Economic Impact

You have heard that Port Everglades is an economic powerhouse.  But did you know that those big cruise and cargo ships that come into the Port also provide jobs and inject money into our community? 

Port Everglades generates approximately $18 billion worth of business activity and approximately 200,000 jobs statewide, according to a study produced by nationally recognized maritime research company Martin Associates.  Read the full study below and learn more about the economic impact that Port Everglades has in Broward County and Florida.

THE LOCAL AND REGIONAL

ECONOMIC IMPACTS OF

PORT EVERGLADES

April 5, 2010

Fiscal Year 2009

Prepared for:

BROWARD COUNTY'S PORT EVERGLADESDEPARTMENT

Martin Associates
941 Wheatland Avenue
Suite 203
Lancaster, PA 17603

TABLE OF CONTENTS

EXECUTIVESUMMARY.. 1

I.INTRODUCTION AND OVERVIEW... 7

1.  IMPACT DEFINITIONS. 7

2.METHODOLOGY.. 9

3.ECONOMIC IMPACT MODELS. 10

3.1.Maritime Cargo Sensitivity. 11

3.2.Cruise Activity. 11

4.SUMMARY OF RESULTS. 12

II.ECONOMIC IMPACTS OF MARITIME CARGO ACTIVITY.. 14

1.IMPACT STRUCTURE.. 16

1.1.The Surface Transportation Sector. 16

1.2.The Maritime Services Sector. 16

1.3.Related Shipper/Consignees of Port Everglades Sector. 18

1.4.Port Everglades Department 18

2.COMMODITIES INCLUDED IN THE ANALYSIS. 19

3.  MARITIME CARGO EMPLOYMENT IMPACTS. 20

3.1.Direct Maritime Cargo Job Impacts. 21

3.1.1.Job Impacts by Category. 21

3.1.2.Direct Job Impacts by Commodity. 22

3.1.3.Distribution of Direct Cargo Jobs by Place of Residency. 23

3.2.Induced Jobs. 24

3.3.Indirect Jobs. 24

3.4.Related User (Shipper/Consignee) Jobs. 24

4.TOTAL ECONOMIC OUTPUT, BUSINESS REVENUE, INCOME AND TAX IMPACTS. 26

4.1.Revenue Impact - Total Economic Activity. 26

4.1.1.Revenue Impacts by Economic Sector/Category. 27

4.1.2.Revenue Impacts by Commodity. 28

5.PERSONAL EARNINGS IMPACT.. 28

6.TAX IMPACTS. 29

7.COMPARISON OF CARGO IMPACTS FY2008 TO FY2009. 29

III.ECONOMIC IMPACTS OF CRUISE SERVICE AT PORT EVERGLADES. 32

1.ECONOMIC IMPACT STRUCTURE.. 32

2.ECONOMIC IMPACT OF HOMEPORT CALLS. 33

3.CRUISE SERVICE IMPACT MODEL.. 36

4.PORT EVERGLADES CRUISE OPERATIONS FY2009. 37

5.ECONOMIC IMPACTS OF CRUISE SERVICE AT PORT EVERGLADES. 39

6.JOB IMPACTS. 39

7.PERSONAL INCOME IMPACT.. 39

8.BUSINESS REVENUE.. 40

9.TAX REVENUE.. 40

10.COMPARISON OF CRUISE IMPACTS FY2008 TO FY2009. 40

APPENDIXA - SAMPLE SURVEY QUESTIONNAIRE.. 43

TABLE OF EXHIBITS

Exhibit E-1Flow of Economic Impacts of Seaport Activity through the Economy.. 2

Exhibit E-2FY2009 Local and Regional Economic Impacts Generated by Port Everglades*. 4

Exhibit I-1FY2009 Economic Impact of Port Everglades Cargo and Cruise Activity*. 12

Exhibit II‑1Flow of Economic Impacts Generated by Maritime Activity.. 14

Exhibit II-2FY2009 Cargo Employment Impacts by Sector and Job Category.. 21

Exhibit II-3FY2009 Distribution of Direct Cargo Job Impact by Commodity.. 22

Exhibit II-4FY2009 Distribution of Direct Cargo Jobs by Place of Employment. 23

Exhibit II-5FY2009 Distribution of Direct Jobs by Jurisdiction within Broward County.. 24

Exhibit II‑6FY2009 Direct Revenue Generated By Port Cargo Activity.. 27

Exhibit II-7FY2009 Cargo Revenue Impacts by Commodity.. 28

Exhibit II-8FY2009 Distribution of State and Local Tax Revenue. 29

Exhibit II-9Comparison of Cargo Impacts FY2008-FY2009. 30

Exhibit III-1FY2009 Cruise Calls and Passengers by Cruise Line. 37

Exhibit III-2Origin of Port Everglades Cruise Passengers. 38

Exhibit III-3Mode of Access by Cruise Passengers. 38

Exhibit III-4FY2009 Economic Impact of Cruise Operations at Port Everglades. 39

Exhibit III-5FY2009 Distribution of State and Local Tax Revenue. 40

Exhibit III-6Comparison of Cruise Impacts FY2008-FY2009. 41

EXECUTIVE SUMMARY

MartinAssociates was retained by the Broward County Port Everglades Department tomeasure the local, regional and state economic impacts generated by maritimeactivity at the maritime container, break bulk, liquid bulk and dry bulk cargoterminals as well as cruise terminals at Port Everglades.  Economic impacts generated at the cargofacilities include the impacts generated by containerized cargo (both dry andreefer), petroleum, steel products, cement, lumber and plywood, RO/RO-FLO/FLOcargo such as previously owned vehicles (POV's) and yachts, and other dry bulkcargo such as aggregates.   In additionto the economic impacts generated by the cargo activity at the seaportterminals, Martin Associates has also quantified the economic impacts of thecruise industry at Port Everglades.

This study focuses onimpacts generated in the Port Everglades Department's Fiscal Year (FY) 2009 -October 1, 2008 through September 30, 2009. Impacts are estimated in terms ofjobs, personal earnings, business revenue, and state and local taxes.  In addition to the baseline impact estimates,computer models specific to each terminal operation have been prepared that canbe used in evaluating the sensitivity of impacts to changes in tonnage, laborproductivity, labor work rules, commodity mix, inland origins/destinations ofcommodities and vessel size. 

            ExhibitE-1 on the following page graphically demonstrates how seaport activity impactsthe local and regional economies.  Asthis exhibit indicates, the ocean cargo and vessel activity initially generatebusiness revenue to the firms supplying services to the cargo and cruiseindustry.  This revenue is used topurchase employment (employ direct jobs) to provide these services, to paystockholders and for retained earnings, and to purchase goods and services fromlocal, national and international firms (creating indirect jobs with thesefirms).  Also, these businesses pay taxesfrom the business revenue generated from marine cargo and cruise activity.

ExhibitE-1 Flow of Economic Impacts of Seaport Activity through the Economy

The employees hired by the firms receive wages and salaries (personal income), aportion of which is saved, while another portion is used to buy goods andservices such as food, housing, clothing, health care, etc.  These purchases create a re-spending impactthroughout the economy, known as the personal income multiplier.  As a result of these local purchases,additional jobs (known as induced jobs) are created in the local economy.  Finally, taxes are paid by individualsemployed with the firms providing the services to the seaport terminals.

            As demonstrated by this chart, four categoriesof impacts are measured:

• Jobs;
• Employee earnings;
• Business revenue; and
• State and local taxes.

Withrespect to jobs, four types of job impacts are measured.   These are direct, induced, indirect andrelated jobs.  The job impacts aredefined as follows:

• Direct jobs are those jobs with local firms providing support services to the seaport.  These jobs are dependent upon this activity and would suffer immediate dislocation if the seaport activity were to cease.  Seaport direct jobs include jobs with railroads and trucking companies moving cargo to and from Port Everglades' maritime terminals, members of the International Longshoremen's Association (ILA) and Teamster's Union, steamship agents, BSO, freight forwarders, ship chandlers, warehouse operators, bankers, lawyers, terminal operators, stevedores, etc.  Direct employees created by the cruise operations include the jobs with the firms providing the direct vessel services -chandlers, pilots, longshoremen, line handlers, local advertising firms, caterers, liquor wholesalers, linen companies, security firms, waste disposal firms, parking, local transportation -- as well as the firms providing services to the passengers on the vessels -- hotels, taxi cabs, restaurants and tour packages.  Also included are impacts generated at Fort Lauderdale-Hollywood International Airport due to the cruise passengers arriving via air. 

•  Induced jobs are jobs created locally and throughout the regional economy due to purchases of goods and services by those directly employed.  These jobs are with grocery stores, the local construction industry, retail stores, health care providers, local transportation services, etc., and would also be discontinued if seaport activity were to cease.

• Indirect jobs are those jobs generated in the local economy as the result of local purchases by the firms directly dependent upon seaport activity. These jobs include jobs in local office supply firms, equipment and parts suppliers, maintenance and repair services, etc.

• Related user jobs are held throughout the state with manufacturing and wholesale and retail distribution firms using the seaport terminals for the shipment and receipt of cargo.  Related jobs are not dependent upon the seaport marine terminals to the same extent as are the direct, induced and indirect jobs.  It is the demand for the final products, which creates the demand for the employment with these shippers/consignees, not the use of a particular seaport or maritime terminal, and therefore these firms can and do use other ports.

Theemployee earnings consist of wages and salaries and include are-spending effect (local purchases of goods and services by those directlyemployed), while business revenue consists of total business receipts byfirms providing services in support of the seaport activity.  State and local taxes include taxespaid by individuals dependent upon the seaport activity.

