Ports and the Economy Presentation for Management Seminar Unisantos, Brazil by Dr. Veronica Z. Kalich Associate Professor – Economics Baldwin-Wallace College May 2005
Mar 31, 2015
Ports and the Economy
Presentation for Management Seminar Unisantos, Brazil
byDr. Veronica Z. Kalich
Associate Professor – EconomicsBaldwin-Wallace College
May 2005
Global Patterns of US Merchandise Trade - Balance
2004 Balance of TOTAL in thousands $USD
-700,000,000
-600,000,000
-500,000,000
-400,000,000
-300,000,000
-200,000,000
-100,000,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
U.S. Merchandise Trade Balance with the World
Product Value ($)
84--NUCLEAR REACTORS, BOILERS, MACHINERY ETC.; PARTS
-51,617,584,407
85--ELECTRIC MACHINERY ETC; SOUND EQUIP; TV EQUIP; PTS
-60,145,224,362
87--VEHICLES, EXCEPT RAILWAY OR TRAMWAY, AND PARTS ETC
-117,940,556,289
27--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
http://tse.export.gov/NTDChartDisplay.aspx?UniqueURL=b02fabe11gh5htzoey4yrerh-2005-5-4-10-51-44
Exports and Imports of Goods and Services
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1972
19
73
19
74
19
75
19
76
19
77
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
2003
2004
$Bil
s.
EXPORTS Imports
Trade Balance
-700
-600
-500
-400
-300
-200
-100
0
100
$Bils.
Deficits with Top Trading Partners of the U.S.
($190.00) ($150.00) ($110.00) ($70.00) ($30.00) $10.00
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
$bils
South America
China
Japan
EU Area
Mexico
Canada
-700.0
-600.0
-500.0
-400.0
-300.0
-200.0
-100.0
0.0Index: 1973=100
80.0
90.0
100.0
110.0
120.0
130.0
140.0$bils.
Trade Deficit
Trade Weighted Value of$U.S.
U.S. Trade Deficit and the Trade Weighted Index of the U.S. Dollar (1973 = 100)
-700.0
-600.0
-500.0
-400.0
-300.0
-200.0
-100.0
0.0
$bils
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
%
Trade Deficit
Value of $US
U.S. Trade Deficit and Change in Currency Valuation(1980-2004)
Trade Effects on U.S. Labor Market
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
0.18
%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
%
Imports as a % of RGDPUnemployment Rate
-10 -8 -6 -4 -2 0 2 4 6 8
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
$U.S. billions
Balance of Trade with Brazil
Ohio Exports to Brazil - 2004
Product Value ($) Percent
Transportation Equipment
215,174,257 43.8 %
Chemical Manufactures
84,831,095 17.3 %
Machinery Manufactures
73,735,725 15 %
Fabricated Metal Products
26,276,338 5.4 %
All Others 90,815,326 18.5 %
Grand Total 490,832,741 100 %
Product Value ($)
84--NUCLEAR REACTORS, BOILERS, MACHINERY ETC.; PARTS
1,577,239,378
27--MINERAL FUEL, OIL ETC.; BITUMIN SUBST; MINERAL WAX
-1,269,218,827
44--WOOD AND ARTICLES OF WOOD; WOOD CHARCOAL
-1,538,002,188
72--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 - 2004
Virginia Port Authority, VA
Wood pulp LoadingAlabama State DocksMobile, AL
Florida Dept. of Commerce
Salt transferred atPort Newark/Elizabeth, NJ
Hanjin Shipping TerminalPort of Long Beach, CA
Black Falcon Cruise TerminalBoston, MA
Ports as Gateways to Global Trade
Military CargoPort of Tacoma, WA
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
Selected World Port RankingTotal Cargo Volume 2003
Rank Port Country Tons*
1 Singapore Singapore 347,694 FT
2 Rotterdam Netherlands 326,958 MT
4 Hong Kong China 207,612 MT
5 South Louisiana United States 180,493 MT
6 Houston United States 173,320 MT
18 New York/New Jersey United States 132,438 MT
36 Tubarao Brazil 77,621 MT
42 Itaqui Brazil 67,591 MT
46 Long Beach United States 62,816 MT
47 Santos Brazil 60,077 MT
~
* MT = Metric Ton FT = Freight Ton
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
•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
Port Congestion – Infrastructure Problem
• Ports can’t expand (ie. California)– Infrastructure costs are beyond the state’s fiscal
capacity/resources– Anti-expansion sentiments
• Ports come with traffic problems and pollution
• Rising Fuel costs affect truckers hauling loads– “waiting isn’t worthwhile”
• Few legislative responses– Focus is more on increased security– Use of alternative deep-water ports
U.S. Waterborne Foreign TradeTop 10 Trading Partners
Containerized Cargo2004
*Twenty-Foot Equivalent Units Source 3
COUNTRIES TOTAL EXPORT IMPORTGRAND TOTAL 23,850,523 8,045,045 15,805,478 Top 10 Countries:
CHINA 7,351,341 1,390,714 5,960,627 JAPAN 1,608,354 836,358 771,996 HONG KONG 1,452,548 313,757 1,138,791 SOUTH KOREA 963,492 448,618 514,874 TAIWAN 928,553 340,454 588,099 GERMANY(W) 673,034 190,349 482,685 BRAZIL 654,260 177,836 476,424 ITALY 612,277 132,151 480,126 THAILAND 525,646 114,833 410,813 INDIA 447,165 148,118 299,046
TEU's (Actual)
Top 10 U.S. Ports Ranked by Value of Cargo
Foreign Trade (2003 - $Mils.U.S.) Rank Port Exports Imports Total Foreign
Trade
1 Los Angeles (CA) $16,865 $105,186 $122,050
2 New York/NJ $24,303 $ 76,873 $101,176
3 Long Beach(CA) $16,865 $ 78,700 $ 95,863
4 Houston (TX) $21,439 $ 28,454 $ 49,893
5 Charleston (SC) $13,375 $ 26,000 $ 39,375
6 Hampton Rds(VA) $12,248 $ 20,687 $ 32,935
7 Tacoma (WA) $ 5,203 $ 21,129 $ 26,332
8 Baltimore (MD) $ 5,686 $ 20,270 $ 25,956
9 Oakland (CA) $ 7,762 $ 17,381 $ 25,144
10 Seattle (WA) $ 5,687 $ 17,389 $ 23,077
Source 2
Port and Intermodal Chokepoints
Problem Spots - 2004
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
Forecast
• China’s 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
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