THE ECONOMIC IMPACTS OF THE PORT OF BALTIMORE

Prepared for the:

MARYLAND PORT ADMINISTRATION

Revised January 28, 2008

Prepared by:

MARTIN ASSOCIATES
941 WHEATLAND AVE., SUITE 203 LANCASTER, PA 17603

Maryland Port Administration
Inter-Office Memorandum

TO: DATE:

File March 19, 2008

SUBJECT: MPA’s comments concerning the Martin and Associates Study of Economic Impacts to Port of Baltimore in 2006
The MPA commends the excellent work by Martin and Associates in completing a comprehensive report of the economic impacts of the Port of Baltimore in late 2007, and revised on January 28, 2008. There are two methodology changes (or new features) in the current report - induced and indirect related jobs and a new single measure of the total economic activity. Although other ports are using this enhanced methodology, the MPA chooses not to include them when speaking of the Port’s impacts for the following reasons: • In previous comprehensive studies, only the number of direct related jobs was measured. In the January 2008 study, the related impacts measure the jobs, personal income, and associated state and local taxes that occur at each stage of production of exports or consumption/use of imported cargo. This includes induced and indirect related jobs that are supported by the direct related jobs. The new change in methodology in the current study concerning total related jobs provides a very comprehensive and extremely broad view of the economic impact of the cargo moving via the Port of Baltimore to the State of Maryland. Upon further consideration and external peer review of the comprehensive study, the induced and indirect related jobs are not consider sufficiently linked to Port activity to be included by the MPA when it reports the economic impacts of the Port of Baltimore. Also new in the 2006 study is a single measure of the total economic activity in the State that is generated by the cargo moving via the Port of Baltimore. Although provided by the comprehensive study, this measure is also not used by the MPA, because it is tied to the total related jobs and it over simplifies the many facets of economic impacts, such as revenues, salaries, taxes, etc.

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Attached is a summary of the Port’s economic impacts to the State of Maryland from cargo activity in 2006.

ECONOMIC IMPACTS GENERATED BY THE PORT OF BALTIMORE IN 2006
(February 2008)

Periodically, the Maryland Port Administration updates the economic impacts of the Port of Baltimore on the Baltimore region and the State of Maryland. The economic impacts measured for 2006 cargo activity are as follows: Approximately 50,200 jobs in Maryland are generated by port activity. • 16,500 are direct jobs generated by cargo and vessel activities at the Port. Examples include jobs with railroads, trucking companies, terminal operators, cargo handling (International Longshoreman Association), manufacturing, towing, pilots, ocean carriers, agents, etc. • 19,500 are induced jobs, i.e. jobs supported by the local purchases of goods and services by direct employees. These jobs would be lost in the short term if the direct jobs were lost. Examples include sales clerks, mechanics, teachers, government employees, etc. • 14,200 are indirect jobs, i.e. jobs supported by the business purchases of the employers who create the direct jobs. These jobs, too, would be lost in the short term if the direct jobs were lost. Examples include those who provide office supplies and equipment, utilities, communications, repair, legal and financial services, etc. The Port of Baltimore is a major source of personal and business revenues in the State of Maryland. • The Port was responsible for $3.6 billion in personal wage and salary income in 2006. • The Port generated $1.9 billion in business revenues in 2006. • Local purchases by businesses directly dependent on port activity amounted to $1.3 billion. • Activities of the Port generated $388 million in state, county and municipal tax revenues in 2006. Approximately 68,300 other jobs in Maryland are directly related to activities at the Port. Related jobs are those jobs with Maryland companies that chose to import and export their cargo through the Port of Baltimore, but they have the option of shipping their products or supplies (e.g. containerized items, autos or steel products for construction) through a number of other ports. These companies (e.g. manufacturing firms, distributers, coal mines, automobile dealers, etc.) benefit from having a healthy port nearby in Baltimore to assist their logistics. If the Port of Baltimore were not available to them, these firms could suffer an economic penalty over the longer term, but would likely survive by shipping through another port. Note: Although the number of related jobs is high, this category of impact is much less dependent upon the Port than the impacts that are generated by the direct, induced and indirect jobs. Combining direct, induced and indirect jobs with related jobs, there are nearly 120,000 jobs linked to the Port.

TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................... 1 Comparison of Economic Impacts – 2002-2006.................................................................. 4 I. OVERVIEW OF THE ANALYSIS AND SUMMARY OF METHODOLOGY .................... 6 1. ECONOMIC IMPACT STRUCTURE........................................................................... 6 1.1 Employment Impact.............................................................................................. 8 1.2 Personal Income Impact ....................................................................................... 8 1.3 Revenue Impact .................................................................................................... 9 1.4 Tax Impacts .......................................................................................................... 9 2. ECONOMIC IMPACT SECTOR ANALYSIS............................................................. 10 2.1 The Surface Transportation Sector ...................................................................... 10 2.2 The Maritime Service Sector............................................................................... 10 2.3 Shippers/Consignees............................................................................................ 13 2.4 Maryland Port Administration............................................................................. 13 2.5 Banking/Insurance/Admiralty Law ..................................................................... 13 3. COMMODITIES INCLUDED IN THE ANALYSIS................................................... 13 4. DATA COLLECTION.................................................................................................... 14 II. EMPLOYMENT IMPACTS ..................................................................................................... 16 1. TOTAL EMPLOYMENT IMPACT.............................................................................. 16 2. DIRECT JOB IMPACTS................................................................................................ 17 2.1 Direct Job Impacts by Sector............................................................................... 18 2.2 Direct Job Impacts by Residency ........................................................................ 19 2.3 Direct Job Impacts by Commodity ...................................................................... 19 2.4 Direct Job Impacts per 1,000 Tons...................................................................... 23 3. INDUCED JOBS.............................................................................................................. 24 4. INDIRECT JOBS ............................................................................................................ 25 5. RELATED JOBS ............................................................................................................. 25 III. REVENUE, PERSONAL INCOME AND TAX IMPACTS ................................................. 28 1. TOTAL ECONOMIC ACTIVITY ................................................................................ 28 2. DIRECT BUSINESS REVENUE IMPACT.................................................................. 29 3. PERSONAL INCOME IMPACTS ................................................................................ 32 4. TAX IMPACTS ............................................................................................................... 32 IV. COMPARISONS WITH 2002 IMPACTS .............................................................................. 34 1. METHODOLOGICAL CHANGES ............................................................................. 34 2. COMPARISON OF TONNAGE ACTIVITY............................................................... 35 3. STRUCTURAL CHANGES WITH DEPENDENT SHIPPERS/CONSIGNEES ..... 36 4. COMPARISON OF TOTAL IMPACTS....................................................................... 36 5. COMPARISON OF DIRECT JOB IMPACTS ............................................................ 37 6. SUMMARY OF IMPACT COMPARISONS ............................................................... 38

EXECUTIVE SUMMARY
The Port of Baltimore consists of public marine terminals owned by the Maryland Port Administration as well as private marine terminals. The public marine terminals include the Seagirt Marine Terminal, Dundalk Marine Terminal, South Locust Point Marine Terminal, the North Locust Point Marine Terminal, and the Masonville/Fairfield terminal area. These terminals handle general cargo commodities including containerized cargo, automobiles and other roll-on/roll-off cargo, forest products and other breakbulk cargoes such as iron and steel and palletized cargo. The private marine terminals include the Curtis Bay Coal and Ore Pier, the Consolidation Coal Pier, the Chesapeake Terminal, the Atlantic Terminal, Rukert Terminals Corporation and Canton Marine Terminal. Except for the Chesapeake and Atlantic Terminals located in the Masonville/Fairfield terminal area, which handle automobiles, the other private terminals handle bulk cargoes, steel and metals, and a small amount of container and breakbulk cargo. In 2006, these public and private marine terminals in the Baltimore Port District handled more than 40 million tons of international and domestic cargo for exporters and importers located within the State of Maryland, as well as throughout the United States. It is the purpose of this study to quantify the economic impacts generated by the cargo and vessel activity at these marine terminals. Impacts of cruise activity are not included.

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Summary of the Economic Impacts of the Port of Baltimore
PUBLIC TERMINALS JOBS DIRECT INDUCED INDIRECT TOTAL PERSONAL INCOME (1,000) DIRECT RE-SPENDING INDIRECT TOTAL BUSINESS REVENUE (1,000) LOCAL PURCHASES (1,000) STATE & LOCAL TAXES (1,000) RELATED IMPACTS JOBS DIRECT INDUCED/INDIRECT TOTAL PRIVATE TERMINALS TOTAL

6,775 7,497 2,146 16,418

9,718 12,035 12,016 33,768

16,493 19,532 14,161 50,186

$296,432 $874,533 $87,133 $1,258,098 $986,861 $220,408 $134,617

$491,525 $1,450,097 $429,793 $2,371,416 $863,859 $1,066,475 $253,741 RELATED USER IMPACTS IN-STATE

$787,957 $2,324,631 $516,926 $3,629,514 $1,850,721 $1,286,883 $388,358

64,010 172,034 236,044

4,297 9,781 14,078

68,307 181,815 250,122

PERSONAL INCOME/WAGES (1,000) DIRECT $4,332,829 INDUCED/INDIRECT $6,083,037 TOTAL $10,415,866 BUSINESS REVENUE/VALUE OF OUTPUT (1,000) TOTAL $47,628,782 STATE/LOCAL TAXES (1,000) DIRECT INDUCED/INDIRECT TOTAL

$124,952 $435,273 $560,225

$4,457,780 $6,518,310 $10,976,090

$2,040,571

$49,669,353

$463,613 $650,885 $1,114,498

$13,370 $46,574 $59,944

$476,982 $697,459 $1,174,442

Totals may not add due to rounding.

