The Gulf Intracoastal Waterway, which runs from Florida to Texas, is a vital part of the U.S. inland navigation system. Its many ports serve as outlets to several important freight routes along major rivers, like the Mississippi. The economic impact of the Gulf Intracoastal Waterway has evolved over the years and still continues to grow. So what does this mean for inland marine transport? What does the economy now portend for future trends?
The Economic Importance of the Gulf Intracoastal Waterway
The Gulf Intracoastal Waterway has made significant positive contributions to the U.S. economy for the last century and that won’t change anytime soon. With over 50 operating coastal and inland ports , the region imports everything from petroleum to coffee, and exports products like frozen poultry, grain, and oil well supplies. These ports and their activities also provide thousands of jobs to Americans.
The key location of the Gulf Intracoastal Waterway, at the mouth of the Mississippi river, provides a convenient route for exporting much of the Midwest’s agricultural products. According to the USDA, the Mississippi River, Texas Gulf, and East Gulf ports accounted for a combined 55 percent of grains inspected and weighed for export in 2023, and they listed New Orleans as the top port for waterborne agricultural exports (by a long shot) in 2022. Many of these exports reached destinations across the globe, placing the Gulf Intracoastal Waterway as a vital component of the global trade system.
The Gulf Intracoastal Waterway and its ports are also known to be a critical part of the U.S. energy economy. Last year the Southwest Louisiana ports exported nearly two-thirds of the nation’s liquified natural gas . The Texas port of Houston houses the largest petrochemical complex in the nation and second-largest in the world, while the Port of Mobile, Alabama has one of the largest coal terminals in the world. Along with oil and gas exports from growing ports, like Corpus Christi, these ports contribute massively to the booming energy economy of the U.S.
Recreational boating and tourism also contributes to the economy of the Gulf Intracoastal Waterway, offering increased spending along its port towns and providing additional jobs in these areas.
The Gulf Intracoastal Waterway’s Rapidly Growing Ports
According to a recent report by Forbes , the Gulf Intracoastal Waterway is home to the two fastest growing major ports in the entire country. The port of Corpus Christi tops the chart due to its massive increase in oil and gas exports over the last decade, with its annual cargo valuation increasing by 238.33 percent over this time. (However, the focus on exports at the Port of Corpus Christi has caused a decrease of 63.3 percent in its import performance over the same period.)
The Port of Mobile, Alabama comes in as the second fastest growing port, with an annual cargo valuation increase of 121.84 percent over the last decade. This is partially due to increased coal exports and its still growing container terminal activity. Another up-and-coming Gulf Intracoastal port, the Port of Beaumont, ranked tenth on this list with an annual cargo valuation increase of 78.25 percent.
While other ports may not have made it onto the Forbes list, many are showing impressive signs of growth. For example, Port Freeport, one of the more accessible deep water ports in Texas, reports that it is one of the fastest growing ports on the Gulf Coast ranking 6th in chemicals and 15th in foreign waterborne tonnage. Meanwhile, the whole of the Southwest Louisiana Port Network, which consists of five ports in total, has over $100 billion in existing, proposed, and under-construction projects in the LNG sector in the works. This network is already known as being a leader in LNG exports, but if these projects are all successful, they will lead to a combined shipping volume increase of 143 million metric tons.
It comes as no surprise that Mississippi’s ports are thriving as well. The Port of Pascagoula opened up a new export terminal, Enviva Inc. with plans to double its production capacity over the next four or five years, from 6.2 million metric tons per year to approximately 13 million metric tons per year.
Increasing Traffic Along the Gulf Intracoastal Waterway
As ports along the Gulf Intracoastal Waterway expand and imports and exports increase in volume, vessel traffic inevitably increases. In addition to the normal increase of traffic with a growing economy, the Gulf Intracoastal Waterway has experienced an increase of traffic due to cargo movement shifts from the West Coast to the Gulf and East Coast ports . This was largely due to waterway congestion after the pandemic, with shifts peaking in 2022. While some of this traffic has reverted back to the West Coast, imports to major east and Gulf coast ports were still 9.4 percent higher than 2019 levels, as of May 2023.
Infrastructure Projects on the Gulf Intracoastal Waterway
Much of the funding acquired by Gulf Intracoastal Waterway goes into keeping it functional and safe for vessels traveling through it. Maintaining the waterways is an ongoing endeavor and many infrastructure projects revolve around this, while others add to the growing economy of the Gulf Intracoastal Waterway. Below are just a handful of the many projects currently being funded.
Updating Aging Infrastructure
The infrastructure of the Gulf Intracoastal Waterway is aging and, in some cases, has trouble accommodating the increased traffic. The shipping industry and port authorities are all well aware of this problem and there are numerous projects underway to update the Gulf Intracoastal Waterway’s aging infrastructure. For example, the Port of Mobile has plans to deepen and widen its channels to accommodate increased traffic and the Infrastructure Investment and Jobs Act allocated 7 million dollars for construction on the Brazos River Floodgates and the Colorado Locks in Texas.
Energy Projects
Southwest Louisiana’s Cameron Parish Port plans to build Louisiana’s first offshore wind farms , adding a new component to its reputation in the energy business.
Until recently, the Port of Brownsville is the last remaining deepwater port in Texas without a fossil fuel project. However, a Houston-based company called NextDecade has secured 5.9 billion dollars to finance the construction of five large compressor units designed to process 5.4 million metric tons of liquified natural gas per year. This new construction will make the LNG facility among the largest gas export terminals in the world.
Storm and Hurricane Risk Reduction Projects
The Gulf of Mexico is well known for its propensity for hurricanes and tropical storms. This unfortunate reality is a constant problem for the booming businesses and ports along the Gulf Coast. There is a need for advanced storm protection infrastructure and this need has spawned projects like the Morganza to the Gulf of Mexico Project, which aims to reduce the damage risk of flooding to approximately 52,000 structures in an area containing a high concentration of energy infrastructure near the navigation corridors of the Mississippi River and the Gulf Intracoastal Waterway with a series of levees, floodgates, and other water control structures.
Another project, funded by the U.S. Army Corps of Engineers, aims to reduce risk of storm damage to the area along the Bolivar Peninsula and West Bay Gulf Intracoastal Waterway Shoreline, protecting vital ecosystems and economically critical supply chain infrastructure. This project is being referred to as the “Ike Dike,” named for Hurricane Ike, which caused massive damage to the area in 2008.
Modernization on the Gulf Intracoastal Waterway
In recent years, most of the world’s industries have been racing to find technological solutions to their problems—and the marine transport industry is no exception. Many maritime transport companies look toward automation for managing operational tasks, equipment, navigation, and paperwork . Recent inventions include things like sensor systems to prevent breakaways and LIDAR technology to measure loading capacities. Incorporating these kinds of technologies can prevent worker injuries and equipment issues, boost profits, and tighten up the efficiency of marine transportation operations . New technologies are also integral in finding ways to reduce emissions while still being productive.
BargeOps can be a piece of that technology puzzle for barging companies. BargeOps helps to streamline the flow of information, offering an easy-to-use platform that helps companies increase efficiency, improve communication, and optimize profitability. Schedule a call or demo with BargeOps.