Thisreport is based on interviews conducted in 2009 with 248 firms providingservices to the cargo and vessels handled at Port Everglades' cargo and cruiseterminals.  These 248 firms interviewedin 2009, represent 99 percent of the firms in the Port Everglades seaportcommunity, underscoring the defensibility of the study.  Furthermore, the impacts can be traced backto the individual firm.  The datacollected from these interviews is used to develop operational models of theterminals located at Port Everglades.   A vast majority of these firms were interviewedin 2006 as part of the initial baseline economic impact study (FY2006)conducted by Martin Associates for the Port Everglades Department.  In FY2007 and FY2008, annual updates, whichincluded only updating key data elements such as tonnage levels, containercounts, vessel calls, passenger counts and Port Everglades Departmentinformation, were conducted.  It isimportant to emphasize that the two (FY07 & FY08) updates did not include are-survey of the maritime community. 

The economic impacts generated by the cargoand cruise terminals are summarized in

Exhibit E-2.

ExhibitE-2 FY2009 Local and Regional Economic Impacts Generated by Port Everglades*

* Totals may berounded.

The vessel and cargo activity at the cargo and cruise facilitiesat Port Everglades generated the following estimated impacts in the regionaleconomy in FY2009:

143,185jobs in Florida are in some way related to the cargo and cruise activity atPort Everglades.  Of the 143,185 totaljobs:

• 9,948 direct jobs are generated by the ocean cargo and cruise activity. 

• As the result of local and regional purchases by those 9,948 individuals holding the direct jobs, an additional 9,225 induced jobs are supported in the regional economy.

•   6,703 indirect jobs were supported by $463.9 million of local purchases by businesses supplying services at the cargo and cruise terminals and by businesses dependent upon Port Everglades for the shipment and receipt of cargo.

• The import and export cargo moving via Port Everglades supports 117,310 related user jobs with the state's manufacturing and retail and wholesale and distribution industries and the in-state industries supporting the movement and distribution of all commodities, primarily concentrated with containerized cargo imports and exports using the seaport terminals for shipment and receipt of cargo.   

Approximately$5.4 billion of wages and salaries were generated by Port Everglades' cargo andcruise activity in FY2009.

• $379.4 million of direct wages and salaries were received by those 9,948 directly employed. 

•   As a result of re-spending this direct job holder income, an additional $1.0 billion of income and consumption expenditures were created and supported the 9,225 induced jobs.

• The 6,703 indirect job holders received $272.6 million of indirect wages and salaries.

•  The 117,310 related user job holders generated $3.7 billion in personal income.

The FY2009cargo and cruise activity at Port Everglades generated $13.9 billion ineconomic value to the State of Florida.

• Businesses providing services to the cargo and cruise terminals received $2.1 billion of revenue. 

•  In addition, the cargo activity at the Port created an additional $11.7 billion of related economic output in the state, the majority of which is created by the movement of containers, and the in-state industries supporting these industries.

Local businesses and suppliers to the cargo andcruise industries at Port Everglades made $463.9million of local purchases.

$400.2million of state and local taxes were generated by activity at the cargoand cruise terminals, including $276.9million generated by the related users throughout the state.

Declines in economic impacts were evident from the previousfiscal year.  These declines are due to adecrease in traffic for all commodities in FY2009 due to the economicrecession.  Specifically, containerizedcargo activity declined from nearly 6.6 million tons in FY2008 to 5.2 milliontons in FY2009 - representing a 27% decline. Similarly, bulk tonnage including cement and aggregates used in theconstruction declined even further from normal levels.   Petroleum products through the port were offby 5% from the previous year, representing the lowest tonnage throughput since2000. The decline in breakbulk cargoes such as steel and lumber can also beattributed to the downturn in regional economic conditions and the resultingdecline in construction activity in the region. 

With respect to cruise impacts, decreases in both passengeractivity and cruise vessel activity contributed to the decline in PortEverglades impacts.  Over the FY2008 toFY2009 period, Port Everglades cruise passengers decreased by 87,950 from3,227,770 in FY2008 to 3,139,820 in FY2009 and cruise ship calls decreased by 669from 1,676 to 1,007.  While multi-daypassenger activity increased by 206,484 passengers between FY2008 and FY2009,that was offset by a larger decline in daily passengers resulting from the lossof 669 cruise vessel calls attributed to the daily/two-day cruises offered bySea Escape and Imperial Majesty.  The SeaEscape ceased operation prior to FY2009 and the Imperial Majesty called only 41times in FY2009 as compared to 169 in FY2008. The loss of the locally based staff and crew operations of daily cruiseproviders contributed significantly to the declines in impacts.  

I. INTRODUCTION AND OVERVIEW

Martin Associates was retained by the Broward County PortEverglades Department to measure the local, regional and state economic impactsgenerated by maritime activity at the container, break bulk, liquid bulk anddry bulk cargo terminals as well as cruise terminals at Port Everglades.  Economic impacts generated at the cargofacilities include the impacts generated by containerized cargo (both dry andreefer), petroleum, steel products, cement, lumber and plywood, roll on-rolloff and float on-float-off (RO/RO and FLO/FLO) cargo such as previously ownedvehicles (POV's) and yachts, and other dry bulk cargo such as aggregates.   In addition to the economic impacts generatedby the cargo activity at the seaport terminals, Martin Associates has alsoquantified the economic impacts of the cruise industry at Port Everglades

The study employs methodology and definitions that have been usedby Martin Associates to measure the economic impacts of seaport activity atmore than 250 ports in the United States and Canada, and at the leadingairports in the United States.  It is tobe emphasized that only measurable impacts are included in this study.  In order to ensure defensibility, the MartinAssociates' approach to economic impact analysis is based on data developedthrough an extensive interview and telephone survey program of the Port'stenants and the firms providing cargo and cruise services at Port Everglades.Specific re-spending models have been developed for the Fort Lauderdale area toreflect the unique economic and consumer profiles of the regional economy.  To further underscore the defensibility ofthe study, standardized impact models, such as the MARAD Port Kit are not used.  Instead, the resulting impacts reflect theuniqueness of the individual Port operations, as well as the surroundingregional economy. 

At the outset, it is important to note that this study uses adifferent methodology than previous studies prior to the 2006 Martin Associatesbaseline report and cannot be compared directly to results of economic impactstudies previously completed for Port Everglades by other consultants.  However, since the initial FY2006 baselinereport, Martin Associates has updated the results for FY2007 and FY2008 as wellas completed this analysis which includes a complete re-survey of nearly 250members of the maritime cargo and cruise community serving Port Everglades'terminals and tenants.  Therefore, directcomparisons can be made beginning with the FY2006 study.

1.  IMPACT DEFINITIONS

The impacts are measured separately for the Port's cargo activityand cruise activity.

Theimpacts are measured in terms of:

• Jobs [direct, induced, indirect and related shipper/consignee (related users)];
• Personal income;
• Business revenue; and
• State and local taxes.

Eachimpact measurement is described below:

Direct, Induced and Indirect jobs - Directjobs are those that would not exist if activity at the Port‘s cargoand cruise facilities were to cease. Direct jobs created by maritime cargo activity at the Port's terminalsare those jobs with the firms directly providing cargo handling and vesselservices, including trucking companies, terminal operators and stevedores,members of the International Longshoremen's Association (ILA), Teamsters Unionand  non-union dockworkers, freightforwarders and customshouse brokers, vessel agents, pilots and tug assistcompanies.  Direct employees created bythe cruise operations include the jobs with the firms providing the directvessel services -chandlers, pilots, longshoremen, line handlers, localadvertising firms, caterers, liquor wholesalers, linen companies, securityfirms, waste disposal firms, parking, local transportation -- as well as thefirms providing services to the passengers on the vessels -- hotels, taxi cabs,restaurants and tour packages.  Alsoincluded are impacts generated at Fort Lauderdale-Hollywood InternationalAirport due to the cruise passengers arriving via air.

Induced jobs are jobs created in the Fort Lauderdale areaby the purchases of goods and services by those individualsdirectly employed by each of the Port's lines of business.  These jobs are based on the local purchasepatterns of Fort Lauderdale area residents. The induced jobs are jobs with grocery stores, restaurants, health careproviders, retail stores, local housing/construction industry, andtransportation services, as well as with wholesalers providing the goods to theretailers.

Indirect jobs are created throughout the Fort Lauderdalearea as the result of purchases for goods and services by the firmsdirectly impacted by Port Everglades activity, including the tenants, terminaloperators and the firms providing services to cargo - which includes containerizedcargo, petroleum, general cargo, RO/RO and dry bulks and cruise passengeroperations.  The indirect jobs aremeasured based on actual local purchase patterns of the directly dependentfirms, and occur with such industries as utilities, office supplies, contract serviceproviders, maintenance and repair, and construction.  