In 2006, cargo and vessel activity at the public and private marine terminals in the Port of Baltimore generated 50,186 direct, induced and indirect jobs: • 16,493 are direct jobs. These jobs are generated by activities at the Port, and if such activities should cease, the jobs would be discontinued over the short term. It is these jobs that are most directly dependent upon the Port of Baltimore. The direct jobs are with the International Longshoremen’s Association, terminal operators, stevedores, trucking firms, railroads, steamship agents, freight forwarders and customshouse brokers, warehousemen, Federal and State government agencies, towing companies, pilot organizations, and marine construction companies, etc. The majority, about 70%, of the direct jobs are held by residents of the City of Baltimore and Baltimore County. 2

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19,532 are induced jobs, or those jobs supporting the local purchases made by the 16,493 individuals holding the direct jobs due to port activity. Should the direct jobs be lost from the economy, the induced jobs supported by the purchases of the direct jobs would also be lost. Jobs with local grocery stores, retail outlets, restaurants, transportation services, local government services, schools and hospitals are examples of induced jobs. The firms’ dependent upon the Port of Baltimore made $1.3 billion of local purchases for office supplies, equipment, utilities, communications, maintenance and repair services, transportation services, professional services, and goods and services. These purchases supported 14,161 indirect jobs in the Maryland economy. In addition to the direct, induced and indirect job impacts, the Port activity supports 250,122 jobs within the state that are related to the Port of Baltimore. Of these 250,122 related jobs, 68,307 jobs are directly related to the cargo moving via the Port of Baltimore, while the balance, 181,815 jobs, are indirect and induced support jobs. The direct related jobs are held by employees of the firms exporting and importing cargo through the Port of Baltimore and include such varied entities as manufacturing firms, coal mines, and automobile dealers. In addition, the related jobs include the induced and indirect jobs created at each level of production that are related to an imported product (through the Port of Baltimore) used as an intermediate input in a manufacturing activity, as well as the jobs created at each level of activity to produce an export product moved via the Port of Baltimore. For consumer imports, the related jobs include all jobs and economic activity that are required to the point of final sale. These jobs are considered to be related to activities at the Port, but the degree of dependence on the Port is difficult to estimate and should not be considered as dependent on the port as are the direct, induced and indirect jobs. If the Port of Baltimore were not available to these organizations, they would suffer an economic penalty over the longer term. Such a penalty would vary from a loss of employment opportunities in some cases to an increase in total transportation costs in other cases, which could, in turn, result in employment reductions and corporate relocations.

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The port activity generated $3.6 billion in personal wage and salary income for Maryland residents. • • The 16,493 directly employed individuals received $788.0 million of personal wage and salary income, for an average salary or wage of $47,780. As the result of the multiplier effects of using a portion of this income for local purchases, $2.3 billion in induced income and consumption expenditures were created in the state.1 Those 14,161 indirectly employed received $516.9 million of indirect income.

The respending impact includes the local purchases by those directly employed as well as the consumption expenditures. Therefore, the total respending impact cannot be divided by induced jobs to estimate induced salary, as this would be an overestimate of personal income.

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Businesses providing maritime services at the Port of Baltimore received $1.9 billion of revenue. • The $1.9 billion of revenue received by the businesses providing the services at the Port does not include the value of the cargo moving over the marine terminals, since the value of the cargo is determined by the demand for the cargo, not the use of the Port of Baltimore. It is to be emphasized that only the portion of the revenue paid out in direct salaries, in state and local taxes, and for local purchases can be identified as a “Maryland impact”. Of the $1.9 billion, $788.0 million was paid out in terms of direct salaries to the Maryland residents employed by these firms. It is to be emphasized that the value of sales or output by the directly dependent shippers/consignees is not included in the business revenue impact, even though the direct jobs and personal income with these shippers/consignees is included as a local impact. A total of $1.3 billion of in-state purchases were made by the firms directly dependent on the Port of Baltimore. These expenditures supported the 14,161 indirect jobs. A total of $388.4 million of state and local tax revenue was generated by Port activity in 2006. In addition to the direct, induced and indirect impacts, cargo moving via the Port of Baltimore in 2006 generated $49.7 billion of economic activity. This represents the value of the output to the State of Maryland that is created due to the cargo moving via the Port of Baltimore public and private marine terminals. This includes the value added at each stage of producing an export cargo, as well as the value added at each stage of production for the firms using imported raw materials and intermediate products that flow via the marine terminals and are consumed within the state, as well as the revenue generated at each stage of delivery of a consumer import (via the Port) to final sales. The majority of these user impacts are associated with imported containerized cargo via the Maryland Port Administration marine terminals. The 250,122 related direct, induced and indirect users of the Port of Baltimore received $11 billion of total wages and salaries. Finally, the cargo activity at the Port of Baltimore generated $1.2 billion of state and local taxes with the related users. Comparison of Economic Impacts – 2002-2006 The major changes that have occurred in terms of economic impacts generated by the Port of Baltimore between fiscal year 2002 and 2006 consist of a significant growth in cargo, including a growth in containerized cargo, breakbulk cargo, liquid bulk cargo and coal. Overall, direct jobs have increased by 753 jobs, and there was an increase in the amount of in-state purchases by the firms directly dependent on the Port of Baltimore that resulted in the addition of 5,243 indirect jobs. This increase in in-state purchases also reflects a more comprehensive inclusion of local purchases by 4

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Mittal Steel. Induced jobs have grown due to a revision of the personal income multiplier for water transportation workers, as reported by the US Bureau of Economic Analysis, and as a result of this change in methodology, a comparison between induced jobs in 2002 and 2006 cannot be made. Key increases with the direct jobs were associated with the growth in containerized cargo and breakbulk cargo handled at the MPA public terminals, while the growth in breakbulk cargo (including project cargo), and liquid bulk cargo were recorded at the private terminals. This growth in commodity tonnage translates into direct job increases for terminal workers and members of the ILA serving the port, as well as for local trucking firms and warehousemen. As noted, the largest job loss, more than 1,000 jobs since 2002, is due to the downsizing of the Mittal operation at Sparrows Point. This increased economic value of the Port of Baltimore to the State of Maryland further underscores the need for the continued investment in marine terminals and transportation infrastructure to support the growth in cargo and vessel activity at the Port of Baltimore.

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I. OVERVIEW OF THE ANALYSIS AND SUMMARY OF METHODOLOGY
Martin Associates was retained by the Maryland Port Administration to update the Economic Impact Study of the Port of Baltimore conducted in 2003 using 2002 cargo data. For the most part, this update uses the same methodology and impact definitions as the 2002 study, and, hence, the results are directly comparable to the earlier study.2 Furthermore, a computer model specific to the Port of Baltimore has been prepared which can be used in evaluating incremental impacts resulting from changes in tonnage, labor productivity, labor work rules, commodity mix, inland origins/ destinations of commodities and vessel size. In addition, the model will be useful in: • • • projecting the impacts of the recruitment of a new ocean carrier or a new shipper or consignee to the Port of Baltimore; evaluating potential investments in port facilities; and preparing annual reports on the economic impacts of the Port.

The methodology used in this analysis has been developed by Martin Associates and used to estimate the economic impacts of seaport activity at more than 120 seaports in the United States and Canada. This chapter presents an overview of the economic impact analysis by defining the following: • The types of economic impacts estimated; • The five economic sectors for which impacts have been estimated; • The commodities/commodity types for which impacts have been estimated; and • A summary of the data sources used in the analysis is presented.

1. ECONOMIC IMPACT STRUCTURE

The Local and Regional Economic Impacts of the Port of Baltimore prepared for the Maryland Port Administration, 2002. There have been several changes in the methodologies used to estimate the induced impacts and the related impacts. These changes in methodology are documented in Chapter IV.

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A deepwater port such as Baltimore contributes to the local, regional, and national economies by providing employment and income to individuals, tax revenues to local and state governments, and revenue to businesses engaged in handling, shipping, and receiving cargo via the seaport. Exhibit I-1 shows the flow of economic impacts created by seaport activity at the public and private marine terminals at the Port of Baltimore. Exhibit I-1 Flow of Economic Activity Created by the Port of Baltimore

Seaport Activity

Value of Imports/Exports

Business Revenue

Related Users Output

Payroll

Retained Earnings, Dividends Investments

Local Purchases

Related User Personal Income

Direct Jobs

Respending

Induced Jobs

Indirect Jobs

Related User Jobs

State & Local Taxes

Activity at a seaport (i.e., manufacturing, the handling of cargo and the servicing of vessels) initially creates business revenue to firms providing those cargo handling and vessel services. This revenue is in turn used for several purposes: • • • • To hire employees to provide the services; To pay stockholders dividends, retire debt, and invest; To buy goods from other firms; and To pay Federal, state, and local taxes. 7

The hiring of employees generates personal income. This personal income is spent throughout the state, local and national economies to purchase goods and services. This respending of income is known as the multiplier effect, which in turn creates induced jobs throughout the economy. Finally, Federal, state and local taxes are paid by those directly employed in port activity, those employed as a result of the in-state purchases of goods and services by those individuals directly employed and by those employed to deliver goods and business services to the direct employers. The flow of economic impacts throughout an economy creates four separate and non-additive types of impacts. These four types of impacts are described below. 1.1 Employment Impact The employment impact consists of direct jobs, induced jobs, indirect jobs and related jobs. The servicing of the vessels, the handling of cargo and manufacturing at the Port generates the direct employment impact. These direct jobs would not exist in the absence of cargo and vessel activity at the Port. The induced jobs are supported by the purchases of goods and services by those directly employed, and would also cease to exist if the direct jobs were discontinued. Hence, the induced jobs are dependent upon the direct jobs and the associated level of wages and salaries, and the resulting local purchases made by those directly employed (direct jobs) by activity at the Port of Baltimore. In addition to the direct and induced jobs, another type of employment impact supported by seaport activity is the indirect job impact. These indirect jobs are generated in the local economy by the purchases of goods and services by the firms, which provide the direct jobs. For this study, indirect jobs are estimated based on the regional respending patterns of the firms providing the vessel and cargo handling services at the Port of Baltimore, and by the shippers/consignees directly dependent upon the port for the shipment and receipt of cargo. The last component of the employment impact is the related job impact. Related jobs are jobs with shippers/consignees using the Port of Baltimore for the export and import of cargo. However, these shippers/consignees also use other ports and are not completely dependent upon the Port of Baltimore. The level of employment with these firms is driven by the demand for the firms' products, not because the Port of Baltimore is used. Therefore, these related jobs are not dependent upon port activity, and their degree of dependence on the Port of Baltimore is much less than the other components of the job impact.3 1.2 Personal Income Impact

The related jobs, income, value of output and taxes should not be used when evaluating the incremental economic impacts of specific port projects or the impacts of changes in cargo volume.

