Port of Boston: A Vital Economic Engine

Port of Boston is Vital Economic Engine and Job Generator for Region.

The Port of Boston generated $4.6 billion in 2012 and more than 50,000 jobs are supported by the port, including more than 7,000 direct jobs, according to a report released by the Massachusetts Port Authority (Massport).

This economic impact and the jobs created by the working seaport help to keep Boston competitive among other U.S. East Coast ports. Operation of the maritime terminals ensures that the more cost-efficient waterborne cargo lands in Boston rather than other ports like New York/New Jersey or Baltimore, where it then must be trucked into the region, significantly adding to the traffic on the I-95 corridor. It is very likely that shoes on your feet or the fuel that warms your home in the winter came through the Port of Boston. This not only allows for items to be sold to the public at a lower cost, but the waterborne shipping of cargo also reduces the amount of truck traffic. This means that there is less traffic congestion, less roadway maintenance, fewer emissions, and that the additional money it would cost to import and export goods from a different port stays in the region.

Of the 7,091 direct jobs created by maritime activity in the Port of Boston, 2,885 of these direct jobs that were created by activity at Massport facilities.

“This study confirms that the Port of Boston continues to be a job generator and economic engine for the New England region,” said Thomas P. Glynn, Massport’s CEO. “The most significant contribution comes from activity at Conley Terminal. With the expansion of the Panama Canal and approval of federal funds for the Boston Harbor Dredging Project  through the WRRDA bill, the Port of Boston has the unique opportunity to capture additional business that the larger ships coming thorough the Canal will bring to East Coast ports, allowing job growth and economic impact to continue.”

“It’s very important that we continue to invest in the port,” said Deborah Hadden, Port Director for Massport. “Even during the recession, the number of jobs and the economic impact increased by nearly 50-percent, which is astounding. We need to continue to this upward climb while we have momentum.”

The study reports that in 2012, $1.2 billion of the $4.6 billion was generated by maritime activity at Massport’s public terminals, as well as private marine terminals in the port. When a study of this caliber was last conducted, in 2005, $1 billion was generated by maritime activity. This growth was driven by a number of factors related to containerized cargo, seafood processing, and the cruise business in the Port of Boston.

Cargo activity generated the majority of economic impacts in 2012 with $2.7 billion representing the value that cargo adds to the New England region and the 4,574 direct jobs the terminals create. Essentially, the Port of Boston can be likened to entities like Massachusetts General Hospital, Boston University, and Fidelity Investments in terms of the Commonwealth’s largest employment providers.

Martin Associates, whose studies have been reviewed and used by organizations like International Trade Commission to set national policy, used a more robust and sophisticated analysis method with the 2012 data than they used in 2005. Martin Associates included nearly 1,000 U.S. Coast Guard employees which drove the biggest increase in cargo-generated jobs in the 2012. In the 2005 impact analysis, only 47 of these jobs were included. After further discussion with the Coast Guard during the 2012 analysis, it was recommended that these jobs are counted as being directly depended upon the Port of Boston. Without the inclusion of the Coast Guard jobs, cargo-generated jobs still grew by 3,621 total jobs.

Seafood processing operations showed the next largest revenue impact. Fish and seafood processing tenants of Massport facilities support 868 total jobs, 412 of which are direct jobs. In the 2005 impact analysis, there were 531 total jobs including 271 direct seafood processing jobs at Massport facilities. Processing activity at Massport generated $196.9 million of annual business revenue and $47.9 million of total personal income and local consumption expenditures. Compare this to the $90.5 million in business revenue and $34.8 million in total personal income and consumption expenditures reported in the 2005 survey. This significant increase is attributed to a combination of growth in activity and employment levels at these operations. Boston Logan International Airport is located about three miles from the working seaport. This proximity allows for the efficient and timely distribution of seafood. Chances are that a piece of haddock served in a restaurant in Chicago came from a seafood processor in the Port of Boston and was flown out of Logan Airport.

Cruiseport Boston saw an increase in cruise passengers, larger ships, and more ships that began and ended itineraries in Boston versus visiting as a port of call. In the seven-year period between studies, cruise passenger numbers nearly doubled, growing from 199,453 to 380,000. The number of sailings also grew from 95 in 2005 to 117. The types of vessels calling the cruise terminal have evolved since 2005, when the majority of vessels calling the port were smaller coastal ships. These vessels also made Boston a port of call instead of a homeport, like many vessels do today. Cruise operations at Massport created 971 direct jobs, and supported about 990 jobs. The 2005 study found that Massport’s cruise operations created 418 direct jobs and supported another 287. Total income and local consumption expenditures relevant to cruise operations generated $79.5 million in 2012. This is a nearly $12 million increase in total cruise-generated income and local consumption expenditures since the 2005 study was conducted.

The report was based on telephone surveys of port tenants and firms providing services to the marine terminals, cruise vessels and their associated passengers, and seafood processors. The telephone interviews achieved a more than 95-percent response rate. A total 315 firms and 1,010 passengers and crew contributed data to the study.