• Related shipper/consignee (related user) jobs are jobs with shippers and consignees (exporters and importers) including the state's retail and wholesale and distribution industries and the in-state industries supporting the movement and distribution of  cargo imports and exports using the seaport terminals for shipment and receipt of cargo.  While these impacts occur for all commodities, the majority of Port Everglades shippers and consignees impacts involve the import and export of ocean containerized cargo.  Port Everglades and other South Florida ports, including the Port of Miami, are unique in the fact that a more balanced (inbound/outbound) trade exists.  These jobs, while difficult to isolate to a specific county, are held throughout the state including Broward and Miami-Dade counties.  Related jobs are not dependent upon the seaport marine terminals to the same extent as are the direct, induced and indirect jobs since it is the demand for the final products, which creates the demand for the employment with these shippers/consignees, not the use of a particular seaport or maritime terminal, and therefore these firms can and do use other ports.  For example, when hurricane devastation renders a port's container and breakbulk terminals inoperable, essentially suspending operations at the port, the direct, induced and indirect jobholders are immediately affected with similar consequence.  However, the jobs held with related users such as manufacturing as well as wholesale and retail distribution throughout the unaffected areas of state will continue to operate.  These firms are required to find alternative ports to ship and receive cargo in order to maintain given levels of operation.  Therefore, viable port operations are essential to long-term retention of import and export related jobs throughout the state.  

Personal income impact consists of wagesand salaries received by those directly employed by Port activity, and includesa respending impact which measures the personal consumption activity in the FortLauderdale area of those directly employed as the result of Port Evergladescargo and cruise activity.  Indirectpersonal income measures the wages and salaries received by those indirectlyemployed.

 Business revenue consists of totalbusiness receipts by firms providing services in support of the ocean cargo andcruise activity.  Local purchases forgoods and services made by the directly impacted firms are alsomeasured.  These local purchases by thedependent firms create the indirect impacts.

 State and local taxes include taxes paidby individuals as well as firms dependent upon Port Everglades cargo, cruise, andship repair activity. 

2. METHODOLOGY

The impacts of Port Everglades presented in this FY2009 reportwere estimated based on telephone and personal interviews with 248 firms in theFort Lauderdale area (These 248interviews include a re-survey of the 235 interviews completed as part of theinitial baseline FY2006 report).    Thisrepresents the universe of the ocean cargo, and cruise related businesses (withthe exception of trucking and freight forwarding firms) in the Fort Lauderdale area,as defined in the "Port Everglades Facilities Guide & Directory 2008-2009","Port Everglades Department FTZ Tenant Directory" as well as the "FloridaCustoms Brokers and Forwarders Association Member Directory".  It is to be emphasized that a 99% responserate was achieved from these firms located in the Port directory and Port tenantlistings.  The direct impacts aremeasured at the firm level of detail, and aggregated to develop the impacts foreach of the Port's lines of business (cargo and cruise).  Each firm surveyed provided Martin Associateswith detailed employment levels (both full time and part time), annual payroll,local purchases and the residence of the employees.  Data collected from Port Everglades includes:Port Everglades Department employment, tonnage, cruise passenger activity,vessel (both cargo and cruise) calls, Port revenues and expenditures toestimate the FY2009 impacts.

The induced impacts are based on the most recent expenditureprofile of residents in the Miami-Fort Lauderdale/Miami area, as estimated bythe U.S. Bureau of Labor Statistics, "Consumer Expenditure Survey2006-2007".  This survey indicatesthe distribution of consumer expenditures over key consumption categories for FortLauderdale/Miami area residents.  Theconsumption categories are:

• Housing;
• Food at Restaurants;
• Food at Home;
• Entertainment;
• Health Care;
• Home Furnishings; and
• Transportation Equipment and Services.

The estimated consumption expenditure generated as a result ofthe respending impact is distributed across these consumption categories.  Associated with each consumption category isthe relevant retail and wholesale industry. Jobs to sales ratios in each industry are then computed for the FortLauderdale area, and induced jobs are estimated for the relevant consumptioncategories.  It is to be emphasized thatinduced jobs are only estimated at the retail and wholesale level, since thesejobs are most likely generated in the Fort Lauderdale area.  Further levels of induced jobs are notestimated since it is not possible to defensibly identify geographically wherethe subsequent rounds of purchasing occur.   

The "Consumer Expenditure Survey" does not include information toestimate the job impact with supporting business services, legal, socialservices, state and local governments, and educational services.  To estimate this induced impact, a ratio of Stateof Florida employment in these key service industries to total State of Floridaemployment is developed.  This ratio isthen used with the direct and induced consumption jobs to estimate induced jobswith business/financial services, legal, educational, governmental and othersocial services.

The indirect impacts are estimated based on the local purchasesby the directly dependent firms, combined with indirect job, income and revenuecoefficients for the supplying industries in the State of Florida as developedfor Martin Associates by the U.S. Bureau of Economic Analysis, RegionalInput/Output Modeling System (RIMS II 1997/2006). 

3. ECONOMIC IMPACT MODELS

The impacts are measured for FY2009, and computer models for bothcargo and cruise operations have been developed to test the sensitivity of theimpacts to changes in economic conditions and facility utilization.  It is to be emphasized that this study isdesigned to provide a framework which Port Everglades can use in formulatingand guiding the future development of Port facilities.  

3.1. Maritime Cargo Sensitivity

The cargo impact model is designed to test the sensitivity ofimpacts to changes in such factors as maritime tonnage levels, seaportproductivity and work rules, new seaport facilities development, inlanddistribution patterns of ocean cargo, number of vessel calls and theintroduction of new ocean carrier service.  The cargo impact model can also be used to assess the impact ofdeveloping a parcel of land as a maritime terminal versus other non-cargo landuses. Finally, the maritime cargo impact model can be used to assess theeconomic benefits of increased maritime activity due to infrastructuredevelopment and the opportunity cost of not undertaking specific maritimeinvestments such as dredging, new terminal development or warehousedevelopment.

3.2. Cruise Activity

The cruise service impact model provides a tool by which the Portcan evaluate changes in the types of cruises being offered, the size of vesselsdeployed, the number of passengers per cruise, the share of passengers stayingovernight in Fort Lauderdale area hotels prior to or after the cruise, and the numberof one day, overnight and multi-day (conventional) cruises. The cruise modelcan also be used to quantify the potential impact of new services, by size ofvessel and type of cruise.

Finally, the cruise impact model along with the maritime cargomodel can be used to evaluate the economic impact of a maritime terminal foruse as a cruise terminal versus a cargo terminal.

4. SUMMARY OF RESULTS

Exhibit I-1 provides a breakdown by cargo and cruise results forthe economic impact analysis of Port Everglades.

 Exhibit I-1 FY2009 EconomicImpact of Port Everglades Cargo and Cruise Activity*

*Totals may be rounded.

In FY2009, Port Everglades supported 143,185 jobs in the State ofFlorida.  Of these jobs, 9,948 jobs aredirectly created by port activities, while another 9,225 induced jobs are generatedin the Fort Lauderdale area as a result of local purchases made by thosedirectly employed due to Port Everglades activity.  In addition, there are 6,703 indirect jobssupported in the Fort Lauderdale area as the result of $463.9 million of localpurchases.  In addition, the cargo movingvia Port Everglades supports 117,310 jobs throughout the State of Florida. Themajority of these jobs are associated with the movement of containerized cargoat Port Everglades.

The 9,948 direct jobs received $379.4 million of direct wage andsalary income, for average earnings of $38,140 per direct employee.  As a result of local purchases with this $379.4million of direct wages and salaries, an additional $1.0 billion of income andlocal consumption expenditures were created in the Fort Lauderdale area.  It is this re-spending impact that supportedthe 9,225 induced jobs.^[1]  The indirect jobs holders received $272.6 millionin personal income. In total, $5.4 billion of personal income was created asthe result of Port Everglades operations, including the $3.7 billion receivedby those employed with the related users of the Port.

Local businesses received $2.1 billion of sales revenue fromproviding services to the ocean cargo activity and cruise activity.  This does not include the value of the cargomoving via the Port.  The cargo activityat the Port created an additional $11.7 billion of total economic output in thestate, the majority of which is created in the state's retail and wholesale anddistribution industries and the in-state industries supporting the movement anddistribution of containerized cargo imports and exports. It is to be emphasizedthat only the economic activity associated with the raw materials and finishedproducts that move via the Port is included. Port Everglades and other South Florida ports including the Port ofMiami are unique in the fact that a more balanced trade, that is inbound andoutbound, exists.  These jobs, whiledifficult to isolate, occur throughout the state including Broward andMiami-Dade counties. 

As a result of the cargo and cruise activity at Port Everglades,a total of $400.2 million of state and local tax revenue was generated (seepage 28 for detailed discussion).

The balance of the report describes the impacts created by maritimecargo and cruise service at Port Everglades.

II. ECONOMIC IMPACTS OF

MARITIME CARGO ACTIVITY

Waterborne cargoactivity at a seaport contributes to the local and regional economy bygenerating business revenue to local and national firms providing vessel andcargo handling services at the seaport terminals.  These firms, in turn, provide employment andincome to individuals, and pay taxes to state and local governments.  Exhibit II‑1 shows how activity at seaportterminals generates impacts throughout the local, state and nationaleconomies.  As this exhibit indicates,the impact of a seaport on a local, state or national economy cannot be reducedto a single number, but instead, the seaport activity creates severalimpacts.  These are the revenue impact,employment impact, personal income impact, and tax impact.  These impacts are non‑additive.  For example, the income impact is a part ofthe revenue impact, and adding these impacts together would result in doublecounting.  Exhibit II‑1 showsgraphically how activity at Port Everglades' maritime terminals generates thefour impacts.

