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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Ryan Alexander

Professor Dixon

Eh 102

April 16, 2018

Port of Mobile Economic Impact

Mobile county economy has been thriving and flourishing throughout the years. The county of Mobile is influenced by many different businesses such as aviation, chemical, healthcare, IT, high-tech, logistics, distribution, maritime, gas and Steel. These aspects play a major role in the development of the city, but the port of mobile has the most impact. The Port of Mobile has always played a key role in the economic health of the city since its beginning of this community. Not only have the people of Mobile see their community striving but the whole nation does as well. For example, in 2015 Forbes listed Mobile as 1st among Mid-sized Cities for New Manufacturing Growth. Also in 2015 CNN-Money ranked mobile 5th nationwide for a “living wage”. For this research topic I will be discussing the geography of the port, the history of the port of Mobile, where it ranks national compared to other ports,  what companies use the port of Mobile, and lastly the future of the port.

During the discovery of the “New World”, early explorers wanted to reap the benefits of the port by being able to move deep into the inland area as well as having a direct water route. In 1702, Mobile was settled by Le Moyne brothers, during these times the bay of Mobile had a relatively shallow channel that prevented large cargo vessels from docking in Mobile (Kirkland,2012). Large cargo and passenger had to unload towards Dauphin Island then after transported to my mobile. During these time the port was shared between France, Great Britain, and Spain. It was not until 1813 when the United States decided to annexation Mobile. During these two times the United States used the port for transporting cotton and other crops but the port was still very shallow I needed major renovation. It was until 1824 when senator Rufus B. King provided federal funds to deepen the ship channel by seven feet. The improvements of the harbor helped shaped mobile to become one of the best ports in the south during the early 1850s. During the Civil war the harbor was blockade by union soldiers causing  a limitation in imports and exports in the city. the Senator was late forced to surrender the harbor due to uncontrollable advancement by the US Navy. After the civil war cotton sales had drop from 800,000 bales to less than 300,000. The drop in sales caused many of the businessmen to finding new export opportunities. During the 1870-1900 the port of Mobile had faced debt as well as competition heat from the railroad systems. The port also played a major role In Both world wars. in August 1917 The first shipbuilding contracts were in Mobile. In 1919 the Waterman Steamship Corporation, which became one of the largest shipping companies in the world. Its creation helped spur renewed interest in building up Mobile's port facilities (Kirkland,2012). During world war 2 increased its number of workers more than tenfold, and the nearby Gulf Shipbuilding Corporation installed new, larger dry-docks. During the war, the city's waterfront workforce increased to more than 89,000.During the war, more than 200 ships were built in Mobile shipyards. Due to the success the port had during the world wars, the Shipping and shipbuilding remain of vital importance to Mobile's port, which continues to attract new investments to the city as it expands.

The Port of Mobile's deep-water provides jobs, a growing economy and a good quality of life for the entire region. The port is responsible for $21.7 billion and 147,000 jobs yearly. One of the majors import/export, Petroleum, has an annual economic impact in excess of $680 million, and also provides tax revenue for local governments, and support in excess of 5,000 jobs. According to (“ KeepMobileGrowing”), “Three of Mobile's top 12 manufacturing employers are from the petrochemical sector, and the rest, along with Mobile's 12 largest non-manufacturing employers, all rely on the petroleum industry for logistics and transportation; manufacturing of computer components, medical supplies and pharmaceuticals; and for research and development grants and endowments”.  Also Manufacturing and related industry generated over 6,100 new jobs in Mobile with an average annual salary of $52,552 between 2008-2012. The average hourly wage for a manufacturing employee is $21.59, almost twice that for the hospitality industry at $10.82 also according to (“KeepMobileGrowing”)

Mobile has racked up a series of big wins in economic development in part because of assets of the Port of Mobile. The port has helped it land multiple aerospace projects. The most notably is the first U.S. Airbus assembly plant. The port of Mobile made an announcement that $135 million will be funded for a Walmart import distribution facility. According to Troy Wayman, vice president of Economic Development with the Mobile Area Chamber of Commerce, “Team Mobile is made up of the city and the county, the chamber, Alabama Power Company, Mobile Gas, University of South Alabama – any number of entities that are needed to make a project happen. He also include a the  mayor, and other elected officials. “We can bring all of those people to the table at the right time to get any deal done,” Wayman said. The city of Mobile has united to shows major cooperation it's true value. The port of Mobile has taken many loses and wins, but these loses and wins have shaped the current status of the Port of Mobile. For example, Mobile was awarded $5 billion for the ThyssenKrupp steel mill project, which is now AM/NS Calvert. This was the largest U.S. economic development project in history. The city of Mobile unification between politicians and businessmen help with upcoming projects in the port. The Walmart project, it was a combination of teamwork, expansions at the port's APM Terminals and persistence. This project will be responsibility for having 550 workers in skill sets. This project will also be responsible for more ship activity into the port and is making Mobile more attractive to other distribution companies.  Lyons stated “When you land a company like Walmart that has a reputation of being a leader in the industry as far as their logistics and they've got a reputation of knowing what they're doing, other people in the industry are going to say, ‘Hey, if Walmart thinks Mobile or Alabama is a good idea, maybe we should be looking at Alabama. “Another benefit from Walmart is going to be the availability of shipping containers needed for exports. Walmart will be bringing in between 25,000 and 50,000 shipping containers per year – containers that, when empty, can be filled with Alabama goods bound for world markets'' (Tomberlin). The port wants to bring the boxes in with cargo for Walmart, then load them back out with paper products and pulp products and lumber and steel and other resources. This project will also be 2.5 million square feet and supply 800 locations along the Gulf Coast. (Tomberlin)