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Personal income impact is derived from three sources. First, personal income impact is the measurement of the wages and salaries generated by port activity and paid to those holding the direct jobs. As the result of local purchases by the direct employees who received the wages and salaries, a respending effect also occurs in the local economy. This personal income multiplier effect, which is also included in the measurement of the personal income impact, generates the induced jobs. An indirect income impact is estimated as part of this study in order to capture the wage and salary income received by those indirectly employed due to the local purchases by the firms’ dependent upon the Port of Baltimore. An estimate is also developed for the wages and salaries received by the related users. 1.3 Revenue Impact The business revenue impact measures the sales generated by firms engaged in handling and transporting cargo through the Port of Baltimore. This impact includes national, as well as, local and state revenue. The value of shipments through the Port is not included as a revenue impact for the purposes of this analysis, because the value of a particular commodity shipped or received via the Port of Baltimore is determined by the demand for that particular commodity, not by the fact that the commodity moves via the Port of Baltimore. A portion of this revenue generated by providing vessel services and cargo handling services at the Port is then used to pay wages and salaries to those holding the direct jobs, and to purchase goods and services to support port activity. A measure of the total value of economic activity created in the state by cargo moving via the Port is developed to demonstrate the magnitude of the value of the economic activity supported by cargo moving via the Port. 1.4 Tax Impacts The tax impacts measure the state and local tax revenues generated by port activity. These are taxes paid by both corporations and those holding the direct, induced, indirect and related jobs. The tax revenue impacts include the following types of taxes: • State taxes, including personal and corporate income tax, state sales and use taxes, motor fuel tax, vehicle registration tax, property tax, property transfer tax, shellfish tax, recordation tax, death tax, horse racing tax, telecommunication tax and miscellaneous taxes; County taxes, including property and income taxes, as well as licensing and permit taxes; Municipal taxes, including the local share of the income tax and property tax; Federal taxes are not included, since the purpose of this report is to estimate the local and regional economic impacts of maritime activity at public and private facilities at the Port of Baltimore; and State and local taxes created by the related use activity are also quantified. 9

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2. ECONOMIC IMPACT SECTOR ANALYSIS
Shipments through the Port of Baltimore generate economic impacts in various business sectors of the state and local economy. Specifically, five distinct economic sectors are involved in activity at the Port of Baltimore. These are the: • • • • • Surface Transportation Sector; Maritime Service Sector; Shippers/Consignees using the port; Maryland Port Administration; and Banking/Insurance/Admiralty Law.

Within each sector, various participants are involved. Separate impacts are estimated for each of the participants. A discussion of each of the economic impact sectors is provided below, including a description of the major participants in each sector. 2.1 The Surface Transportation Sector The surface transportation sector consists of both the railroad and trucking industries. These sectors are responsible for moving the various cargoes between the port and their inland origins and destinations. Two mainline railroads serve the Port of Baltimore. Many local and national trucking firms serve the Port of Baltimore, as do numerous individual owner-operators. The trucking industry's major involvement is in moving general cargo commodities, primarily automobiles, breakbulk cargo and containerized cargo. In addition, the trucking industry plays a major role in the distribution of other dry bulk commodities, such as sugar, salt, fertilizer, ores, and liquid bulk commodities. 2.2 The Maritime Service Sector This sector consists of numerous firms and participants performing the following maritime services: • Cargo Marine Transportation; • Vessel Operations and Support Services;

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• Cargo Handling; and • Federal, State, and Local Government Agencies. A brief description of the major participants in each of these categories is provided below: • Cargo Marine Transportation - Participants in this category are involved in arranging for inland and water transportation for export or import freight through the Port of Baltimore. The freight forwarder/customhouse broker is the major participant in this category. The freight forwarder/customhouse broker arranges for the freight to be delivered between the Port and inland destinations, as well as the ocean transportation. This function performed by freight forwarders and customhouse brokers is most prevalent for general cargo commodities. For bulk cargo, arrangements are usually made by the shipper/receiver, and the cargo passes over privately owned terminals.

• Vessel Operations and Support Services - This category consists of several participants. The steamship agents and land-side steamship line personnel based in the port city provide a number of services for the vessel as soon as it enters the Port. For example, the agents and land-side steamship line personnel arrange for pilot services and towing, for medical and dental care of the crew, and for ship supplies. The agents and land-side steamship line personnel are also responsible for vessel documentation. Land-side steamship line personnel are also often involved in marketing the ocean carrier's services and overseeing vessel and terminal operations while the vessel is in port. In addition to the steamship agents and steamship line personnel based in the port city, other participants providing vessel services include: Chandlers - supply the vessels with ship supplies (food, clothing, nautical equipment, etc.); Towing firms and pilots - the towing firms provide the tug service to guide the vessel to and from port while the pilots assist in navigating the vessels along the Chesapeake Bay, the Chesapeake & Delaware Canal and the harbor channels; Barge/Tug operators - provide the towing services to domestic and international cargo moving to and from the Port of Baltimore, primarily on the Chesapeake Bay and along the Chesapeake & Delaware Canal; Bunkering firms - provide fuel to the vessels; Marine surveyors - inspect the vessels and the cargo; Launch services - provide transportation for the crew between land and vessel;

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Chemical testing services - test cargo, such as coal, for proper chemical composition, water content, etc.; and Shipyards/marine construction firms - provide repairs, either emergency or scheduled, as well as marine pier construction and dredging. Also included in this category are one-time impacts generated by the construction of new marine facilities, as well as ongoing maintenance.

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Cargo Handling - This category involves the physical handling of the cargo at the Port between the land and the vessel. Included in this category are the following participants: Longshoremen - are members of the International Longshoremen's Association (ILA), and are involved in the loading and unloading of cargo from the vessels, as well as handling the cargo prior to loading and after unloading. Private terminals, such as those handling dry bulk cargoes, typically do not use members of the International Longshoremen's Association, but instead use other union labor or non-union labor4; Stevedoring firms – employ and manage the longshoremen and cargo-handling activities; Terminal operators - are often stevedoring firms who operate the maritime terminals where cargo is loaded and off-loaded. Terminal operators include those leasing facilities from the Maryland Port Administration, as well as those operating private terminals; Warehouse operators - store cargo after discharge or prior to loading and consolidate cargo units into shipment lots; Container leasing and repair firms - provide containers to steamship lines and shippers/consignees and repair damaged containers; Freight consolidators - consolidate containerized cargo as well as full containers in order to achieve favorable transportation rates for their customers; and Automobile service/processing firms - service new automobiles after they are offloaded from the vessels and process autos for export. These processors are sometimes terminal operators, as well. The processors also prepare Ro/Ro cargo such as farm equipment and construction equipment prior to export and after import receipt.

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The International Longshoremen in this category include deep-sea longshore labor working on the vessel and on the terminal, as well as checkers and clerks, and members of the local warehousing union.

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Government Agencies - This service sector involves Federal, state and local government agencies that perform services related to cargo handling and vessel operations at the Port. U.S. Customs, Bureau of Immigration, U.S. Department of Labor, U.S. Department of Agriculture, and U.S. Department of Commerce employees are involved. In addition, both civilian and military personnel with the U.S. Coast Guard and the U.S. Army Corps of Engineers have been included. Finally, the marine portions of the city police and fire departments are part of this category.

2.3 Shippers/Consignees Two categories of shippers and consignees are considered in the analysis: those that are totally dependent on the Port of Baltimore and located in proximity to the Port with private marine terminals, and those located throughout the State of Maryland and other states whose business is only related to the Port of Baltimore. Those in the first category would most likely shut down operations if the Port of Baltimore were not available for their use, while those in the second category would ship or receive materials via another port. Because of this difference, employment with shippers/consignees dependent upon the Port is counted in the direct employment. Employment with shippers/consignees in the second category is considered port-related, and not included in the direct job impact. 2.4 Maryland Port Administration The Maryland Port Administration (MPA) includes those individuals employed by the State of Maryland whose purpose is to oversee port activity. In addition, the MPA leases terminal space to private operators, and maintains and leases equipment such as container cranes. 2.5 Banking/Insurance/Admiralty Law This sector includes the local financial sector that provides banking, insurance and legal services to the Port of Baltimore Maritime Industry.

3. COMMODITIES INCLUDED IN THE ANALYSIS
A major use of an economic impact analysis is to provide a tool for port development planning. As a port grows, available land and other resources for port facilities become scarce, and decisions must be made as to how to develop the land and utilize the resources in the most efficient manner. Various types of facility configurations are associated with different commodities. For example, automobiles and RoRo cargo require a large area for storage, while forest products require covered storage.

