Economic Impact

Economic Impact of the ILA

The International Longshoremen’s Association (ILA) plays a crucial role in the US economy, particularly in the South Atlantic and Gulf Coast ports, as it represents a significant portion of the workforce involved in maritime operations such as cargo handling, shipping logistics, and port operations. Here’s a breakdown of the economic impact:

Port Operations and Cargo Handling

The ILA members are responsible for the smooth and efficient operation of ports, including the loading and unloading of cargo from ships. The South Atlantic and Gulf Coast ports, which include major hubs like the Port of Savannah, Port of Charleston, Port of Houston, and Port of New Orleans, are critical to US international trade.

• These ports handle a large volume of containerized goods, bulk cargo, and other imports and exports, making them essential gateways for goods entering and leaving the U.S.
• The efficiency of ILA workers directly impacts the speed and cost-effectiveness of shipping.
• Furthermore, the ILA’s efficiency in cargo handling not only ensures quick turnaround times for ships but also optimizes port operations by minimizing congestion and delays. Their skilled workforce enables faster loading and unloading processes, allowing for more ships to dock and depart within a shorter time frame. This high level of operational efficiency helps reduce supply chain bottlenecks, decreases storage costs, and improves the overall competitiveness of U.S. ports in the global trade market. By maintaining a steady flow of goods, ILA workers contribute significantly to keeping freight costs lower and enhancing the reliability of shipping schedules, benefiting both domestic and international businesses.

Economic Contribution in Terms of Jobs

The ILA is not just a labor force but a driving factor for local and regional economies. The economic impact includes:

• Direct Employment: Longshoremen and other port workers, including truck drivers, warehouse operators, and stevedores, are directly employed at these ports. In the South Atlantic and Gulf Coast regions, tens of thousands of individuals rely on port operations for their livelihoods.
• Indirect Employment: Port activities stimulate demand for goods and services in areas like transportation (trucking and rail), warehousing, logistics, and maintenance. This creates jobs in sectors like manufacturing, distribution, and retail.
• Wages and Benefits: ILA workers often earn above-average wages, contributing significantly to local economies. The high-paying nature of these jobs means they support families, local businesses, and tax revenues in surrounding communities.

There are 2.2 million direct, induced and indirect jobs in the United States that are generated by the U.S. coastal port sector.  Of the 2.2 million jobs, 652,078 jobs are directly generated by marine cargo and vessel activity. As the result of local and regional purchases by those 652,078 individuals holding the direct jobs, an additional 1,056,942 induced jobs are supported in the national economy.  501,555 indirect jobs are supported by $41.0 billion of local purchases by businesses supplying services at the marine terminals and by businesses dependent upon cargo and vessel activity. An additional 28.6 million jobs are with exporters/importers and users of the nation’s coastal seaports.

Regional GDP Contribution

Ports in the South Atlantic and Gulf Coast regions contribute billions of dollars annually to the U.S. economy. For example:

• The Port of Savannah is one of the busiest ports in the U.S. and plays a vital role in Georgia’s economy, generating billions in economic output. It contributes significantly to local GDP, with thousands of workers in direct and indirect jobs.
• The Port Houston is one of the most diverse and dynamic ports in the United States, handling a wide range of cargo types, including containers, breakbulk, and roll-on/roll-off (RoRo) shipments, in addition to its role as a major hub for oil and chemical exports. This diversity in cargo handling is a significant driver of the port’s economic impact on both the Texas and U.S. economies.

Port Houston’s diversity in handling various types of cargo is a testament to its versatility and capability to serve a wide array of industries, including energy, manufacturing, automotive, technology, and construction. This diversity enhances the port’s role as a major economic engine for Texas and the U.S., ensuring the flow of goods across multiple sectors while contributing significantly to regional and national GDP. Its success in handling diverse cargo types allows it to be a key part of global trade and supply chains, offering unparalleled flexibility to meet the needs of a variety of industries.