Exhibit II‑1 Flow of EconomicImpacts Generated by Maritime Activity

At the outset,activity at the port generates business revenue for firms which provideservices.  This business revenue impactis dispersed throughout the economy in several ways.  It is used to hire people to provide theservices, to purchase goods and services, and to make Federal, state and localtax payments.  The remainder is used topay stock‑holders, retire debt, make investments, or is held as retainedearnings.  It is to be emphasized thatthe only portions of the revenue impact that can be definitely identified asremaining in the local/regional economy are those portions paid out in salariesto local employees, for local purchases by individuals and businesses directlydependent on the seaport, in contributions to state and local taxes, in leasepayments to Port Everglades by tenants, and wharfage and dockage fees paid tothe Port.

The employmentimpact of seaport activity consists of four levels of job impacts:

• Direct employment impact ‑- jobs directly generated by seaport activity.  Direct jobs generated by ocean cargo include jobs with railroads and trucking companies moving cargo between inland origins and destinations and the seaport terminals, longshoremen and dockworkers, steamship agents, freight forwarders, stevedores, etc.  It is to be emphasized that these are classified as directly generated in the sense that these jobs would experience near term dislocation if the activity at Port Everglades maritime terminals were to be discontinued.

•  Induced employment impact ‑- jobs created throughout the local economy because individuals directly employed due to seaport activity spend their wages locally on goods and services such as food, housing and clothing.  These jobs are held by residents located throughout the region, since they are estimated based on local and regional purchases.

•  Indirect Jobs ‑‑ are jobs created locally due to purchases of goods and services by firms, not individuals.  These jobs are estimated directly from local purchases data supplied to Martin Associates by the companies interviewed as part of this study, and include jobs with local office supply firms, maintenance and repair firms, parts and equipment suppliers, etc.

•  Related shipper/consignee (related user) jobs ‑‑ jobs with shippers and consignees (exporters and importers) supported in the state's manufacturing and retail and wholesale distribution industries and the in-state industries supporting the movement and distribution of all commodities, primarily containerized cargo imports and exports using the seaport terminals for shipment and receipt of cargo.    

The personalearnings impact is the measure of employee wages and salaries (excludingbenefits) received by individuals directly employed due to seaportactivity.  Re-spending of these earningsthroughout the regional economy for purchases of goods and services is alsoestimated.  This, in turn, generates additionaljobs ‑‑ the induced employment impact. This re-spending throughout the region is estimated using a regionalpersonal earnings multiplier, which reflects the percentage of purchases byindividuals that are made within the Fort Lauderdale area.  The re-spending effect varies by region--  a larger re-spending effect occurs inregions that produce a relatively large proportion of the goods and servicesconsumed by residents, while lower re-spending effects are associated withregions that import a relatively large share of consumer goods and services(since personal earnings "leak out" of the region for these out‑of‑regionalpurchases).  The direct personal earningsare a measure of the local impact since they are received by those directlyemployed by seaport activity. 

Tax impactsare payments to the state and local governments by firms and by individualswhose jobs are directly dependent upon and supported (induced jobs) by activityat the seaport terminals. 

1. IMPACT STRUCTURE

Economic impactsare created throughout various business sectors of the state and local economies.Specifically, four distinct economic sectors are impacted as a result ofactivity at the seaport terminals.  Theseare the:

• Surface Transportation Sector;
• Maritime Services Sector;
• Related Shippers/Consignees Sector; and
• Port Everglades Department.

Within eachsector, various participants are involved. Separate impacts are estimated for each of the participants.  A discussion of each of the economic impactsectors is provided below, including a description of the major participants ineach sector.

1.1.The Surface Transportation Sector

 The surfacetransportation sector consists of both the railroad and truckingindustries.  The trucking firms andrailroads are responsible for moving the various cargoes between the seaport terminalsand the inland origins and destinations. Also included is the pipeline transportation of petroleum productsreceived at the Port and destined for airports and end users within the region.

1.2.The Maritime Services Sector

This sector consists of numerousfirms and participants performing functions related to the following maritimeservices:

• Maritime Cargo Transportation;
• Vessel Operations;
• Cargo Handling; and
• Federal, State and Local Government Agencies.

A briefdescription of the major participants in each of these four categories isprovided below:

• Maritime Cargo Transportation
  Participants in this category are involved in arranging for inland and water transportation for export or import freight.  The freight forwarder/customs broker is the major participant in this category.  The freight forwarder/customs broker arranges for the freight to be delivered between the terminals and inland destinations, as well as the ocean transportation.  This function performed by freight forwarders and customshouse brokers is most prevalent for containerized and general cargo commodities.

• Vessel Operations
  This category consists of several participants.  The steamship agents provide a number of services for the vessel as soon as it enters the port.  The agents arrange for medical and dental care of the crew, for ship supplies as well as payment of various expenses including Port Everglades Department charges.  The agents are also responsible for vessel documentation.  In addition to the steamship agents arranging for vessel services, those providing the services include:
  ‑           Chandlers ‑ supply the vessels with ship supplies (food, clothing, nautical equipment, etc.);
  ‑           Towing firms ‑ provide the tug service to guide the vessel to and from port;
  -           Pilots - assist in navigating the vessels to and from Port Everglades' maritime terminals;
  ‑           Bunkering firms ‑ provide fuel to the vessels;
  ‑           Marine surveyors ‑ inspect the vessels and the cargo; and
  -            Shipyards/marine construction firms ‑ provide repairs (either emergency or scheduled) as well as marine pier construction and dredging.

• Cargo Handling
  This category involves the physical handling of the cargo at the terminals between the land and the vessel.  Included in this category are the following participants:
  ‑           Longshoremen & dockworkers ‑ include members of the International Longshoremen's Association (ILA), as well as the Teamsters Union and those dockworkers with no union affiliation that are involved in the loading/unloading of cargo from the vessels, as well as handling the cargo prior to loading and after unloading;
  ‑           Stevedoring firms ‑ manage the longshoremen and cargo‑handling activities.  Stevedoring services at Port Everglades are provided by private stevedoring companies franchised by Broward County;
  -            Cargo terminal operators ‑ provide services to operate the maritime terminals, track cargo movement and provide security where cargo is loaded and off-loaded, as well as the petroleum terminal and pipeline operators which includes petroleum tank farm operations;
  -            Warehouse operators ‑ store cargo after discharge or prior to loading and consolidate cargo units into shipment lots.  In many cases the freight forwarders and consolidators are also involved in warehousing activity.
  -            Foreign Trade Zone (FTZ) tenants - operate facilities in the Port Everglades Foreign Trade Zone and in non-contiguous FTZ's in Broward established under Port Everglades' FTZ.

• 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.  Department of Homeland Security (DHS),which includes Customs and Border Protection (CBP), US Immigration and Customs Enforcement (ICE) and U.S. Coast Guard, U.S. Department of Labor, U.S. Department of Agriculture and the U.S. Army Corps of Engineers, are involved.  These services are provided by the government offices located in the Fort Lauderdale area. The Broward Sheriff's Office (BSO), including fire/rescue department and Florida Department of Law Enforcement (FDLE) are also included in this group.

1.3. Related Shipper/Consignees of

Port Everglades Sector

 Related jobsconsist of jobs with related shippers/consignees shipping and receiving cargothrough the public cargo terminals at Port Everglades.  While these impacts are generated by allcommodities, the majority of these users are attributed to containerized importand export cargo through the Port.  Onlythe user industry activity that can be linked to the movement of cargo (eitherraw materials or finished products) through Port Everglades is considered inthis related user impact.

1.4. PortEverglades Department

The PortEverglades Department includes those individuals employed by Broward County whosepurpose is to oversee port activity at the port's cargo and cruise terminals.  The seaport department provides basicinfrastructure, establishes usage rules and tariff rates, markets the seaportfacilities, and negotiates long-term agreements and leases.  The port's Operations Division control berthingand provides Harbormaster and line handling services.  The Port Everglades Department is anenterprise fund which operates from user fees and not taxes. 

2. COMMODITIES INCLUDED IN THEANALYSIS

A major use ofan economic impact analysis is to provide a tool for port developmentplanning.  As a port grows, availableland and other resources for port facilities become scarce, and decisions mustbe made as to how to develop the land and utilize the resources in the mostefficient manner.  Various types offacility configurations are associated with different commodities.  For example, containers, automobiles andRO/RO require a large amount of paved, open storage space, while certain typesof break bulk cargoes such as steel coil, lumber and plywood may requirecovered storage.  Perishable commoditiesrequire temperature controlled warehouses and some dry bulk cargo requirescovered storage and special dust removing equipment, while tank farms areneeded to store liquid bulk cargo.

An understandingof the commodity's relative economic value in terms of employment and income tothe local community, the cost of providing the facilities, and the relativedemand for the different commodities is essential in making future portdevelopment plans.  Because of this needfor understanding relative commodity impacts, economic impacts are estimatedfor the following commodities handled at the public and private cargo terminals:

• Containers (dry and refrigerated) - Containerized cargo moved to/from vessel via crane or driven onto/off vessels while container is still on a truck chassis;
• Steel Coils and Steel Rebar - breakbulk (non-containerized) steel products handled at the terminal by various lifting methods;
• Lumber/Plywood - breakbulk (non-containerized) forest products handled at the terminal using various lifting methods;
• RO/RO - breakbulk cargo that is defined as Roll-on/Roll-off indicating which is driven onto/off vessels including automobiles, buses, tractors, trucks and yachts (yachts may be lifted or also designated as Float-on/Float-off (FLO/FLO);
• Gypsum - bulk cargo discharged from vessel by conveyor or pneumatic discharge system;
• Cement - bulk cargo discharged from vessel by conveyor or pneumatic discharge system;
• Other Dry Bulk - other dry bulk cargoes not specified ; and
• Petroleum Products - liquid bulk cargoes including jet fuel, gasoline and oils discharged from vessels by pumps attached to vessel.

