets surrounding metropolitan or micropolitan statistical areas Regional centers of economic activity and surrounding counties that are economically related Cincinnati-Middletown-Wilmington, OH- KY-IN

17 Department of Industrial Engineering17 Summary Objective is to raise awareness of the economic benefits of the Port of Cincinnati to the Tristate region Overall goal is to use this increased awareness to obtain additional funding for port operations

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