Due to the success of the port of Mobile, organizations have been set up in order to network trades domestically and internationally. The Export Alabama Alliance is a seamless network of international trade agencies with the fundamental objective of helping Alabama companies grow their business internationally (“MadeInAlabama”). This alliance was set up for  local, state and federal organizations to work together to develop and coordinate programs that facilitate the export of Alabama's goods and services overseas. This alliance make sure they help  assists companies in all  different areas of global commerce. This alliance helps with many different problems from how to assets a firm's export readiness and the development of a marketing plan, to export financing, credit insurance, documentation, delivery and payment. The Alliance also holds  workshops and seminars, as well as individual counseling sessions, are coordinated by the Alliance to help educate and prepare Alabama companies to compete in the global marketplace (“MadeInAlabama”). They also meet constantly meet throughout the year to ensure that the activities outlined in this blueprint are on pace of being completed.

According to Joseph Bonney, Mobile has also become one of the largest US steel-handling ports. For the several years the port has been open the port receives imported slabs. The port also converts them into coils and many different products, the port also exports most of the finished product. Mexico has been the primary receiver of these finish products . According to Alabama State Port Authority, the port of Mobile approximately handles about 5 million tons of steel every year. For example , In 2015 Alabama Steel Terminals, a joint venture of Tri-State Maritime and the Richardson Group, opened a new terminal for handling steel coils in the port's inner harbor. The terminal has rail, truck, and barge access. But mobile might have some problems in the future with the steel industry as well as other US ports. There are some worries that tariffs that have been put into place could invite retaliation that harms US exports. The immediate direct impact of President Donald Trump's steel and aluminum tariffs on his port's customers is expected to be muted. Companies that use steel such as automakers have requirements that make it impossible to quickly change suppliers, companies are expected to adjust prices to tariffs.

Mobile is also plays a major role in the Global Marketplace. According to  (“Latin-American”), Alabama exports reached a record-high level of $20.6 billion in 2016, powered by shipments of Alabama-made automobiles to over 85 countries. Also products such as air and spacecraft, chemicals, and pulp and paper have also played a major role in the revenue of exports. The state was ranked 23rd across the United States for its dollar value of exports in 2016. The steady improvement of the Port of Mobile allowed them to advance two places higher than the previous year. The companies of Alabama also  shipped products to 189 countries in 2016, according to (“MadeInAlabama”) the top five destination markets including Canada China, Germany, Mexico, and the United Kingdom. Canada and Mexico, our North American Free Trade Agreement partners, are also accounted for some $6.73 billion. That is 33 percent of Alabama's total exports. China is in second -place spot, among the Port of Mobiles top exported destinations. The state of Alabama largest product export is still the transportation equipment, which has been on a constanly increase every year. This constant of transportation equipment makes up a growth of 14.45 percent. Alabama's  top exports included chemicals, primary metals, paper and machinery. With more than 70 percent of the world's purchasing power located outside the U.S., Alabama companies are looking at markets beyond our borders, where demand is growing. International trade enhances the quality of life for all Alabamians and contributes to the state's prosperity. Creating jobs through exports for the state's citizens is key in accelerating Alabama globally (“Mobile Chamber”).

Alabama Senators Richard Shelby and Doug Jones have come out with some important statements on the Alabama State Port Authority. The announcement is about the receiving of a $12,700,000 federal grant to help make improvements at the Port of Mobile. According to The United State Department of Transpiration, the funding will help the Port take abandoned bulk into a roll-on and roll-off mobile vehicle processing facility. According to the United States Department of Transportation,  It will be capable of handling automobiles, military vehicles, trucks, other rolling stock, and high or heavy cargos. This grant that the Port will be reviving will be major for the economy of the state as well as the city of Mobile. Senator Doug Jones, states that this was a major victory for the state. He also stated that “The fact that the Port of Mobile can compete for and win such a significant grant reaffirms its standing as a world-class facility.” The contast advancing  of the Port of Mobile is critical for the economic success. Since the Port is vastly growing, taking another step in the booming automotive industry will encourage more growth for the economy. According to (“Transportation”) , the Transportation Investment Generating Economic Recovery, or TIGER Discretionary Grant program, provides a unique opportunity for the DOT to invest in road, rail, transit and port projects that promise to achieve national objectives.

The Port of Mobile has grown in recent years to America's 12th largest, importing and exporting port. The Port of Mobile is known for the greatest diversity of commodities ever, having aluminum, chemicals, coal, iron, lumber, oil & gas, steel, and wood pulp. Now the Port of Mobile is expanding by adding automobiles and aeronautics to the mix. The Mobile seaport is known throughout the country as well as the world as an Energy Transfer Port. This leads Mobile's to expanding role in the energy trade and further supporting our nation's growing energy independence. Looking throughout the years the port of mobile has been through constant change and development. The port of mobile has been a  major influence since the beginning of this Country and still has major influences.

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