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An understanding of the commodity's relative economic value in terms of employment and income to the local community, the cost of providing the facilities and the relative demand for the different commodities is essential in making future port development plans. Because of this need for understanding relative commodity impacts, economic impacts are estimated for the following commodities handled via public and private facilities at the Port of Baltimore: • • • • • • • • • • • • • Containerized cargo; Automobiles; RoRo cargo (agricultural equipment and heavy construction machinery); Iron and Steel products; Paper; Pulp; Lumber; Other breakbulk cargo (excluding pulp, paper, iron and steel products); Coal/Coke; Iron ore; Other dry bulk; Petroleum; and Other liquid bulk.

4. DATA COLLECTION
The resulting economic impacts are based on a telephone survey of members of each of the economic sectors. Participants were identified from the Port of Baltimore Marine Services Directories, as well as the database developed by Martin Associates for the 2002 Economic Impact Study of the Port of Baltimore. Telephone interviews were used to achieve a 100 percent coverage in all categories. The number of interviews, by category, is shown in Exhibit I-2. Secondary data sources include the following U.S. Bureau of Census publications: • • • • Census of Wholesale Trade; Census of Retail Trade; Census of Construction; and Census of Service Industries Annual Survey of Manufacturers.

Other published data included U.S. County Business Patterns and U.S. Bureau of Labor Statistics, Consumer Expenditure Survey. Indirect impacts and related user impacts were estimated using the US Bureau of Economic Analysis, Regional Input-Output Model for the State of Maryland. This model has been designed to update the port impact assessment on an annual basis, as well as to evaluate the incremental impacts due to changes in commodity tonnage, labor 14

productivity, labor work rules, vessel calls (by type of vessel), pilotage and tug assist assumptions. Also, the model is designed to evaluate the impacts of new facilities development and new ocean carrier service. Because the analysis is based on a 100 percent coverage of the maritime community serving the Port of Baltimore, the baseline results are highly reliable, and the direct impacts can be identified at the individual firm level. Since the resulting economic impact model is based on the economic relationships derived from the survey results, the incremental impacts estimated by the model have the same degree of reliability as the baseline measures. Exhibit I-2 Summary of Interviews

Lines/Agents Government Container Repair/Leasing Divers/Ship Repair/Construction Tug & Barge Operators Pilots Warehouse & CFS Marine Surveyors Chandlers Bunkering Banking/Insurance/Law ILA Freight Forwarders Maritime Services Railroads Railroad Consolidators Stevedores/Terminal Operators TOTALS

77 22 10 22 9 1 128 30 52 4 29 1 25 39 5 7 40 501

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II. EMPLOYMENT IMPACTS
In this chapter, the employment generated as a result of calendar year 2006 port and maritime activity is estimated. The chapter is organized as follows: • First, the total employment that is in some way associated with the activities at the Port is estimated. This employment impact includes the direct, induced, indirect and related job impacts described in the previous chapter. Second, the direct job impact is analyzed in four ways: - Direct jobs are estimated in terms of the surface transportation sector, maritime services sector, shippers/consignees sector and the Maryland Port Administration sector. Direct jobs are distributed throughout the State of Maryland by place of residence of those holding the jobs. Direct jobs are estimated for each of the key commodity groups. Direct jobs are estimated on a per 1,000 ton basis.

•

• •

Thirdly, the induced and indirect job impacts are described. Finally, related jobs with users of the Port of Baltimore are analyzed.

1. TOTAL EMPLOYMENT IMPACT
About 50,186 jobs in Maryland are supported, either directly or indirectly, by the cargo and vessel activity at the Port of Baltimore in 2006. These 50,186 jobs include direct jobs, induced and indirect jobs: • 16,493 are direct jobs, in that these jobs are generated by activities at the Port, and if such activities should cease, these jobs would be discontinued over the short term. It is these jobs that are most directly dependent upon the Port of Baltimore.5 Of the 16,493 direct jobs, the

Of the four job impact measures (direct, induced, indirect and related), the accuracy of the estimate is greatest for the direct jobs, since these jobs are based on the survey of the 500 firms in the Baltimore Maritime Community. The induced jobs are based on an estimate of the local consumption expenditures by those directly employed, and indirect jobs are based on an estimate of the local purchases by the port-dependent firms. The related jobs are based on the value of exports and imports multiplied by the jobs to value of output ratios developed from the US Bureau of Economic Analysis.

5

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public facilities account for 6,775 direct jobs, while the private terminals generate 9,718 direct jobs. • 19,532 are induced jobs, or those jobs supported by the local purchases made by the 16,493 individuals holding the direct jobs due to port activity. Should the direct jobs be lost from the economy, the induced jobs supporting the purchases of the direct jobs would also be lost. The MPA facilities account for 7,497 induced jobs, with private terminals accounting for the balance, 12,035 induced jobs. In 2006, the firms dependent upon the Port of Baltimore made $1.3 billion in local purchases for office supplies, equipment, utilities, communications, maintenance and repair services, transportation services, professional services, and goods and services. These purchases supported 14,161 indirect jobs in the Maryland economy. Firms directly dependent upon the MPA facilities spent $220.4 million for local purchases of goods and services, supporting 2,146 jobs. The firms directly dependent upon the private marine terminals made $1.1billion of local purchases supporting 12,016 indirect jobs. In addition to the direct, induced and indirect job impacts, there are a total of 250,122 direct, induced and indirect jobs in Maryland related to the Port of Baltimore. Of these related jobs, 68,307 are directly related to the cargo activity at the Port of Baltimore, while the balance support induced and indirect jobs. These jobs are considered to be related to activities at the Port, but the degree of dependence on the Port is difficult to estimate. If the Port of Baltimore were not available to these organizations, they would suffer an economic penalty over the longer term. Such a penalty would vary from a loss of employment opportunities in some cases to an increase in total transportation costs in other cases, which could, in turn, result in employment reductions. The next section of this chapter is dedicated to the impacts of 16,493 direct jobs.

•

•

2. DIRECT JOB IMPACTS
As a result of port activity, 16,493 full-time jobs for Maryland residents were directly supported.6 In this section the jobs are analyzed in terms of: • • • •
6

Distribution by economic sector; Distribution by place of residence; Distribution by commodity group; and Distribution per 1,000 tons.

Based on the number of hours worked annually in each category, the total person hour impact for that category was converted into full-time equivalent jobs. For example, two persons who are involved only 50% of the time within Port activity are counted as one full-time job.

17

These distributions are developed in more detail below. 2.1 Direct Job Impacts by Sector Exhibit II-1 presents the distribution of the 16,493 direct jobs among the following economic sectors and the subsector job categories. Furthermore, the exhibit shows the direct job distribution for public and private terminals. Of the 6,775 direct jobs generated by the MPA activity, the majority, 1,648 jobs are with members of the International Longshoremen’s Association, followed by 1,376 jobs with truckers moving cargo to and from the MPA marine terminals. Another 1,006 jobs are with firms providing marine construction. With respect to the direct jobs created by the private marine terminals 3,269 jobs are with dependent shippers located in proximity to the Port. For the most part, these importers and exporters have their own docks and include the Mittal steel operations at Sparrows Point, Domino Sugar, and the wall board manufacturers who receive gypsum over private terminals. In addition to the dependent shippers/consignees using the private terminals, 2,234 trucking jobs are created by the movement of cargo over the private docks, and 1,190 jobs with terminal employees of the private bulk terminals and steel terminals are supported in the local economy. Exhibit II-1 Distribution of Direct Employment Impact by Economic Sector and Job Category
PUBLIC TERMINALS SURFACE TRANSPORTATION RAIL TRUCK MARITIME SERVICES TERMINAL EMPLOYEES ILA/DOCKWORKERS TUG ASSISTS PILOTS AGENTS MARITIME SERVICES FORWARDERS WAREHOUSE CONTAINER REPAIR/STORAGE GOVERNMENT MARINE CONSTRUCTION/ SHIPYARDS BARGE SHIPPERS/CONSIGNEES PORT AUTHORITY BANKING/INSURANCE/LAW TOTAL 72 1,376 582 1,648 25 30 103 74 288 900 86 266 1,006 4 NA 294 23 6,775 PRIVATE TERMINALS 585 2,234 1,190 503 36 44 45 250 20 119 0 1,062 224 47 3,269 NA 90 9,718 TOTAL

657 3,610 1,772 2,151 62 75 148 324 307 1,019 86 1,327 1,230 50 3,269 294 112 16,493

Totals may not add due to rounding.

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2.2 Direct Job Impacts by Residency Exhibit II-2 demonstrates the Port's geographical impact in the State of Maryland. As this exhibit indicates, overall about 51% live in Baltimore City followed by 18% living in Baltimore County. With respect to employees directly supported by the activity at the MPA terminals, 43% reside in Baltimore City and 24% reside in Baltimore County. Furthermore, for the private terminal operations, nearly 56% reside in Baltimore City, with about 14% residing in Baltimore County. Exhibit II-2 Distribution of Direct Jobs by Place of Residence
JURISDICTIONS ANNE ARUNDEL BALTIMORE CITY BALTIMORE COUNTY HARFORD COUNTY HOWARD COUNTY OTHER MARYLAND OTHER TOTAL PUBLIC PUBLIC SHARE DIRECT JOBS 12.53% 849 43.12% 2,921 23.75% 1,609 7.67% 520 1.63% 110 8.04% 544 3.27% 221 100.00% 6,775 PRIVATE PRIVATE SHARE DIRECT JOBS 10.94% 1,063 56.29% 5,470 13.79% 1,340 9.63% 936 1.25% 121 4.30% 417 3.80% 369 100.00% 9,718 TOTAL TOTAL SHARE DIRECT JOBS 11.59% 1,912 50.88% 8,391 17.88% 2,950 8.83% 1,456 1.41% 232 5.83% 962 3.58% 591 100.00% 16,493

Totals may not add due to rounding.