It should beemphasized that commodity‑specific impacts are not estimated for each of theeconomic sectors described in Section II.1. Specific impacts could not be allocated by individual commodities withany degree of accuracy for maritime construction, ship repair, or the state andFederal government due to the fact that it is difficult to estimate the percentageof resources that are dedicated to one commodity over another.  For example, maritime construction may occur ata terminal that is multi-use and cannot be attributed to a specific commodity.Similarly, law enforcement and security operations of BSO cannot be attributedto a single commodity.   

3.  MARITIME CARGO EMPLOYMENTIMPACTS

The employmentgenerated by maritime cargo activity at Port Everglades is estimated. 

• First, the total employment that is in some way related to the activities at cargo terminals is estimated from the FY2009 interview process of 248 service providers and tenants and FY2009 data provided by the Port Everglades Department as described in the methodology;

• Second, the subset of total employment that is judged to be totally dependent (i.e., direct jobs) on port activity is analyzed as follows:
  -          The direct job impact is estimated by detailed job category, i.e., trucking, ILA/dockworkers, freight forwarders/customshouse brokers/warehouse and consolidators, steamship agents, chandlers, surveyors, etc;
  -          The direct job impact is estimated for each of the key commodities/commodity groups;
  -     The direct job impact is estimated based on the residency of those directly employed;

• Induced and indirect jobs are estimated;

• Finally, jobs related to the maritime activity at the cargo terminals are described.

It is estimatedthat 132,980 jobs are directly or indirectly generated by port activities at thecargo terminals within Port Everglades Jurisdictional Boundary (PJB).  Of the 132,980 jobs:

• 5,617 jobs are directly generated by activities at the cargo terminals and if such activities should cease, these jobs would be discontinued over the short term.

• 6,283 jobs (induced jobs) are supported by the local purchases of the 5,617 individuals directly generated by port activity at the cargo terminals. An additional 3,771 indirect jobs were supported by $334.0 million of purchases in the local and regional economy by firms providing direct cargo handling and vessel services.

• 117,310 jobs related to cargo imported and exported over the docks at Port Everglades.  These jobs are supported in the state's manufacturing and retail and wholesale and distribution industries and the in-state industries supporting the movement and distribution of all commodities, primarily concentrated with containerized cargo imports and exports using the seaport terminals for shipment and receipt of cargo.   

3.1.Direct Maritime Cargo Job

Impacts

In FY2009, about21.5 million tons of waterborne cargo moved via Port Everglades.  As a result of this activity, 5,617 full‑timejobs were directly created^[2].In this section the jobs are analyzed in terms of:

• Distribution by job category;
• Distribution by commodity group; and
• Distribution by county and state of residency.

These distributions are developedin more detail below.

3.1.1. Job Impacts by Category

Exhibit II‑2presents the distribution of the 5,617 direct jobs by type of job.  The exhibit indicates that the majority ofdirect jobs are with trucking jobs moving cargo to and from the terminals,followed by ILA and dockworkers, marine construction, and then terminaloperators/stevedores.

Exhibit II-2 FY2009 Cargo EmploymentImpacts by Sector and Job Category

3.1.2.Direct Job Impacts by Commodity

Most of the 5,617jobs considered to be generated by port activity can be associated with thehandling of specific commodities or commodity groups.  Certain employment categories such asgovernment employees and employees with maritime construction and ship repair cannotbe identified with a specific commodity. As a result, employment in these groups (which totaled 1,530) was notallocated to commodity groups.  ExhibitII-3 presents the relative employment impacts in terms of commoditygroups. 

 Exhibit II-3 FY2009 Distributionof Direct Cargo Job Impact by Commodity

The movement of containerizedcargo (including reefer containers) creates the largest number of direct jobs,2,471, followed by the movement and distribution of finished petroleum products(1,425 jobs). The majority of the remaining direct jobs is supported by the movementof cement, RO/RO and rebar.

3.1.3. Distribution of Direct Cargo Jobs by Place of Residency

To underscorethe geographic scope of the impacts generated by the cargo terminals, ExhibitII-4 presents the distribution of the 5,617 direct jobs by place of residency. Thegeographic employment analysis is based on the results of the interviews with 248 firms in the maritime community.  As this exhibit indicates, about 70% of thedirect job holders reside in Broward County, followed by about 26% residing inMiami-Dade County.

 Exhibit II-4 FY2009 Distributionof Direct Cargo Jobs by Place of Employment

ExhibitII-5 shows the distribution of the residency of the direct jobs within BrowardCounty. Of those residing in Broward County, about 54.1% reside in FortLauderdale, followed by 14.3% residing in Hollywood, 8.7% in Pompano Beach, and4.6% in Sunrise.   

 ExhibitII-5 FY2009 Distribution of Direct Jobs by Jurisdiction within Broward County

3.2. Induced Job

The 5,617 directlyemployed individuals due to activity at the cargo terminals received wages andsalaries, a part of which was used to purchase local goods and services such asfood, housing, clothing, transportation services, etc.  As a result of these local purchases, 6,283 jobsin the regional economy were supported. The majority of the induced jobs are with local and regional privatesector social services, business services, educational services and state andlocal government agencies, followed by jobs in the food and restaurant sector,and then jobs in the construction and home furnishings sector.

3.3. Indirect Jobs

 In addition to the induced jobs generated bythe purchases by directly employed individuals, the firms providing thedirect services and employing the 5,617 direct jobs make local purchases forgoods and services.  These localpurchases by the firms dependent upon the cargo facilities generate additionallocal jobs - indirect jobs.  Based oninterviews with the 248 firms, these firms made $334.0 million of local andin-state purchases in FY2009.  Thesedirect local purchases created an additional 3,771 indirect jobs in the localeconomy.

3.4. Related User

(Shipper/Consignee) Jobs

 It is estimated that about 117,310 jobs are supported in Florida withshippers/consignees that use Port Everglades.   It is important to emphasize that the userjobs are supported by the cargo moving only via Port Everglades in FY2009, anddo not include jobs supported by cargo moving via other ports that are consumedor produced by in-state shippers/consignees and manufacturers.

            Toestimate the related user impact for containerized cargo, the average value perton of each containerized imports and exports was estimated using U.S. MaritimeAdministration, Foreign Trade Statistics and Port Everglades Department(through queries of PIERS data). The employment to value of output coefficientfor the retail sector related to the exported and imported containerized cargoeswas then computed from Bureau of Economic Analysis, Regional Input-Output Modelfor the State of Florida.    To estimatethe related containerized cargo jobs, the average value per ton ofcontainerized cargo was multiplied by the tons handled at the Port. The jobcoefficient was next multiplied by the value of the containerized cargo movingvia the Port to estimate the related jobs with exported and importedcontainerized cargo. The value was adjusted to reflect retail margins.

For breakbulk cargoes, the associated consuming and producingindustries were identified with each commodity. For example, for imported ironand steel products,  and lumber andplywood,  relationships were developed toconvert the dollar value of these imported materials into a dollar value ofoutput in the key consuming industries, which include construction and metalfabrication industries.  Relationshipsbetween the values of inputs to the value of outputs in these industries wereestimated using latest data available (2002 Series) from the U.S. Bureau ofCensus, including Census of Manufacturing and Census of Construction.  These ratios were then used to convert thedollar value of the imported breakbulk and bulk cargoes, including petroleuminto a dollar value of output in the consuming industries in the state. Usingthe respective jobs to value of output multipliers for these industries fromthe Bureau Of Economic Analysis, Regional Input-Output Modeling System (RIMSII)model, the value of the breakbulk and bulk cargoes (i.e., steel products,lumber/plywood, cement and petroleum) moving via the Port and remaining in (orproduced in) the State of Florida was converted into related shipper/consigneejobs with these users and associated supporting industries within the state.

            Forcement, the final demand job multiplier for cement production and constructionactivity in Florida was developed from the RIMSII data.  This multiplier was then applied to thedirect jobs associated with the movement of the cement via Port Everglades.

            Finally,the direct, induced and indirect port sector job impacts associated with eachof the cargoes for which related shipper/consignee jobs were estimated weresubtracted from the total related jobs (by commodity and cargo type) to avoiddouble counting, as the related shipper/consignee jobs include job impacts ateach stage of handling the imported and exported cargo, such as the portactivity and the trucking and rail activity to move the cargo to and from thePort and the induced and indirect jobs associated with the direct port activity.

4. TOTAL ECONOMIC OUTPUT, BUSINESSREVENUE, INCOME AND TAX IMPACTS

The 21.5 milliontons of containerized, bulk (dry and liquid) and neo-bulk cargo handled at the cargoterminals included in the study generated revenue for firms in each of theeconomic sectors.  For example, revenueis received by the railroads, the trucking companies and pipelines within thesurface transportation sector as a result of moving export cargo to the seaportterminals and distributing the imported commodities inland after receipt at thecargo terminals.  The firms in themaritime services sector receive revenue from arranging for transportationservices, cargo handling, providing services to vessels in port and repairs tovessels calling the port facilities.  ThePort Everglades Department receives revenue from terminal leases and portcharges such as wharfage and dockage assessed on cargo and vessels.  In addition, revenue is received byshippers/consignees from the sales of cargo shipped or received via the seaportcargo terminals and from the sales of products made with raw materials receivedthrough the terminals.  Since thischapter is concerned with the revenue generated from providing maritimeservices, the shipper/consignee revenue (i.e., the value of the cargo shippedor received through the seaport terminals, as well as the value of the productsproduced by the port-dependent shippers/consignees) will be excluded from theremaining discussion.