In 2018, marine cargo activity generated approximately $5.4 trillion of total economic activity, accounting for nearly 26 percent of the nation’s $20.9 trillion Gross Domestic Product reported in the fourth quarter of 2018. Of this $5.4 trillion, $184.1 billion accounts for direct business revenue that was received by the firms providing services to the cargo and vessels calling at the nation’s seaports.  From this $184.1 billion of direct business revenue, the firms use a portion, $40.9 billion, to pay the salaries of 652,078 direct job holders.  This equates to an average annual income of $62,800, compared to an average overall U.S. mean salary of $50,620 in 2017.

In addition to the direct salary paid from the $184.1 billion of direct business revenue, the firms providing the direct services also make purchases, totaling about $41.0 billion.

Another component of the $5.4 trillion economic value is the re-spending effect that occurs due to consumption purchases by the direct jobs holders.  This is not included in the direct business revenue as it occurs from the portion of the direct income that is used by individuals for purchases of goods and services.  In 2018, the re-spending and local consumption impact is estimated at $139.2 billion. The remaining $5.1 trillion represents the value of the output to the national economy that is created due to the cargo moving via the coastal ports. 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.

Global Trade and Export-Import Activity

The ILA helps ensure the smooth flow of international trade. The South Atlantic and Gulf Coast ports are crucial for both imports (such as consumer goods, electronics, vehicles, and food) and exports (such as agricultural products, chemicals, and energy). This trade supports U.S. industries and keeps the nation competitive in global markets.

• These ports handle significant portions of containerized goods and bulk exports, making them essential to U.S. economic activity and global trade dynamics.
• The flow of goods through these ports affects U.S. competitiveness in industries like agriculture, energy, and manufacturing.

There were $378.1 billion of total federal, state, and local taxes generated by maritime activity at the coastal ports in 2018, including $47.1 billion of direct, induced and indirect federal, state and local tax revenue, and an additional $331.0 billion of federal state and local tax revenue created due to the economic activity of the exporters and importers using the nation’s deep-water coastal port system.

Supply Chain Efficiency

The ILA’s role in maintaining efficient port operations ensures that U.S. businesses can quickly get raw materials and ship finished products. The efficiency of port operations has a direct effect on industries such as:

• Retail: Companies like Amazon and Walmart depend on fast, efficient ports for the importation of goods from around the world.
• Automotive and Technology: The shipment of car parts, technology, and other manufactured goods is reliant on the timely movement of cargo through these ports.

Economic Stability

The International Longshoremen’s Association (ILA) plays a vital role in ensuring the stability of port operations, particularly in the South Atlantic and Gulf Coast regions, by providing highly skilled labor on demand to stevedores and other port employers. The ILA’s workforce is essential for maintaining efficient, smooth operations at key U.S. ports, supporting the flow of goods and services critical to the national and global economy.

• Skilled Labor Force: The ILA’s membership is comprised of a highly trained workforce, equipped with the expertise needed to handle complex and varied cargo types, including containers, breakbulk, and RoRo. This expertise ensures that the ports can operate with efficiency and flexibility, meeting the demands of ever-changing global trade patterns.
• Economic Stability: The ILA’s stable and skilled labor force contributes to the ongoing reliability of port operations. Its ability to provide workers on-demand for tasks ranging from routine cargo handling to specialized operations ensures that ports in the South Atlantic and Gulf Coast can consistently meet demand, minimizing delays and maintaining cost-efficiency. The predictability and skill of ILA workers help avoid disruptions that could otherwise affect the supply chain, reduce operational costs, and keep goods flowing smoothly.

Conclusion

The economic impact of the International Longshoremen’s Association (ILA) in the South Atlantic and Gulf Coast ports is immense, encompassing direct job creation, indirect economic benefits through supply chains, and critical contributions to national and global trade. The ILA is integral to the continued success of these ports, which are vital trade hubs that generate billions of dollars in GDP and provide thousands of high-wage jobs. As the backbone of port operations, the ILA’s role extends beyond the workforce to influence U.S. competitiveness, economic growth, and global trade.