2.3 Direct Job Impacts by Commodity Most of the 16,493 direct jobs can be associated with the handling of specific commodities or commodity groups. Certain employment categories such as shipyards, state, Federal and local government agencies, the MPA, and the banking, insurance and legal sector are extremely difficult to assign to specific commodity groups, and if such an assignment is made, it is often done arbitrarily. As a result, direct jobs generated by port activity in shipyards, government agencies, the MPA and with banks, law firms and insurance companies (which totaled 2,986 jobs) are not allocated to commodity groups. In the remainder of this section, the number of employees that were assigned to commodity groups is detailed. Exhibit II-3 indicates that containerized cargo generated the greatest number of direct jobs port-wide, followed by other breakbulk cargo. With respect to the MPA facilities, 1,594 direct jobs were with sectors of the economy that could not be allocated to a specific commodity. For the balance of the direct jobs, containerized cargo generated the largest number of direct jobs, 2,454 jobs, followed by 783 direct jobs with other breakbulk cargo and 766 jobs with auto operations and 505 jobs with RoRo operations. Paper moving via the MPA facilities created 378 direct jobs, followed by 140 direct jobs with pulp imports.

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Exhibit II-3 Distribution of Direct Job Impact by Commodity
PUBLIC 2,454 53 505 766 53 378 140 783 NA NA NA NA 49 1,594 6,775 PRIVATE 24 59 0 392 35 NA NA 1,575 1,527 2,044 1,832 611 226 1,392 9,718 TOTAL 2,478 112 505 1,157 88 378 140 2,358 1,527 2,044 1,832 611 275 2,986 16,493

CONTAINERS STEEL RO-RO AUTOS LUMBER PAPER PULP OTHER BREAKBULK COAL OTHER DRY BULK IRON ORE PETROLEUM/LNG OTHER LIQUID BULK NOT ALLOCATED TOTAL
Totals may not add due to rounding.

General cargo commodities -- containerized cargo, autos, RoRo, steel and forest products, and other breakbulk cargoes -- handled at the Port of Baltimore tend to generate the greatest direct job impact with firms in the maritime service sector. The direct maritime service sector jobs generated by containerized cargo are with longshoremen, freight forwarders/ customshouse brokers, warehouses, and steamship agents, as well as with trucking firms and railroads in the surface transportation sector. The jobs generated by miscellaneous breakbulk commodities and forest products are concentrated with longshoremen, while the job impacts generated by steel imports are concentrated with local trucking firms. Jobs generated by autos are concentrated with terminal operators and auto processing companies. Relatively small direct impacts are registered with chandlering firms due to the short length of time that general cargo vessels typically spend in port (and thus have only limited time to purchase ship stores). In contrast, the majority of direct jobs generated by bulk commodities are concentrated with dependent shippers/consignees, followed by impacts in the surface transportation sector. Within the maritime service sector, the direct job impact from handling bulk cargo is concentrated with private terminal operators, who also provide warehousing services for dry bulk cargoes. The impact of bulk cargo on longshoremen is relatively small, as most bulk terminals are privately owned and hire their own employees to load or unload vessels, and bulk cargo handling is not labor intensive. These generalizations concerning the distribution of the direct jobs by detailed category also apply to the distribution of the direct income and revenue impacts. 20

A description of the distribution of the direct job impacts associated with each commodity is provided in the remainder of this section. The major direct job impacts by category are highlighted for each commodity. 2.3.1 Containerized Cargo

In 2006, 5.7 million short tons of containerized cargo, or 412,648 containers (both full and empty) passed through facilities at the Port of Baltimore, creating 2,478 direct jobs. The majority of the jobs are with firms in the maritime service sector. Within the maritime service sector, jobs are concentrated with the longshoremen category (744 jobs), warehousing (677 jobs), and with freight forwarder/customhouse brokers (266 jobs). There are 520 jobs created in the surface transportation sector and the majority of these jobs are in the trucking industry, which reflects the use of trucks in moving containerized cargo to and from the Port of Baltimore. 2.3.2 Iron and Steel Products

In 2006, 330,000 tons of non-containerized breakbulk iron and steel products moved via the Port of Baltimore, creating 112 direct jobs. The majority of these tons moved via the private terminals operating in the Port District. Forty-seven of the direct jobs were created with local trucking firms moving the steel to inland consumers. 2.3.3 Forest Products

The 1.2 million tons of non-containerized breakbulk forest products moving via the Port of Baltimore in 2006 consisted of paper (58%), pulp (30%) and lumber (12%), and created 607 direct jobs. Two hundred ninety-seven of the jobs were created with the longshoremen and the terminal operations, followed by 258 jobs with the trucking firms and rail operations moving this commodity to the customers. 2.3.4 Other Breakbulk Cargoes

About 1.7 million tons of miscellaneous breakbulk cargo commodities were handled at the Port in 2006, of which 311,000 tons were handled at the public MPA terminals and 1.4 million tons at private terminals. The majority of the 2,358 direct jobs created by other breakbulk cargo are created with trucking firms and dockworkers, both ILA and non-ILA. 2.3.5 Automobiles

The Port of Baltimore has become a leading port in handling import and export automobiles. In 2006, 423,600 import and export automobiles were handled at the Port of Baltimore, generating 1,157 direct jobs. The auto processing operations leased from the MPA handled about 322,933 cars, and the balance moved via private terminals. Of the 1,157 direct 21

jobs generated by automobile and truck imports and exports, the jobs are concentrated with terminal operations/auto processing, the ILA and local trucking. The auto processors also handle domestic autos at the port facilities, and the impacts of these domestic autos have also been included. 2.3.6 RoRo Cargo

The Port of Baltimore handles approximately half of all the RoRo cargo that crosses the docks of U.S. East Coast ports. Nearly all of the 46,925 units of RoRo cargo handled in the Port in 2006 moved via the MPA facilities. The RoRo cargo consists mainly of agricultural equipment and construction equipment and supported 505 jobs. These jobs are concentrated with terminal operators, ILA and trucking firms handling the RoRo cargo. 2.3.7 Coal and Coke

Nearly 13.5 million short tons of coal and coke were moved via Baltimore, generating 1,527 direct jobs in the surface transportation sector and maritime service sector. The majority of the jobs are with the local steel production operations consuming the coal, followed by more than 500 jobs with the railroads moving the coal from the mines to export. 2.3.8 Other Dry Bulk Cargo

The other dry bulk cargo category consists of ores (other than iron ore), gypsum, sugar, salt, chemicals, and solid fertilizers. About 5.0 million short tons of these cargoes were handled at the Port, creating 2,044 full-time direct jobs. These jobs are mostly with shippers/consignees dependent on the use of the Port of Baltimore, and terminal operators associated with the dependent users. Interviews with the shippers/consignees having proprietary dry bulk terminals were used to determine the fraction of each firm's workforce that was dependent on port receipts. In several cases, firms responded that they would cease operations completely if the Port were not available for their use. For these firms, all employees are counted as part of the direct job impact. More than 500 jobs are generated in the surface transportation sector. The fact that trucks are used to a much greater extent than rail in the distribution of other dry bulk products (primarily gypsum products, ores and sugar) is reflected in the composition of the surface transportation impact; nearly 98 percent of the transportation jobs generated by other dry bulk cargo are with truckers, primarily local truckers. 2.3.9 Iron Ore

The receipt of about 4.3 million short tons of iron ore generated 1,832 direct jobs. For the most part, this ore is off-loaded directly at the Mittal ore pier at Sparrows Point. The majority of these jobs are employed by the dependent shipper/consignee, Mittal, formerly the International Steel Group. The direct jobs with Mittal are also distributed over the imported 22

coal/coke cargo and the other dry bulk cargo, based on interviews with Mittal in terms of allocating employment to cargo types. 2.3.10 Liquid Bulk Products

The liquid bulk products consist primarily of petroleum products, chemicals, molasses and liquid fertilizers. About 1.3 million foreign tons of these commodities were handled at the Port and created 275 direct jobs. The majority of these direct jobs are with local trucking firms, followed by jobs with terminal operators. 2.4 Direct Job Impacts per 1,000 Tons The assessment of the direct job impacts on a per 1,000 ton basis provides a tool for port planners to use in evaluating the relative importance of different commodities as economic generators. Exhibit II-4 presents the job impacts per 1,000 tons for each commodity moving via the Port of Baltimore. As this exhibit indicates, with the exception of iron ore, the general cargo commodities generate larger direct job impacts per 1,000 tons than do bulk cargoes, which reflects the more labor intensive handling process required to load and off-load general cargo commodities (forest products, other breakbulk cargo, automobiles and containers). These general cargo commodities also make a more intensive use of the maritime service infrastructure (use of agents, forwarders and warehousing services) than bulk commodities. The relatively high impact per 1,000 tons of other dry bulk and iron ore reflects the dependency upon the Port by Mittal Steel located at Sparrows Point as well as Domino Sugar and the two gypsum plants manufacturing wallboard.

Exhibit II-4 Job Impacts per 1,000 Tons

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CONTAINERS STEEL RO-RO AUTO LUMBER PAPER PULP OTHER BREAKBULK COAL OTHER DRY BULK IRON ORE PETROLEUM/LNG OTHER LIQUID BULK

PUBLIC 0.43 0.40 0.63 1.49 0.79 0.55 0.40 2.51 NA NA NA NA 0.19

PRIVATE 0.53 0.30 NA 2.44 0.48 NA NA 1.16 0.11 0.41 0.42 0.09 0.22

PORT-WIDE 0.43 0.34 0.63 1.71 0.63 0.55 0.40 1.41 0.11 0.41 0.42 0.09 0.21

The importing and exporting of autos generate the greatest impact per 1,000 tons, followed by the handling of other breakbulk cargo, RoRo cargo, and lumber. The high job impact per 1,000 tons for automobiles reflects the labor intensive import servicing operations and export preparations conducted at the Port, the reliance on trucks for import distribution, and the labor intensive vessel off-loading and loading process. The relatively high job impact per 1,000 tons for breakbulk cargoes reflects the highly labor intensive nature of vessel loading and discharging operations associated with breakbulk cargo. It is to be emphasized that these jobs per 1,000 ton ratios reflect only the current situation and should not be used to estimate new impacts as the result of increases or decreases in tonnage. The direct impacts do not change in direct proportion to tonnage changes. Some jobs reflect changes in vessel calls, while other jobs are driven by tonnage. Still other jobs are fixed and do not reflect changes in throughput or vessel calls.