The revenuegenerated by port activity consists of many components.  For example, gross revenue is used to payemployee salaries and taxes, it is distributed to stockholders of the companiesproviding the vessel and cargo handling services, and it is used for thepurchases of equipment and maintenance services.  Of these components, only three can beisolated geographically with any degree of accuracy.  These are the personal income component ofrevenue, which can be traced to geographic locations based on the residence ofthose receiving the income, the payment of state and local taxes, and the localpurchases made by firms dependent upon the maritime activity.  The balance of the revenue is distributed inthe form of payments to firms located outside the Fort Lauderdale areaproviding goods and services to the economic sectors and for the distributionof company profits to shareholders.  Manyof these firms and owners are located outside of the State of Florida and,thus, it is difficult to trace the ultimate location of the distributed revenue(other than personal income, taxes and local purchases). The value of outputcreated by in-state related shippers/consignees of the Port is attributed tothe State of Florida, and the local purchases from other firms within the stateare also included in this user output measure, as defined by the in-stateoutput coefficients (for the user industries) developed from the U.S. Bureau ofEconomic Analysis, Regional Input-Output Modeling System (RIMSII).

4.1. Revenue Impact - Total

Economic Activity

 The revenue impact is a measure ofthe totaleconomic activity in the state that is generated by the cargomoving via Port Everglades.  In FY2009, maritimecargo activity at the Port generated a total of $12.5 billion of total economicactivity in the state. Of the $12.5 billion, $809.0 million is the directbusiness revenue received by the firms directly dependent upon the Port andproviding maritime services and inland transportation services to the cargohandled at the maritime terminals and the vessels calling the port.  The remaining $11.7 billion represents thevalue of the output to the State of Florida that is created due to the cargomoving via Port Everglades.  Thisincludes the value added at each stage of producing an export cargo, as well asthe value added at each stage of production for the firms using imported rawmaterials and intermediate products that flow via Port Everglades and areconsumed by industries within the State of Florida.  The balance of the discussion focuses on the $809.0million of direct business revenue generated from the provision of services tothe cargo and vessels handled at Port Everglades.

4.1.1. Revenue Impacts byEconomic Sector/Category

Exhibit II-6presents the total revenue estimated to have been generated by port activity inFY2009.  This revenue includes therevenue received by firms providing services to the commodity and vesselactivity at the cargo terminals, and includes revenue received by truckingfirms, stevedores, Port Everglades Department, chandlers, agents, pilots,towing companies, etc.  Not included isthe revenue from the use/value of the cargo moving via the maritime terminals,as this is included in the related shipper/consignee output.  

Thewarehousing/consolidation and freight forwarding/brokerage operation receivesthe largest revenue impact, followed by trucking operations, marineconstruction, FTZ activity and then terminal operations.  It should be noted that the marineconstruction figure is tied to the level of capital construction during theperiod, which is significant during FY09, and is not tied to a specificcommodity.

 Exhibit II‑6 FY2009 DirectRevenue Generated By Port Cargo Activity

4.1.2.Revenue Impacts by Commodity

           Exhibit II-7 shows the direct revenueimpact by commodity.  It is to beemphasized that the revenue received by shippers/consignees from the sales ofthe products (value of the commodities) moving via the seaport terminals is notincluded, since product value is determined by the demand for the product, notthe use of the cargo terminals.   

 Exhibit II-7 FY2009 Cargo RevenueImpacts by Commodity

            Asthis exhibit indicates containerized cargo (dry and refrigerated) generate thelargest direct revenue impacts, followed by petroleum products.

5. PERSONAL EARNINGS IMPACT

Theincome impact is estimated by multiplying the average annual earnings(excluding benefits) of each port participant, i.e., truckers, steamshipagents, pilots, towing firm employees, longshoremen, warehousemen, etc., by thecorresponding number of direct jobs in each category.  The individual annual earnings in eachcategory multiplied by the corresponding job impact resulted in $254.8 millionin personal wage and salary earnings.  Itis important to emphasize that the average annual earnings of a port-dependentjob is about $45,360.  These relativelyhigh paying jobs will have a much greater economic impact in the local economythrough stimulating induced jobs than will a job paying lower wages.  

Theimpact of the re-spending of this direct income for local purchases isestimated using a personal earnings multiplier. The personal earnings multiplier is based on data supplied by the Bureauof Economic Analysis (BEA), Regional Input-Output Modeling System (RIMSII).  The BEA estimates that for everyone dollar earned by direct employees generated by activity at the cargo terminals,an additional $2.87 of personal income and consumption expenditures would becreated as a result of re-spending the income for purchases of goods andservices produced locally.  Hence, apersonal earnings multiplier of $3.87 was used to estimate the total income andconsumption impact of $731.9 million, inclusive of the re-spending effect.  This additional re-spending of the directincome generates the 6,283 induced job impacts.

            The 3,771 indirect job holdersearned $179.4 million in indirect wages and salaries. The 117,310 related shipper/consigneesof the cargo moving via the Port received about $3.7 billion of personalincome.

            Therefore, the total personal incomeimpact and consumption impact created by Port Everglades ocean cargo activityis estimated at just over $4.9 billion.

6. TAX IMPACTS

Stateand local tax impacts are based on per employee tax burdens which are developedat the county, local and state jurisdictional levels.  These tax per employee burdens areessentially tax indices that are used to allocate total taxes at each level ofgovernment to economic activity generated by the cargo terminals.  To estimate the per employee tax indices,total taxes received at each governmental level in Florida was developed fromthe Tax Foundation, which reports total state and local taxes from all sourcesas a percent of total personal income.

Cargoactivity generated $86.3 million of state, county and local taxes.  As a result of the economic activity createdby the related shipper/consignees an additional $276.9 million of state andlocal taxes were generated for a total cargo tax impact of $363.1 million.  The State of Florida receives approximately 53.2%of the tax revenues, while the local governments received 46.7% of the taximpact as illustrated in Exhibit II-8.

 Exhibit II-8 FY2009 Distributionof State and Local Tax Revenue

7. COMPARISON OF CARGO IMPACTS FY2008 TO FY2009

The purpose of this section is to provide a comparison of theeconomic impacts generated by Port Everglades cargo activity between FY2008 andFY2009.  The methodology used by MartinAssociates to estimate the economic impacts generated by seaport activity isidentical to the methodology used to estimate the economic impacts of the seaportin FY2006, and therefore, direct comparisons can be made.

 Exhibit II-9 Comparison of CargoImpacts FY2008-FY2009

                Totalsmay not add due to rounding

Declines in economic impacts over all but one category areevident in Exhibit II-9 due to a decrease in traffic for all commodities inFY2009 due to the economic recession. Specifically, containerized cargo activity declined from nearly 6.6million tons in FY2008 to 5.2 million tons in FY2009 - representing a 27%decline.  Similarly, bulk tonnageincluding cement and aggregates used in the construction declined even furtherfrom normal levels.   Petroleum products through the port were offby 5% from the previous year, representing the lowest tonnage throughput since2000. The decline in breakbulk cargoes such as steel and lumber can also beattributed to the downturn in regional economic conditions and the resulting declinein construction activity in the region.  Direct,induced and indirect jobs fell by 1,440 while related user jobs exhibited to adecline of 39,466.  Personal income fellby $1.3 billion, the majority of which was attributed the loss of related userjobs throughout the state.

Business revenue fell by $36.0 million over the period, whilerelated user output decreased by $4.0 billion. Localpurchases are the only category that exhibited an increase over the previousfiscal year.  This increase can beattributed to updated survey data identified from the 248 firms interviewed aspart of this analysis. 

State and local tax revenue declined by $210.4 million over theone-year period.  This loss of taxrevenue is not only attributed to the decrease in jobs, but also the fact thatthe Tax Foundation revised their methodologies in calculating tax burdensresulting in figures that indicate that the tax burden per employee in Floridahas declined 27% since the FY2006 baseline analysis.  

III. ECONOMIC IMPACTS OF CRUISE

In FY2009, about 1,007 cruise vessel callswere recorded at Port Everglades, carrying approximately 1.56 million embarkingpassengers. It is important to note that the vast majority of these are allcruise calls by homeported vessels in contrast to in-transit calls.  The key difference between an in-transit calland a homeport call is the fact that a vessel home porting will take onpassengers and supplies at Port Everglades, while a vessel making anintermediate in-transit call typically does not take on or discharge new passengersand neither does the vessel take on supplies from local chandlers and caterers,as well as use local services such as advertising, maintenance and repair,linen services, etc.  Hence, a call by ahomeported vessel will generate a greater economic impact than an in-transitcall.  Also included in the passenger andvessel call counts are daily and two-day cruises to the Bahamas.  

Tomeasure the economic impact of the cruise service, Martin Associates developeda cruise impact model. The model can be used to test the sensitivity of theimpacts to changes in the percent of passengers flying into the Fort Lauderdale-HollywoodInternational Airport versus the percent of passengers driving to the Port, theshare of passengers staying in hotels prior to and after the cruise, the localexpenditures by passengers while in hotels either before or after the cruise,and the local purchases by the cruise lines for food, liquor, and othersupplies and services.  The impact ofchanges in the mix of the size of vessels and the number of cruises by size ofvessel and itinerary can also be evaluated using the model.

