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The economic well being of the Midwest and the broader Mississippi region
are inextricably linked with the valuable waterway transportation
infrastructure that has served the region for over a century. A recent study*
commissioned by the Ports of Indiana quantified just how important the
locks located on the Chicago Area Waterway System are to America¶s inland
waterway transportation system.

According to the Ports study, the locks are responsible for over $1.9 billion in
economic activity and 17,655 jobs across the region. But the impact doesn¶t
end there ± lock activity is essential to the economic well being of maritime
commerce across the greater Indiana Lakeshore. Thus any closure or
disruption, could place at risk the more than 104,567 direct and indirect
related jobs, $14.2 billion of economic activity to the state, and $567 million
of state and local tax revenue created by the state¶s booming maritime trade
corridor.

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The economic impacts of barge shipments to the Indiana Lakeshore region

are significant. Based on 2008 data, the most recent year complete figures
were available, barge traffic through the O¶Brien locks contributed the
following to the regional economy:cc


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Direct Jobs 3,394
Total Jobs 17,655
Direct Personal Income $141,502,699
Total Personal Income $890,168,403
Total Purchases $227,006,700
Total State and Local Taxes $83,675,830
Total Value of Economic Activity $1,909,005,610

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Îc While the economic impact of the locks on Indiana is impressive,

Indiana cargo made up only 27.8% of the total shipments through the
O¶Brien lock in 2008. Thus the impacts of lock closure to the broader
regional economy could be much greater than the $1.9 billion dollars
identified through this study.

Îc What¶s more, Northwest Indiana is home to the largest steel-producing

region in the U.S. and the Chicago-area locks are vital to these
operations. Thus the economic impacts of closure could potentially be
felt throughout the US manufacturing sector.

Îc It¶s also important to note that the Ports study was based on 2008
data. As a result of the economic climate, the Ports handled
significantly less freight than usual ± meaning the true economic and
employment impacts of the locks are likely higher than those cited.

ac In 2008, the Port handled 32 million tons of cargo, less than the
previous 4-year average of 34.2 million tons.

ac Similarly, the 1.9 million tons of barge activity handled by the

Ports were less than the average of 3.0 million tons over the
same 2004-2007 period.

Îc Barge shipments offer significant public benefits versus alternative

modes of transportation, including reduced shipping costs, fuel
consumption, ozone emissions, highway congestion and
transportation-related accidents.

Îc The benefits of waterway transportation are not limited to the

companies that ship directly by barge through the locks. As evidenced
by the Ports study, other companies would suffer if the locks were
closed. The slightest change in the logistics chain and costs can
determine whether Midwest products are shipped around the world or
down the road.

ac To completely shut down one mode of transportation would have

a catastrophic affect on many types of businesses by cutting

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them off from certain markets or suppliers and raising rates for
other modes.

ac Eliminating barge shipping as an option would likely increase

truck and rail rates, as these modes would no longer have to be
cost-competitive with barge movements. Competition is crucial
to controlling transportation costs.

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The impressive economic contributions of the locks and maritime activity for
Indiana¶s lakeshore region demonstrate the importance of the Chicago Area
Waterway System, not just to Illinois, but to the entire Midwest economy.
Previous studies examining the impacts of the locks conservatively estimated
that closure could cost the region $4.7 billion over 20 years. It¶s clear now
that the broader economic impacts of lock closure would be many times
greater.

Elected officials across the region must work together to achieve a

comprehensive, multi-tiered solution that protects the Great Lakes, without
devastating the region¶s economy.

*August 2010, ³`

 


 
 
  

 w Ports of Indiana,
Martin Associates. Access to study at: http://www.unlockourjobs.org/resources/indiana-ports-study-
economic-impacts-of-waterborne-shipping-on-the-indiana-lakeshore/c

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