3. INDUCED JOBS
The in-state purchases by the 16,493 direct job holders with the direct income earned from port activity create induced jobs throughout Maryland. In 2006, $788.0 million dollars of wages and salaries were received by those 16,493 individuals holding direct jobs created by activity at the Port of Baltimore. As the result of the respending of a portion of this income for purchases in the State of Maryland, 19,532 induced jobs were generated throughout the state. These induced jobs are estimated based on the current expenditure profile of residents in the Baltimore area, as estimated by the U.S. Bureau of Labor Statistics, Consumer Expenditure Survey. This survey indicates the distribution of consumer expenditures over key consumption categories for Baltimore area residents. The estimated consumption expenditure generated as a result of the respending impact is distributed across these consumption categories. Associated with each consumption category are the 24

relevant retail and wholesale industries. Jobs to sales ratios in each industry are then computed for the Baltimore Metropolitan Statistical Area, and induced jobs are estimated for the relevant consumption categories. It is to be emphasized that induced jobs are only estimated at the retail and wholesale level, since these jobs are most likely generated in the Baltimore area and the State of Maryland. Further levels of induced jobs are not estimated, since it is not possible to accurately identify geographically where the subsequent rounds of purchasing occur. The Consumer Expenditure Survey does not include information to estimate the job impact with supporting business/financial services, legal, social services and educational services, as well as state and municipal and county government agencies. To estimate this induced impact, a ratio of State of Maryland employment in these key service industries and government agencies to total state employment is developed. This ratio is then used with the direct and induced consumption jobs to estimate induced jobs with business/financial services, legal, social services, educational services and state and local government agencies.

4. INDIRECT JOBS
Indirect jobs are those jobs supported in the state economy as the result of local purchases by the firms directly engaged in Port activity in Baltimore. Based on the survey of port tenants and service providers, a total of $1.3 billion of local purchases were made by the Port dependent industries. These purchases were for goods and parts, office supplies, communications and utilities, repair and maintenance services, non-port related transportation services, etc. The local purchases were then multiplied by the respective jobs to value of output coefficients for the supplying industries within the State of Maryland, as developed for this study by the U.S. Bureau of Economic Analysis, Regional Input-Output Modeling System, for the State of Maryland. These indirect jobs multipliers indicate the second and third order spin-off impacts associated with delivery of a good or service in the State of Maryland. Using the local purchases derived from the surveys and the indirect employment coefficients derived from the Bureau of Economic Analysis, it is estimated that 14,161 indirect jobs were also supported in the state due to the $1.3 billion of local purchases by Port-dependent firms.

5. RELATED JOBS
It is estimated that about 250,122 jobs with Maryland companies using the Port to ship and receive waterborne cargo are classified as related to the public and private marine terminals. Of these jobs, 68,307 are directly related to the cargo moving via the Port. These jobs are with importers of steel, forest products (paper, pulp, lumber), producers and consumers of containerized cargo and breakbulk cargo, and consumers of the gypsum, ore, coal and coke moving through the public and private marine terminals. The balance of the related jobs, 181,815, are induced and

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indirect jobs that support the direct production of the export cargo or the use of the intermediate products and final consumption goods. To estimate the related user impact of the Port of Baltimore, the types of containerized cargo moving via the Port were identified from US Maritime Administration (MARAD), Foreign Waterborne Trade Statistics. The average value per ton of each commodity type was then estimated using the MARAD Waterborne Foreign Trade Statistics. A weighted average dollar value per ton of containerized cargo moving via the Port of Baltimore was developed from this data. Next, for each of the top containerized cargo commodities (accounting for 75% of the value of export and import containerized cargo moving via the Port of Baltimore), a producing industry for export commodities and a consuming industry (for intermediate and raw material inputs) for imported commodities were identified from the US Bureau of Economic Analysis, RIMS II data base. For consumer imports, the retail sales margin was used to adjust the value of imported consumer goods via the Port of Baltimore. For imported raw materials and intermediate inputs, the consuming industry was first identified. Next, for each industry, the ratio of value of inputs to the value of output was developed from US Census of Manufacturing, 2002, Industry Series. This ratio was used to adjust the associated employment multiplier for a containerized imported raw material or intermediate input. Using this methodology, the job multiplier associated with each containerized import or export commodity was then weighted by the value of the associated containerized import or export commodity moving via the Port of Baltimore to develop a weighted average job multiplier for imported and exported containerized cargo commodities. The value of containerized cargo imported and exported via the Port of Baltimore was then estimated using the weighted average value per ton for containerized export and import cargo. To estimate related container jobs in Maryland, these values were then multiplied by the weighted average job multipliers developed for exported and imported containerized cargo. The related jobs were then adjusted by the share of imported and exported containerized cargo estimated to be consumed or produced in the State. A similar method was used to estimate jobs related to steel imports, forest products, coal, ore and other dry bulk cargoes. For breakbulk cargoes, the associated consuming and producing industries were identified with each commodity. For example, for imported steel, a relationship was developed to convert the dollar value of these imported materials into a dollar value of output in the key consuming industries, which include construction and metal fabrication industries. Relationships between the values of inputs to the value of outputs in these industries were estimated using data from the U.S. Bureau of Census, Census of Manufacturing and Census of Construction. These ratios were then used to convert the dollar value of the imported breakbulk cargoes into a dollar value of output in the consuming industries in the state. Using the respective jobs to value of output multipliers for these industries from the RIMS II model, the value of the breakbulk cargoes (i.e., steel products), moving via the Port and remaining in (or produced in) the State of Maryland was converted into related shipper/consignee jobs with these users and associated supporting industries within the State. Finally, the direct, induced and indirect port sector job impacts associated with each of the cargoes for which related shipper/consignee jobs were estimated were subtracted from the total related jobs (by commodity and cargo type) to avoid double counting, as the related 26

shipper/consignee jobs include job impacts at each stage of handling the imported and exported cargo, such as the port activity, distribution center activity, and the trucking and rail activity to move the cargo to and from the Port and the induced and indirect jobs associated with the direct port activity. Also included as related jobs are the job impacts generated at each stage of delivering an export product to the port for export, including raw material purchases, purchases of labor and capital to produce the export product, purchases of supporting services and goods to be used in the production process, the final delivery of the export cargo to the Port of Baltimore, and the induced jobs supporting the directly related jobs. Income and value of output coefficients were developed using a similar methodology to estimate related income and total value of output in the State. These related income and value of output measures are described in the following chapter. It is to be emphasized that these users are related to the Port in that if the Port were not available, these users could ship and receive cargo via other ports. In fact, the majority of these users currently use multiple ports for export and import, especially those moving containerized cargo through the Port. Furthermore, the level of employment with the related users is driven by the demand for the products produced by these firms, and not by the provision of cargo handling or vessel support services at the Port of Baltimore.

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III. REVENUE, PERSONAL INCOME AND TAX IMPACTS
The movement of cargo via the Port of Baltimore generates revenue throughout the state and national economies. For example, revenue is received by the surface transportation firms (both railroads and trucks) as a result of moving export cargo to the Port and distributing the imported commodities inland after receipt at the Port. The firms in the maritime service sector receive revenue from arranging for transportation services, cargo handling, providing services to vessels in port and repairs to vessels calling the Port. The Maryland Port Administration (MPA) receives revenue from terminal and equipment leases at Dundalk Marine Terminal, Clinton Street Pier 1, Seagirt, Masonville, North and South Locust Point Terminals, and from the World Trade Center. In addition, revenue is received by shippers/consignees from the sales of cargo shipped or received via Baltimore and from the sales of products made with raw materials received through the Port. The revenue generated by port activity consists of many components. For example, gross revenue is used to pay employee salaries and taxes, it is distributed to stockholders, and it is used for the purchases of equipment and maintenance services. Of these components, only three can be isolated geographically with any degree of accuracy. These are the personal income component of revenue, which can be traced to geographic locations based on the residence of those receiving the income, the state and local tax impacts, and the local purchases made by the firms directly dependent on the Port of Baltimore. The direct personal income impact within the state accounts for about 43 percent of the total revenue generated by the Port activity in 2006. The balance of the revenue is distributed in the form of payments to firms providing goods and services to the five sectors, for the distribution of company profits to shareholders and to payment of state, local, and Federal taxes. Many of these firms and owners are located outside of Maryland, and, thus, it is difficult to trace the ultimate location of the distributed revenue (other than personal income and taxes). Since it is difficult to trace the revenue beneficiaries, an estimate of revenue is developed, but no conclusions are formulated as to how the revenue (other than personal income, taxes and local purchases by firms) is distributed, geographically. The distribution of personal income and the income from indirect jobs supported by the local purchases can be traced accurately through the geographic location of individuals receiving the income. The value of output created by users of the Port is measured for the State of Maryland and the local purchases from other firms within the region are also included in this user output measure, as defined by the in-state output coefficients (for the user industries) developed from the U.S. Bureau of Economic Analysis, Regional Input-Output Modeling System (RIMS II).