1. ECONOMIC IMPACT STRUCTURE

Cruiseservice related to the home porting of a vessel contributes to the local andregional economies by providing employment and income to individuals, taxrevenues to local and state governments, and revenue to businesses engaged inproviding operational services and supplies to the vessels and passengers. Theflow of cruise industry-generated economic impacts throughout an economycreates four separate and non‑additive types of impacts.  These four types of impacts are:

• Employment Impact - represents the number of full‑time equivalent jobs generated by cruise activity at Port Everglades. This consists of jobs directly generated by the home porting of cruise vessels as well as induced jobs, or jobs created in the Fort Lauderdale area due to the purchase of goods and services by those individuals directly dependent upon cruise activity.

• Income Impact ‑ the level of earnings associated with the jobs created by cruise activity, and adjusted to reflect respending throughout the economy.

• Revenue Impact ‑ the sales generated by firms engaged in supplying services and materials to the vessels while in port, as well as firms in the Fort Lauderdale area visitor industry that supply services to cruise passengers staying in hotels before and after the cruise. The value of the cruise tickets is not included as a revenue impact except for those cruise services based in Fort Lauderdale that provide the daily/two-day cruises. These cruise vessels include the Discovery (and the Imperial Majesty until its operations ceased in mid-fiscal year).

• Tax Impacts - includes the state and local tax revenues generated by cruise activity. These are taxes paid by individuals directly dependent upon the cruise activity.

            The methodology used to estimate these impacts isdescribed in the following section.

2. ECONOMIC IMPACT OF HOMEPORT CALLS

Homeportactivity at Port Everglades affects two sectors of the local and regionaleconomy:

• Maritime Service Sector; and
•   Visitor Industry Sector.

Separateimpacts are estimated for each of the various economic categories supplyinggoods and services to the cruise ships and passengers.  A discussion of each of the impact categoriesis provided below.

Thetypical expenditure profile of a cruise line while in port provides an understandingof the types of firms involved in providing goods and services to the vesseland its passengers.  These expenditurecategories are:

• Food and Beverage - This category includes wholesale food and liquor distributors. It is to be emphasized that in some cases the non-perishable food brought on board at the beginning of a cruise is not necessarily purchased locally, but based on contractual relationships and is trucked in from out of the area. Similarly, in some cases, liquor is purchased from in-bound warehouses, and not from local distributors. Interviews with the cruise operators identified the amount spent locally.

• Logo Items - These items are typically purchased under contract and are trucked into the port of embarkation. Therefore, no local impact is estimated.

• Flowers - Local wholesale flower distributors supply flowers for each cruise.

• Public Relations and Advertising - Contracts are usually developed with local advertising firms to promote the cruise. This is especially the case for the local cruises providing daily/two-day cruise services.

• Parking - The Port parking management companies provide parking services for the cruise passengers.

• Taxis/buses - Local taxis and buses provide transportation between the airport and the ship or between the hotel and the ship for air/sea passengers.

• Security - Security services are hired while the ship is in port.

• Linen services - Contracts are developed with local laundries for linen and laundry services.

• Pilots - State licensed and locally based operators guide the cruise ships into the terminal.

• Tugs - Tug services are required for certain cruise ships to assist in docking and undocking. However, most cruise vessels require minimal, if any, tug assists.

• Stevedoring - Required in loading and unloading baggage and ship stores.

• Linehandling - (Provided by the Port Everglades Department) securing and unsecuring the vessel to the dock

• Local and Regional Travel Agencies - Local travel agencies will receive a commission from ticket sales to area residents.

• Waste Disposal - Solid waste and other refuse that cannot be discharged at sea will be disposed by local refuse collectors.

• Bunkers - Fuel will be purchased from local bunkering companies.

• Water- Most cruise ships manufacture water at sea, but will still purchase some water locally prior to departure.

• Visitor Industry - In addition to the impacts generated by direct vessel purchases, 43.3% of the multi-day cruise passengers stay in hotels either before or after the cruise. These individuals will typically purchase incidental retail items before or after the cruise and eat in local hotel restaurants while in the Fort Lauderdale area. Also, these air/sea passengers will take cabs/buses from the airport to the hotel or ship, as well as taxis between the hotel and the ship and throughout the city. In addition to passengers impacting the local visitor industry, the ship's crew will also impact the local industry. For example, the crew will likely purchase personal incidentals while in port. Also, a portion of the crew could be rotated on each sailing. The new crew may stay in a local hotel upon arrival, while the departing crew may also stay in a hotel prior to leaving the area. The crews of the daily/two-day sails are treated as based in Fort Lauderdale.

            In addition, the passengers arrivingvia the Fort Lauderdale-Hollywood International Airport also generate impactson site at the airport, including jobs with airlines (ticket agents, baggage,concessions, taxis, security, etc.). To estimate the impact on the Airport,Martin Associates used average impact ratios developed from our numerousairport impact studies conducted for such airports as Miami InternationalAirport, Atlanta Hartsfield International Airport, Washington Dulles and ReaganNational Airports, Baltimore-Washington International Airport, San FranciscoInternational Airport, and Seattle-Tacoma International Airport.

Theeconomic impact analysis of cruise service at Port Everglades is based on the2009 baseline telephone survey of cruise lines calling the Port, includingCarnival Cruise Lines, Royal Caribbean International, Princess Cruise Lines andHolland America Line currently serving PortEverglades.  In addition, baselineinterviews were conducted with two operators of the daily/two-day cruiseservices - Discovery, and the Celebration Cruise Line.  Data was also collected from the Port EvergladesDepartment as well as in-house data bases. While budgetary constraints of the project did not allow for detailedpassenger surveys, which Martin Associates typically conducts as part of thecruise impact studies at other ports, results of an origin and destinationsurvey conducted as part of the Broward County People Mover PD&E studyconducted by Lea+Elliott, Inc. were used to better calibrate the cruise servicemodel.

Theinterviews of cruise lines focused on typical expenditure profiles of a vesselwhile in port as well as the percent of crew that are rotated on/off duringeach sailing.  Incidental expenses bycrew while in port were also estimated from the interviews as well as in-housedata.  The percent of passengers that areair/sea versus drive-in, the percent of visitor versus local passengers, andthe share of passengers spending a pre/post night in Fort Lauderdale were developedfrom the preliminary results of the Lea+Elliott, Inc. Broward County PeopleMover PD&E Study which entailed a survey of nearly 3,000 Port Evergladespassengers conducted between February 26, 2007 and March 11, 2007.  The price of the land-side portion of thosestaying in Fort Lauderdale was determined from the interviews with FortLauderdale Convention and Visitors Bureau and recent surveys of cruisepassengers at other ports to estimate local visitor industry impacts. 

The induced impacts are based on the most recent expenditureprofile of residents in the Miami-Fort Lauderdale area, as estimated by theU.S. Bureau of Labor Statistics, "Consumer Expenditure Survey 2006-2007".  This survey indicates the distribution ofconsumer expenditures over key consumption categories for Fort Lauderdale arearesidents.  The consumption categoriesare:

• Housing;
• Food at Restaurants;
• Food at Home;
•  Entertainment;
• Health Care;
• Home Furnishings; and
• Transportation Equipment and Services.

The estimated consumption expenditure generated as a result ofthe respending impact is distributed across these consumption categories.  Associated with each consumption category isthe relevant retail and wholesale industry. Jobs to sales ratios in each industry are then computed for the FortLauderdale area, and induced jobs are estimated for the relevant consumptioncategories.  It is to be emphasized thatinduced jobs are only estimated at the retail and wholesale level, since thesejobs are most likely generated in the Fort Lauderdale area.  Further levels of induced jobs are notestimated since it is not possible to defensibly identify geographically wherethe subsequent rounds of purchasing occur.   

The "Consumer Expenditure Survey" does not include information toestimate the job impact with supporting business services, legal, socialservices, state and local governments, and educational services.  To estimate this induced impact, a ratio ofState of Florida employment in these key service industries to total State of Floridaemployment is developed.  This ratio isthen used with the direct and induced consumption jobs to estimate induced jobswith business/financial services, legal, educational, governmental and othersocial services.

The indirect impacts are estimated based on the local purchasesby the directly dependent firms, combined with indirect job, income and revenuecoefficients for the supplying industries in the State of Florida as developedfor Martin Associates by the U.S. Bureau of Economic Analysis, RegionalInput/Output Modeling System. 

            The cruise service impact modelprovides a tool by which the Port can evaluate changes in the types of cruisesbeing offered, the size of vessels deployed, the number of passengers percruise, the share of passengers staying overnight in Fort Lauderdale areahotels prior to or after the cruise, and the number of one day cruises andmulti-day cruises. The cruise model can also be used to quantify the potentialimpact of new services, by size of vessel and type of cruise. Finally, thecruise impact model along with the maritime cargo model can be used to evaluatethe economic impact of a seaport terminal for use as a cruise terminal versus acargo terminal.

3. CRUISE SERVICE IMPACT MODEL

            Inorder to assess the economic impacts of potential cruise business at PortEverglades, Martin Associates developed a spreadsheet framework, which can beused to assess the impacts of changes in such factors as:

• Number of cruise vessel calls;
• Number of passengers;
• Passenger characteristics:
  -        Local expenditures;
  -        Local residents versus tourists;
  -        Length of pre/post night stay in Fort Lauderdale area;

• Size of crew; and
• Size of vessel.

This model will estimate the impacts of current cruiseoperations at Port Everglades.

