Presentation to Annual Conference Ports Association of Louisiana Ports of Louisiana 1. Connecting Louisiana to Global and National Markets and/or 2. Creating Economic Development Zones Throughout the State Presentation to Annual Conference Ports Association of Louisiana Dr. Jim Richardson March 3, 2016

PORTS IN LOUISIANA 1. 30+ ports with diversity in size, mission, and responsibility and touching all regional labor markets 2. more ports than Texas, New York, Virginia, and Florida 3. Washington, Maine, and California have more ports 4. Navigable waterways extend to all corners of state 5. Mississippi River—largest port complex in world-importance of dredging

TOP 11 PORTS IN U.S. in CARGO Five in Louisiana

Port Activities and Diversity PORT FOURCHON, 250 companies use as base of operations; vital to U.S. energy PORT OF IBERIA, approximately 5,000 employees and providing offshore drilling CADDO-BOSSIER, over 1,000 employees with 20 companies with latest a major steel facility KROTZ SPRINGS, over 300 employees with refinery LAKE PROVIDENCE, over 60 employees & improving environment PORT OF LAKE CHARLES, 80% of manufacturing employment tied to Waterways and supporting major developments in Southwest Louisiana such as Sasol

Port Activities and Diversity PORT OF GREATER BATON ROUGE, 23 companies located at port from coffee to energy PORT OF NEW ORLEANS, containerized and breakbulk cargo and hosting cruise ships MORGAN CITY HARBOR AND TERMINAL DISTRICT, 175 privately owned facilities along district with focus on inland and offshore oil and gas drilling PORT OF SOUTH LOUISIANA, ranks #1 in United States for facilitating the most tons of cargo transported through its docks, bigger than ports in Houston, New York, and Los Angeles

Ports and the Louisiana Economy Ports Connecting and Enhancing Markets Economic Impact: dollars that would not be spent in the state except for the presence of the ports Direct Spending by the Ports: operations and capital investments Direct Spending by the Providers of Services and Businesses on Port Property and other Port-Sensitive Business Steamship Companies, Navigational Services, Custom House Brokers, Stevedoring Companies, etc. Transportation Services Port-sensitive Industry: Need water access and special services provided by Ports And as we considered how to evaluate the economic impact and importance of ports in the state, we needed to consider the many services and roles that the ports have in the economy. Foremost, we focused upon the dollars that would not be spent in the state but for the ports themselves. This includes the direct spending by the ports, such as capital investments and operations, as well as the direct spending by service providers and businesses on port property a well as other port-sensitive business - that is, those industries that require or whose activities are made far easier by access to water transportation. And then we considered the particular effect of Cruise Ships because, were it not for the Port of New Orleans, the cruise ships would not be in the state, at least as presently conceived. Cruise Ship Spending: direct spending by ships and patrons

Impact of Port Activity on State Economy Activities Jobs Personal Earnings State Tax Collections Local Tax Collections In millions of dollars, Ongoing operations of Ports 1,105 $61.8 $4.52 $3.51 Firms on Port Property and Providing Services to Ports 70,050 $3,900.0 $284.0 $224.0 Cruise Ships 5,639 $141.5 $10.4 $8.01 Total Port Activity 76,794 $4,103.3 $298.9 $235.5

Ports and the Louisiana Economy Ports Connecting and Enhancing Markets Economic Impact: dollars that are much more likely to be spent in Louisiana because the ports are available for moving products Port users in Louisiana Exporters with Operations in the state Importers with Operations in the state Other impacts must consider those dollars spent that are made more likely by the presence of the ports. These are dollars spent by exporters and importers in the state. And like any other service, the ports attract business and strengthen established businesses. So an economic evaluation must consider how important industries are strengthened by the ports and the services that they provide. And indeed this is where the impact of ports really impresses, although it should in no way diminish the importance of the ports in the impact that the direct activity can have, as we will see momentarily. Economic Impact: activities that will increase direct spending of ports and maritime industry Port users outside of the state Export industries of the state: Chemicals, Agriculture, Petroleum and Coal Import industries of the state: Oil and Gas

Leading Commodities Shipped for Domestic and Foreign Trade* Crude Petroleum and petroleum Products Chemicals and related products Coal Food and farm products— wheat, corn, soybeans, rice, cotton, coffee, and others Forest Products Iron and steel Soil, sand, gravel, rock, and stone Others Automobiles Auto parts Machinery Consumer products *American Association of Port Authorities

Let us focus upon four major industries in the state: Mining, Transportation and Warehousing, Agriculture, and Manufacturing. The circles on this graphic represent the relative size of the employment in the industry within a given economic region. As you can see, industries are region-specific. Agriculture is predominately in the northern part of the state. Mining is along the coast from Lafayette, where nearly half of all mining jobs are located, through Houma into New Orleans.Manufacturing is largely in new Orleans and Baton Rouge, as is Transportation and Warehousing. Shreveport-Bossier is interesting in that it has a modest presence in all the industries we focused upon.

Trade Needs Ports and Local Industries Need Trade Ports Connecting Global and National Economies to the Louisiana Economy Oil and Gas, Petrochemical, Refineries, Fabricated Metals, Agricultural Products, Coffee, Steel, and other consumer products Direct Spending of Trade Industries in Louisiana $96.1 Billion Economic Transactions in Louisiana $182.1 Billion Personal Earnings $32.9 Billion Louisiana Jobs 524,960 State and Local Tax Receipts $4.2 Billion 1 out of 5 jobs in State Connected to Trade-oriented Industries

Like any successful industry, ports attract business to Louisiana Concluding Remarks Direct spending by ports and providers of services account for 77,000 jobs in the state Industry users of ports (those that are transportation sensitive) account for 1 out of 5 jobs in the state Like any successful industry, ports attract business to Louisiana So, to quickly summarize, we considered three impact potentials of the ports. The first is the direct impact throuhg spending. This spurs roughly 73,000 jobs in the state. And again, this is nothing to scoff at - this makes the ports a larger industry than the Mining sector. The users of ports - that is, those industries that are senstitive to transportation options - account for about 1 out of 5 jobs in the state. We are not suggesting that these jobs would disappear if the ports were not present and strong - although some of them would. Instead, we should consider how much more difficult the industrial activity would be without the ports. This is an impact and starkly illustrates the ports’ importance. Finally, we considered how ports are an important infrastructure for the attraction of new industries, and we tried to show that Louisiana is ripe for new investment and greater economic diversification. The ports are not sifficient to accomplish this, but they are an important component. Let me leave you with a simply economic illustration - the loop. As new jobs are created, growth ensues. This growth then creates the ability to invest further, which in turn creates more jobs. The ports, as a network of services, fit nicely into this process. Economic Loop - attracting new business increases direct jobs, which enables more growth, which attracts new business

Ports of Louisiana Questions??? Presentation to Annual Conference Ports Association of Louisiana Dr. Jim Richardson March 3, 2016 Thank you very much for your time and your patience. Again, my name is Roy Heidelberg, and I would be happy to answer any questions.