1. TOTAL ECONOMIC ACTIVITY
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The revenue impact is a measure of the total economic activity in the state that is generated by the cargo moving via the Port of Baltimore. In 2006, marine cargo activity at the Port generated a total of $52.8 billion of total economic activity in the State. Of the $52.8 billion, $1.9 billion is the direct business revenue received by the firms directly dependent upon the Port and providing maritime services and inland transportation services to the cargo handled at the marine terminals and the vessels calling the port. In addition, $1.3 billion of in-state purchases are also part of the total economic value of the Port. The remaining $49.7 billion represents the value of the output to the State of Maryland that is created due to the cargo moving via the Port of Baltimore. This includes the value added at each stage of producing an export cargo, as well as the value added at each stage of production for the firms using imported raw materials and intermediate products, as well as consumer products that flow via the marine terminals at the Port of Baltimore and are consumed by industries and individuals within the region. The balance of the discussion focuses on the $1.9 billion of direct business revenue generated from the provision of services to the cargo and vessels handled at the Port of Baltimore public and private marine terminals.

2. DIRECT BUSINESS REVENUE IMPACT
Exhibit III-1 presents the total revenue ($1.9 billion) estimated to have been generated by port activity in 2006 both at public and private terminals.

Exhibit III-1 Total Revenue Generated by Port Activity (Thousands) 29

PUBLIC TERMINALS SURFACE TRANSPORTATION RAIL $115,951 TRUCK $178,434 MARITIME SERVICES TERMINAL EMPLOYEES $205,216 ILA/DOCKWORKERS TOWING $6,875 PILOTS $21,172 AGENTS $1,724 MARITIME SERVICES $19,364 FORWARDERS $44,612 WAREHOUSE $143,734 CONTAINER REPAIR/STORAGE $16,228 GOVERNMENT NA MARINE CONSTRUCTION/ SHIPYARDS $176,132 BARGE $732 SHIPPERS/CONSIGNEES NA PORT AUTHORITY $47,212 BANKING/INSURANCE/LAW $9,474 TOTAL $986,861

PRIVATE TERMINALS $246,858 $156,409 $241,344 $10,961 $29,532 $3,246 $64,179 $3,072 $19,108 $0 NA $42,266 $9,006 NA NA $37,880 $863,859

TOTAL $362,809 $334,843 $446,560 $17,836 $50,703 $4,970 $83,543 $47,684 $162,842 $16,228 NA $218,398 $9,738 NA $47,212 $47,354 $1,850,721

Totals may not add due to rounding. Dockworkers/ILA revenue included with terminal operators. shippers/consignees.

No revenue was estimated for the dependent

The MPA facilities generate $986.9 million of the revenue impact compared to $863.9 million generated by cargo and vessel activity at the private terminals. The largest revenue impact created by the MPA terminals was with stevedores and terminal operators, followed by revenue received by the trucking industry serving the MPA terminals, and revenue received from marine construction and ship repair work. For the activity at private terminals, railroads received the largest revenue impact, primarily from the transport of coal and other bulk cargoes, followed by revenue received by trucking companies and then maritime services. It is to be emphasized that commodity value and gross revenue from the sales of products moving via the Port of Baltimore are not included as part of the revenue impact, since the value of the cargo and level of product sales is determined by the demand for the product, not by the use of the Port of Baltimore. This value is included in the economic value of output of the Port to the State -- $49.7 billion. Exhibit III-2 shows the total revenue impact by commodity and Exhibit III-3 presents the revenue per ton. These Exhibits show that: • • In terms of total revenue, containerized cargo generates the greatest revenue impact at the Port, followed by autos. Coal/coke, iron ore and other dry bulk cargoes such as sugar, gypsum, and salt also generate significant revenues for the port. In terms of revenue per ton, automobiles, breakbulk cargo, containers, pulp, and RoRo cargo generate the greater revenue impacts per ton, reflecting the higher value added associated with the handling of general cargo commodities. 30

Exhibit III-2 Revenue Impacts by Commodity (Thousands of Dollars)
CONTAINERS STEEL RO-RO AUTO LUMBER PAPER PULP OTHER BREAKBULK COAL OTHER DRY BULK IRON ORE PETROLEUM/LNG OTHER LIQUID BULK NOT ALLOCATED TOTAL Totals may not add due to rounding. PUBLIC $422,611 $5,207 $49,486 $167,924 $2,804 $33,724 $22,352 $37,827 PRIVATE $4,622 $7,890 $94,780 $3,029 TOTAL $427,233 $13,097 $49,486 $262,705 $5,833 $33,724 $22,352 $140,625 $250,512 $85,590 $32,984 $153,895 $56,380 $316,304 $1,850,720

$11,440 $233,486 $986,861

$102,798 $250,512 $85,590 $32,984 $153,895 $44,940 $82,817 $863,859

Exhibit III-3 Revenue per Ton PORT-W IDE CO NT AINERS $75 STEEL $40 RO -RO $61 AUT OS $389 LUMBER $42 PAPER $49 PULP $64 OTHER BREAKBULK $84 CO AL $19 OTHER DRY BULK $17 IRON ORE $8 PETROLEUM $24 OTHER LIQUID BULK $44 In the next section of this chapter, the personal income impacts of the Port are described.

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3. PERSONAL INCOME IMPACTS
In the previous section of this chapter, the total revenue generated by port activity was identified. As described earlier, the personal income received by those directly dependent upon port activity is one of three components of revenue that can be traced to the State of Maryland with a high degree of accuracy. The income impact is estimated by multiplying the average annual earnings of each port participant, i.e., railroad employees, truckers, steamship agents, freight forwarders, bankers, insurance agents, etc., by the corresponding number of jobs in each category. The individual annual earnings in each category multiplied by the corresponding number of employees resulted in $788.0 million in personal income, for an average annual salary of about $47,780 per year for each job directly generated by maritime activity at the Port of Baltimore. Based on data developed by the U.S. Bureau of Economic Analysis, Regional Input Output Multiplier System (RIMS II), for every one dollar earned by Maryland residents holding the direct jobs as a result of port activity, an additional $2.95 of income and consumption expenditures would be created as a result of respending the income for purchases of Maryland-produced goods and services. Hence, an income multiplier of 3.95 was used to estimate the re-spending/consumption impact of $2.3 billion. This additional respending of the direct income supports the 19,532 induced job impact, described in the previous chapter.7 In addition to the re-spending impact, income was also received by those individuals indirectly employed due to activity at the Port of Baltimore. The 14,161 indirectly employed workers received wage and salary income of $516.9 million. Therefore, the total personal income and consumption impact of the Port of Baltimore is estimated at over $3.6 billion in the year 2006. Finally, it is estimated that the 250,122 direct, induced and indirect related users earned $11 billion of total personal income.

4. TAX IMPACTS
The state and local taxes for which estimates have been developed include: • State taxes, including personal and corporate income tax, state sales and use taxes, motor fuel tax, vehicle registration tax, death tax, property tax and property transfer tax,

The respending effect includes personal income as well as consumption expenditures, which are distributed as business revenue to companies. Furthermore, the induced jobs are only estimated at the retail and wholesale level, and additional rounds of induced jobs are not estimated in order to ensure a very conservative estimate of the resulting impacts. Therefore, the respending effect cannot be divided by the induced job impact to yield an average induced income, as this would highly overstate personal earnings received by the induced employees.

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recordation tax, shellfish tax, horse racing tax, telecommunication tax, boating tax, and other miscellaneous taxes. • • County taxes including property and income tax, and licensing and permit taxes. Municipal taxes including the local share of the state and county income and property taxes allocated to the local level.

In total, port activity created $388.4 million of state and local taxes. These state and local tax impacts are based on a per capita income basis, from data estimated for the State of Maryland by the Tax Foundation. The tax impacts include taxes collected at the state, county and local levels throughout the State. Exhibit III-4 presents the breakdown of the $388.4 million of state and local taxes based on the direct, induced and respending and indirect income impacts. Of the $388.4 million of state and local taxes, $211.5 million are received by the State of Maryland, while $176.9 million are received by the county and local governments in the state. Exhibit III-4 Composition of Direct, Induced and Indirect State and Local Taxes ($1,000) Tax State County/Local Total Property $5,331 $100,428 $105,759 Sales and Gross Receipts $91,824 $5,365 $97,188 Personal Income $91,927 $57,446 $149,373 Corporate Income $7,023 NA $7,023 License $8,519 NA $8,519 $13,664 $20,496 Other $6,832 Total $211,456 $176,902 $388,358
Totals may not add due to rounding.

The cargo activity at the Port of Baltimore generated $1.2 billion of state and local taxes with the related users.

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IV. COMPARISONS WITH 2002 IMPACTS
The purpose of this chapter is to provide a comparison of the 2006 economic impacts generated by the public and private marine terminals at the Port of Baltimore with the impacts generated by maritime activity at the Port in 2002. The methodology used by Martin Associates to measure the direct local and regional economic impacts generated by the Port in 2006 is, for the most part, identical to the methodology used to measure the direct impacts generated by maritime activity at Baltimore in 2002. There are several other methodology and structural changes to the analysis, particularly for indirect, induced and related impacts, which are discussed in the following section.

