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Calcasieu Ship Channel: SWLA’s Economic Driver

Posted on: October 22nd, 2015

Red ship City DocksLake Charles, La.­—A study released by the Lake Charles Harbor and Terminal District dramatically underscores the far-reaching economic impact of a single physical feature—the Calcasieu Ship Channel—on the Lake Charles region, the state of Louisiana and the nation.

The study, titled “Economic and Fiscal Impacts of the Calcasieu Ship Channel,” concludes that the health of almost half of the Lake Charles metro economy depends on the health of the channel. For instance, nearly one third of jobs in the Lake Charles metro area are tied to the channel and the port authority, and maritime commerce accounts for 46 percent of the Lake Charles economy’s total $14.8 billion of business activity.

“The document demonstrates to stakeholders just how vital this waterway is to Southwest Louisiana. The fact that we are a ‘port city’ has brought tremendous economic benefits to our area,” said Bill Rase, executive director of the Lake Charles Harbor and Terminal District. “And the study gives us a preview of how our economy will benefit from the $80+ billion in capital investments announced for the area—80 percent of which is being made because of the Calcasieu Ship Channel.”

The Calcasieu Ship Channel was engineered in the 1920s, ’30s and ’40s to straighten, widen and deepen the Calcasieu River from Lake Charles to the Gulf of Mexico, making Lake Charles a deepwater port, although it is 34 miles inland. The ship channel became a highway for the delivery of goods, both inbound and outbound, and dozens of companies built facilities on the channel to produce, process, send or receive those goods. The Lake Charles Harbor & Terminal District has grown to become the 11th-busiest port in the United States by tonnage, according to U.S. Army Corps of Engineers figures for 2013, the latest year available.

All that channel activity, the report concludes, is a major driving factor in the economy of the region, the state and the nation.

Some key findings of the study (figures are for 2014):

  • The ship channel is responsible for nearly 36,000 direct, indirect and induced jobs in the area, or 31 percent of the total employment in the Lake Charles metro area, and 50 percent of local tax revenue is generated from industrial production or maritime services tied directly to the ship channel.
  • Over 80 percent of the manufacturing employment in Lake Charles is strongly tied to waterway-dependent industries.
  • Some 46 percent of the GDP in Lake Charles directly depends on the ship channel for either raw material receipt or for the shipment of finished product.
  • An additional $1 billion of earnings and $1.3 billion of personal income is generated outside of the Lake Charles economy from the ship channel’s production and services.
  • Industries relying on the ship channel produce nearly 13,000 additional jobs outside of the local economy. The total number of jobs in Louisiana generated by the ship channel is nearly 50,000 jobs or almost 2 percent of the state’s workforce.
  • The ship channel and associated industrial production contributed $916 million in federal taxes in 2014; that figure is expected to rise to $1.3 billion in 2023.

These impacts will grow tremendously in the next several years as the regional economic boom continues to materialize. If the proposed 19 industrial projects tied to the ship channel are completed and operational in 2023, the study states that the region will see a 25 percent increase in channel-dependent jobs, a 78 percent expansion in channel-dependent GDP and more than double the local tax revenues generated from channel–dependent companies.

“We’re happy to see that so many people—from plant operators to retail store clerks to construction workers—have jobs because of the ship channel and its maritime activity,” said Barbara McManus, president of the Port of Lake Charles Board of Commissioners. “This is why the Port Authority works so hard to protect and maintain the channel—it truly carries the lifeblood of our area.”

This economic impact study was conducted by CSRS and Taimerica Management Co. The findings will provide the data the Port Authority needs to continue lobbying efforts at the local, regional, state and federal levels to secure adequate funding for channel operations and maintenance,” Rase said.

Download the full Economic Impact Study