4. PORT EVERGLADES CRUISEOPERATIONS FY2009

            Duringthe FY2009 cruise season, 1,007 cruises called the Port carrying just over 3.1million total embarking and debarking passengers, or about nearly 1.56 millionactual individual passengers.  The cruiseoperations at Port Everglades are divided into conventional multi-day cruisesas well as daily/two-day cruise operations. Exhibit III-1 illustrates the FY2009 cruise season by type of cruise andcruise line.

 Exhibit III-1 FY2009 Cruise Callsand Passengers by Cruise Line

                                 Source: Port Everglades Department

                        *ImperialMajesty discontinued operations during the fiscal year

Based on the results of the October2007 passenger origin & destination study conducted by consultant Lea+Elliott,Inc., approximately 43% of the Port Everglades cruise passengers arrived to theport from a hotel.  Of those 43% ofpassengers that stayed in a hotel, approximately 83% arrived in the FortLauderdale area via air, while 17% arrived by other modes. In addition, nearly32% arrived directly from an airport (97% from Fort Lauderdale-HollywoodInternational Airport), while 25% originated from a private residence asdepicted in Exhibit III-2. 

 Exhibit III-2 Origin of PortEverglades Cruise Passengers

               Source: Lea+Elliott, Inc.

Asillustrated in Exhibit III-3, approximately 27% of the cruise passengersarrived to the cruise terminal by taxi, while 20.5% and 17.7% arrived by hotelshuttle and personal car respectively. 

ExhibitIII-3 Mode of Access by Cruise Passengers

                               Source: Lea+Elliott, Inc. 

5. ECONOMIC IMPACTS OF CRUISESERVICE AT PORT EVERGLADES

Theeconomic impact of the 1,007 cruise vessel calls in FY2009 at Port Evergladesis presented in Exhibit III-4 and described in the subsequent sections.

 Exhibit III-4 FY2009 EconomicImpact of Cruise Operations at Port Everglades

6. JOB IMPACTS

Thecruise activity at Port Everglades created 10,204 total jobs for FortLauderdale area residents.  Of these 10,204jobs, 4,331 were direct jobs, 2,941 jobs were supported in the Fort Lauderdale areaas the result of the purchases of the 4,331 direct jobs holders, while another 2,932indirect jobs were supported in local industries that supply services and goodsto the tourism industry catering to the passengers as well as to the chandlersand other firms supplying services and goods to the vessels while in Port.

7. PERSONAL INCOME IMPACT

The 4,331direct job holders received $124.6 million of direct wages and salaries, for anannual salary of $28,770.  As the resultof the purchases made locally with this income, (which supported the 2,941 inducedjobs in the Fort Lauderdale area) an additional $283.6 million of local incomeand consumption expenditures were created in the Fort Lauderdale area.  The 2,932 indirectly employed workers werepaid $93.2 million, for a total wage and salary income impact of $501.4 million,including the consumption impact.

8. BUSINESS REVENUE

            Local businesses supplying food,beverages, and services to the cruise lines and the services supplied at the FortLauderdale-Hollywood International Airport received $1.3 billion of businessrevenue. In addition, in order to support the services and goods supplied tothe cruise lines by these firms, another $129.9 million of local purchases inthe Fort Lauderdale area were made by those firms providing direct services tothe cruise lines.  These local purchasessupported the 2,932 indirect jobs in the local economy.

9. TAX REVENUE

Finally,as the result of cruise activity at Port Everglades during the FY2009 cruiseseason, $37.1 million of state and local tax revenue was collected.  Exhibit III-5 presents the breakdown of stateand local taxes.

 Exhibit III-5 FY2009 Distributionof State and Local Tax Revenue

10. COMPARISON OF CRUISE IMPACTS FY2008 TO FY2009

This section will provide a comparison of the economic impactsgenerated by cruise activity between FY2008 and FY2009.  An identical methodology was used by MartinAssociates to estimate the economic impacts generated by cruise activity forboth the FY2008 and FY2009 studies, and therefore, direct comparisons over theperiod can be made.   Exhibit III-6compares the economic impacts of cruise activity at Port Everglades for FY2008and FY2009

 Exhibit III-6 Comparison ofCruise Impacts FY2008-FY2009

                Totalsmay not add due to rounding

Decreases in both passenger activity and cruise vessel activity contributedto the decline in Port Everglades cruise impacts.  Over the FY2008 to FY2009 period, Port Evergladescruise passengers decreased by 87,950 from 3,227,770 in FY2008 to 3,139,820 inFY2009 and cruise ship calls decreased by 669 from 1,676 to 1,007.  While multi-day passenger activity increasedby 206,484 passengers between FY2008 and FY2009, that was offset by a largerdecline in daily passengers resulting from the loss of 669 cruise vessel callsattributed to the daily/two-day cruises offered by Sea Escape and ImperialMajesty.  The Sea Escape ceased operationprior to FY2009 and the Imperial Majesty called only 41 times in FY2009 ascompared to 169 in FY2008. Celebration Cruise Line's Bahamas Celebrationcommenced operations during the FY2009 period.  Unlike Imperial Majesty, we have included forthe purposes of this analysis, the Celebration Cruise Line's BahamasCelebration, which operates on 2 and 3-day itineraries, in the multi-dayactivity.  The loss of the locally basedstaff and crew operations of daily cruise providers contributed significantlyto the declines in impacts demonstrated in Exhibit III-6.   

Multi-day passenger activity increased by 206,484 passengers,while vessel calls held relatively steady from 602 vessel calls in FY2008versus 612 calls in FY2009 (it is important to note that this category includesoccasional and diving cruises).  Larger capacityvessels that operate at increased economies of scale continue to increase overthe period.  This is reflected by thefact that key lines including Royal Caribbean, Carnival, Holland America and MSCboasted increases in average passengers per call increased over last fiscalyear.

Productivity gains reflected in RIMSII multipliers (similar tothose reported on the cargo side discussed in the previous chapter) also contributedto reductions in job and income impact figures. In addition, the economic recession that worsened over the latter halfof the FY2008 period, has contributed to the decline in impacts as airportoperations and service providers have experienced employment and financial contractions.      

Direct jobs fell by 597, contributing to a decrease of 1,072total (direct, induced and indirect) jobs. Factoring in these job losses wasthe discontinuation of the Sea Escape cruise service during the FY2008 period.  The Sea Escape operated through August 11,2008.  Personal income declined by $41.4million while business services revenue increased by $33.5 million.  Local purchases by firms supplying the cruisepassenger and vessels experienced a decline of $6.6 million and state and localtax revenue fell by $12.9 million, again reflecting the lower per-capita taxburden as documented by the Tax Foundation.

APPENDIX A -

SAMPLE SURVEY QUESTIONNAIRE

ECONOMIC IMPACT STUDY OF PORT EVERGLADES - 2009

Maritime ServiceQuestionnaire

CompanyName:_________________________________________________

Respondent Name_________________________________________________________

Telephone Number:_______________________________________________________

Line ofBusiness:______________________________________________________

All information requested below will be kept confidential.

Please indicate which questions are not applicable to your business.

1.             Howmany NON-ILA persons are employed in your Port Everglades operation?

Full-time ______, Part-time _______ (hrs/wkfor part-time employees ______)

2.             Whatis the average wage or salary (excluding benefits) of these employees?

Full-time ______, Part-time _______,  or Combined _______

3.         Please listhow many (or what percentage) of these employees live in:

Cities of:

_____CoconutCreek         _____Cooper City               _____Coral Springs

_____DaniaBeach             _____Davie                          _____DeerfieldBeach

_____FortLauderdale        _____HallandaleBeach    _____Hillsboro Beach

_____Hollywood                  _____Lauderdale-by-the-Sea   _____Lauderdale Lakes

_____Lauderhill                   _____Lazy Lake                   _____Lighthouse Beach

_____Margate                       _____Miramar                      _____NorthLauderdale

_____OaklandPark             _____Parkland                     _____Pembroke Park

_____PembrokePines       _____Plantation                   _____Pompano Beach

_____SeaRanch Lakes     _____Southwest Ranches _____Sunrise

_____Tamarac                      _____Weston                        _____West Park

_____WiltonManors

Counties of:

_____ City of Fort Lauderdale    _____ Broward County    _____Miami-Dade County

_____ Palm Beach County         _____ Collier County        _____Hendry County

_____ Other Florida                    _____Other US

In lieu of this data, pleaseprovide a blind zip code listing of your employees' places of residence.  We will then allocate your employee countsand zip codes to the specified cities and counties.

4.             Pleaseindicate the percentage of your PEV-related business by type of commodity ortype of vessel.

container_________________       steel_________________                otherbreakbulk_________________      cement__________________       
other bulk_________________     petroleum_________________                 cruise___________________        other__________________

5.             Pleaseprovide estimated average monthly expenditures paid to local vendors

OfficeSupplies:__________                Fuel:_________

Communications:__________            Transportation:_________

Cost of Goods/Parts:__________       Maintenance/Repair:________

Rent/Utilities:__________                     Insurance:_________

Contracted Services:__________       Others (specify):_________

^[1]The induced income impact also includes localconsumption expenditures and should not be divided by induced jobs to estimatethe average salary per induced job. This re-spending throughout the region isestimated using a regional personal earnings multiplier, which reflects thepercentage of purchases by individuals that are made within the Fort Lauderdalearea.  Hence, the average salary would beoverestimated.

     ^[2]Jobs are measured in terms of full-time worker equivalents.  If a worker is employed only 50 percent ofthe time by activity at Port Everglades cargo terminals, then this worker iscounted as .5 jobs.