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Globalization Triggers Construction at Nation's Ports
While globalization has both positive and negative effects on the U.S. economy, the impact is overwhelmingly on the plus side for construction activity at ports. Since 1945, U.S. ports have invested more than $34 billion in capital projects to enhance facilities. More than a quarter of this spending has taken place within the past five years, and the American Association of Port Authorities anticipates an estimated $2.1 billion to be spent annually going forward.
According to Martin Associates of Lancaster, Pa., the nation’s 185 ports directly and indirectly support 13.3 million U.S. jobs, accounting for roughly $650 billion in personal income. Deep-draft ports, which accommodate oceangoing vessels, move 99 percent of U.S. overseas trade by volume and 64 percent by value, according to the U.S. Census Bureau. And U.S. Department of Transportation data reveals that, relative to 2001, total freight moved through U.S. ports will increase by more than 50 percent by 2020, and the volume of international container traffic will more than double.
While ports often are associated with cargo and tonnage, another source of expanding activity has surfaced in recent years: travel and tourism. By 2006, the total economic impact of cruise lines, passengers and their U.S. suppliers approached $36 billion, according to a study conducted by Business Research and Economic Advisors. The impact of the U.S. cruise industry continues to expand well beyond its traditional base in South Florida, with cruises departing from or docking at 43 ports in North America.
Public-Private Partnerships Prove Increasingly Pivotal
Innovation will be essential to driving port-related construction in the future. With economic resources scarce and government budgets under duress, creative public-private partnerships will be key to fulfilling and potentially exceeding current construction volume projections. Model public-private partnerships already are being developed, a positive sign for contractors that derive work from U.S. ports.
For example, late last year Maryland Gov. Martin O’Malley announced a 50-year agreement between the Maryland Port Administration (MPA) and Ports America Chesapeake that will permit the MPA to lease its 200-acre Seagirt Marine Terminal to Ports America. In return, Ports America agreed to construct a 50-foot berth for the Port of Baltimore that will result in increased business opportunities and larger vessels utilizing port facilities. This public-private partnership is estimated to produce 5,700 new jobs—of which 3,000 will represent direct construction jobs—and total investment and revenue for the state of Maryland has the potential to reach in excess of $1.3 billion during the life of the agreement.
Investment and Construction Apparent Coast to Coast
Significant infrastructure improvements also are under way at the Port of Long Beach, Calif., including the $800 million multi-year Pier G modernization and the $750 million 10-year Middle Harbor Redevelopment project—the first phase of which is subject to a project labor agreement.
While ports on the East and West coasts represent critical links between the U.S. economy and the balance of the world, many of America’s largest ports are in Louisiana and Texas, where considerable investment continues to take place. Examples include the Port of New Orleans—the nation’s sixth largest port in terms of cargo volume (measured in tons), according to the U.S. Army Corps of Engineers—where $70 million of infrastructure repair and improvement projects are under way. The Port of Beaumont (Texas), the nation’s seventh largest port by cargo volume, recently began construction on a $22 million deepwater wharf and finalized plans and funding for a long-awaited $10.5 million rail yard reconfiguration project.
The growing connection between certain U.S. ports and military operations also represents a source of expanding opportunity. Port Arthur, Texas, recently was designated as a strategic military port, joining Beaumont and Corpus Christi as one of three such ports in the Gulf of Mexico. According to The Journal of Commerce, Port Arthur officials believe the designation stemmed from ongoing infrastructure improvements, including a refurbished rail holding yard, two berths that can handle 800 pounds per square foot and three berths that can handle up to 1,500 pounds per square foot.
The experience at Port Arthur and other forward-looking ports strongly suggests the key to growing cargo tonnage and market share is to continue to invest ambitiously in capacity and capability.
| Port/State | Millions of Tons |
| South Louisiana | 224 |
| Houston | 212 |
| New York/New Jersey | 153 |
| Long Beach, Calif. | 80 |
| Corpus Christi, Texas | 77 |
| New Orleans | 73 |
| Beaumont, Texas | 69 |
| Huntington Tri-State, W.Va. | 69 |
| Mobile, Ala. | 68 |
| Hampton Roads, Va. | 67 |
| Plaquemines, La. | 64 |
| Los Angeles | 60 |
| Lake Charles, La. | 54 |
| Texas City, Texas | 53 |
| Baton Rouge, La. | 52 |
| Duluth-Superior, Minn./Wis. | 45 |
| Baltimore | 43 |
| Pittsburgh | 42 |
| Tampa, Fla. | 41 |
| Paulsboro, N.J. | 36 |
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Wednesday, February 8, 2012