1. METHODOLOGICAL CHANGES
The basic methodology used to measure the 2002 economic impacts is the same as that used by Martin Associates for this current study, with the following exceptions. In 2006, the personal income multiplier used to estimate the re-spending impact has been updated by the U.S. Bureau of Economic Analysis for the State of Maryland -- in 2000, the income multiplier was estimated by the Bureau of Economic Analysis for the entire transportation sector in the region. As of 2006, the Bureau of Economic Analysis now provides an estimate of the personal income multiplier for the water transportation sector of the metropolitan region, which more accurately reflects the higher wages and re-spending impact associated with port generated jobs compared to the transportation sector in total, which also includes mass transit, taxis, air and surface transportation sectors. In 2000, the personal income multiplier was 2.0 while in 2006, the income multiplier for the water transportation sector is 3.95, reflecting the higher wages in this sector. As a result, for a given dollar of income, the updated multiplier will generate a much larger induced job impact and greater respending impact. Also included in the 2006 study is an estimate of the total economic impact associated with the cargo moving via the Port, as well as related personal income and related state and local taxes. In past studies, only the related direct job impacts with port users were estimated. In this current study, the related impacts measure the direct, induced and indirect jobs, personal income, total economic value, and related state and local taxes that occur at each stage of production of exports or consumption/use of imported cargo. In previous studies, only the direct related jobs were measured, rather than including induced and indirect jobs supporting the related jobs. For example, for imported consumer containerized goods, the jobs, income, economic activity, and state and local taxes created at the distribution, packaging, and final retail sales stages of the delivery of the imported consumer good to final sales are included in related impacts. Also included are the support activities supplied by other industry sectors to deliver the imported consumer good to final sales. For exported cargo, the jobs, income, value added and state and local taxes associated with producing the export cargo are included in related jobs. This not only includes the direct jobs needed to produce the export cargo, but also all jobs and activities required to support the production of the export good, including goods and services purchased from other industry sectors in the 34

production of the export cargo. As a result of including the impacts of the many stages of production and support industries required to produce an export cargo or use or consume an import cargo moving via the Port of Baltimore, the related jobs are significantly higher than was the case in 2002 when only related direct jobs were counted. The methodology used in the current study provides a more comprehensive measure of the economic value of the cargo moving via the Port of Baltimore to the State of Maryland. The focus on the comparisons should, therefore, be on the direct job impacts, since the same methodology to measure the direct impacts was used both in estimating the impacts in 2002 and in this current study (see Exhibit IV-2).

2. COMPARISON OF TONNAGE ACTIVITY
Exhibit IV-1 shows that cargo tonnage (including some domestic cargo) imported and exported through the Port of Baltimore increased by 11.7 million tons since 2002. As this exhibit further shows, the increase in tonnage was driven by the growth in petroleum products and LNG, coal, containers and breakbulk. The large increase in liquid bulk cargoes reflects the increased movement of LNG handled at a private terminal. There was a loss in imported steel, other dry bulk and iron ore, reflecting the lower level of operations at Mittal Steel. Despite the growth in RoRo tonnage, the number of units reported by the MPA actually remained nearly the same as in 2002, reflecting the handling of larger pieces of equipment. Exhibit IV-1 Tonnage Comparison (1,000 short tons) 2006 CONTAINERS 5,735 STEEL 330 RO/RO& AUTOS 1,483 LUMBER 141 PAPER 683 PULP 349 OTHER BREAKBULK 1,674 COAL 13,528 OTHER DRY BULK 4,964 IRON ORE 4,355 PETROLEUM/OTHER LIQUID BULK 7,723 TOTAL 40,965
Totals may not add due to rounding.

2002 4,369 454 1,062 167 601 434 526 9,646 5,764 5,000 1,267 29,291

Change 1,366 (124) 421 (27) 82 (84) 1,148 3,883 (801) (645) 6,456 11,675

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3. STRUCTURAL CHANGES WITH DEPENDENT SHIPPERS/CONSIGNEES Since 2002, the dependency on the Port of Baltimore by several local shippers/consignees has declined. Employment with local firms importing iron ore fell by nearly 1,100 jobs since 2002, reflecting the downsizing of several of the firms, particularly at the Mittal Steel facility. The following sections of this chapter provide direct comparisons between the 2002 impact study and the results of this current study, starting with a comparison of overall impacts, followed by a comparison of job impacts.

4. COMPARISON OF TOTAL IMPACTS
Exhibit IV-2 shows the total port-wide impacts generated by maritime activity at the public and private facilities at the Port of Baltimore in 2002 and 2006. As this table indicates, the number of direct jobs at the Port of Baltimore increased from 15,740 in 2002 to 16,493 direct jobs in 2006. The key factor driving this increase in direct jobs is the growth in tonnage, particularly the growth of breakbulk and containerized cargo, both cargo types that are relatively labor intensive. As noted, coal, dry bulk cargo and liquid bulk cargo is less labor intensive, and the growth in these bulk cargoes has a lower impact on job growth than the more labor intensive cargoes. Exhibit IV-2 Comparison of Impacts
2006 JOBS DIRECT INDUCED INDIRECT TOTAL PERSONAL INCOME (millions) DIRECT RE-SPENDING INDIRECT TOTAL BUSINESS REVENUE (millions) LOCAL PURCHASES (millions) STATE & LOCAL TAXES (millions)
Totals may not add due to rounding.

2002

Change

16,493 19,532 14,161 50,186

15,740 8,297 8,919 32,956

753 11,235 5,243 17,230

$788 $2,325 $517 $3,630 $1,851 $1,287 $388

$801 $805 $355 $1,961 $1,470 $761 $216

($13) $1,520 $162 $1,669 $380 $526 $172

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Induced jobs increased significantly, but this reflects the change in the method of estimating the income multiplier, which drives the induced jobs. Indirect jobs increased, reflecting the $526 million increase in in-state purchases. Direct personal income declined slightly despite the growth in direct jobs. This reduction in the direct income impact is due to the fact that there was a reduction of 1,100 direct jobs with dependent shippers/consignees. This employment sector is characterized by a relatively high personal income, and hence a loss of more than 1,000 direct jobs in this category reduced the overall average income level, in turn reducing total direct income and the average hourly and yearly earnings. In 2006, the average annual earnings per direct job were $47,780 compared to $50,870 in 2002. Business revenue grew by $380 million, reflecting the growth in cargo tonnage, while the indirect jobs grew by 5,243 jobs, reflecting the $526 million increase in purchases within the State. This increase in local purchases is due to a more comprehensive inclusion of local purchases by private terminals, most notable Mittal, in the 2006 report. State and local taxes also increased as the result of the growth in total direct, induced and indirect personal income and business revenue. Direct related user jobs fell from 79,500 jobs in 2002, to 68,307 related jobs in 2006. This change in direct related users primarily reflects the growth in productivity in manufacturing industries that use imported raw and intermediate products moving via the Port. The U.S. Bureau of Labor Statistics reports that since 2002, productivity (as measured in terms of output produced per labor of hour input) has grown by nearly 10%, suggesting that to produce a given dollar of output, labor hours required would be about 10% less in 2006 than in 2002. 8

5. COMPARISON OF DIRECT JOB IMPACTS
Exhibit IV-3 shows the direct job impacts generated by job category. The growth in containers and breakbulk has contributed to the growth in trucking, warehousing, and ILA/dockworkers directly employed. The major job loss, 1,331 jobs, as stated earlier the report has been with the shippers/consignees – primarily at Mittal Steel. Rail jobs have fallen due to the reduction in iron ore imports, a portion of which is moved by rail to steel mills in Pennsylvania, Ohio and West Virginia. Also, the share of pulp and containerized cargo moved by rail in 2006 has fallen from the levels in 2002. Conversely, the number of direct jobs with the trucking industry has grown, reflecting the growth in containerized cargo handled at public terminals, breakbulk cargo handled at public and private terminals, and the liquid bulk tonnage handled at private terminals. The growth in containerized cargo and breakbulk cargo has driven the increase in jobs with the Longshoremen and dockworkers, as well as with warehousing operations.

News, United States Department of Labor, Bureau of Labor Statistics, “Multifactor Productivity Trends, 2005”, Released Friday, March 23, 2007.

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Exhibit IV-3 Comparison of Direct Jobs by Job Category
2006 SURFACE TRANSPORTATION RAIL TRUCK MARITIME SERVICES TERMINAL EMPLOYEES ILA/DOCKWORKERS TUG ASSISTS PILOTS AGENTS MARITIME SERVICES FORWARDERS WAREHOUSE CONTAINER REPAIR/STORAGE GOVERNMENT MARINE CONSTRUCTION/ SHIPYARDS BARGE SHIPPERS/CONSIGNEES PORT AUTHORITY BANKING/INSURANCE/LAW TOTAL
Totals may not add due to rounding.

2002 766 2,735 1,372 1,808 68 68 162 133 285 590 92 1,138 1,466 105 4,600 293 60 15,740

Change -110 874 400 343 -7 7 -14 191 23 429 -6 189 -235 -55 -1,331 1 52 753

657 3,610 1,772 2,151 62 75 148 324 307 1,019 86 1,327 1,230 50 3,269 294 112 16,493

Due to a change in the methodology as to how related jobs are estimated, no comparisons can be made with the 2002 study. In addition, the earlier studies did not include the estimation of a state-wide related income and value of output measure, and hence comparisons cannot be made.

6. SUMMARY OF IMPACT COMPARISONS
In summary, the major changes that have occurred in terms of economic impacts generated by the Port of Baltimore between fiscal year 2002 and 2006 consist of a significant growth in cargo, including a growth in containerized cargo, breakbulk cargo, liquid bulk cargo/LNG and coal. Overall, direct jobs have increased by 753 jobs, and there was an increase in the amount of in-state purchases by the firms directly dependent on the Port of Baltimore that resulted in the addition of 5,243 indirect jobs. This increase in in-state purchases also reflects a more comprehensive inclusion of local purchases by Mittal Steel. Induced jobs have grown due to a revision of the personal income multiplier for water transportation workers, as reported by the US Bureau of Economic Analysis, and as a result of this change in methodology, a comparison between induced jobs in 2002 and 2006 cannot be made.

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Key increases with the direct jobs were associated with the growth in containerized cargo and breakbulk cargo handled at the MPA public terminals, while the growth in breakbulk cargo (including project cargo), and liquid bulk cargo were recorded at the private terminals. This growth commodity tonnage translates into direct job increases for terminal workers and members of the ILA serving the port, as well as for local trucking firms and warehousemen. As noted, the largest job loss, more than 1,000 jobs since 2002, is due to the downsizing of the Mittal operation at Sparrows Point. This increased economic value of the Port of Baltimore to the State of Maryland further underscores the need for the continued investment in marine terminals and transportation infrastructure to support the growth in cargo and vessel activity at the Port of Baltimore.

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