Alabama port’s economic impact swells to $98.3 billion with more growth likely from expansion projects

The Port of Mobile had an economic impact of $98.3 billion in 2022 as the Alabama Port Authority is overseeing more than $1 billion in expansion projects and physically expanding its reach inland with new developments planned in Montgomery, Birmingham and the northern end of the state.

Gov. Kay Ivey announced the latest economic impact figures for the Port of Mobile in Montgomery earlier today. The $98.3 billion statewide impact in 2022 (the most recent year with full data available) was nearly $13 billion more than in 2021.

The report, commissioned by the Alabama Port Authority, found the Port of Mobile’s economic impact reaches into every county in the state. It supports 351,359 jobs with $22.5 billion in income and accounts for $2.4 billion in state and local taxes.

“While our Gulf Coast port might be called ‘The Port of Mobile,’ what the staggering economic impact number of $98 billion means is that it is really ‘The Port of Alabama,’” Ivey said. “Whether it’s our booming automotive industry, exports of natural resources such as coal and limestone and countless other Alabama-made and Alabama-sourced goods, the Port of Mobile touches every corner and every industry in our state. The future is bright for our port, and I look forward to seeing its growth continue to contribute and impact all of Alabama.”

John Driscoll, director and CEO of the Alabama Port Authority, said the port and the state have a symbiotic relationship.

“The port is important to the state, but the state is important to the port,” Driscoll told Alabama News Center earlier this week. “We’re there because of the state, because of the businesses that are there.”

At a presentation to the Economic Development Association of Alabama’s 2024 Winter Conference on Monday, Driscoll outlined more than $1 billion in expansion and improvement projects that will take place over the next several years at the Port of Mobile. They include:

• A $366 million harbor modernization that will deepen and widen the channel to allow for larger container cargo ships.
• More than $200 million in public and private dollars that are being invested in the McDuffie Coal Terminal to modernize operations and double capacity by 2027.
• A $435 million terminal expansion that will allow for more shipping container space, a connector bridge to the port’s intermodal facility and additional container cranes.

The projects use a combination of state, federal and Port Authority dollars in addition to private investment.

“These expansions that we’re doing and the investments that we’re doing of state money are to help the businesses and bring new jobs to the state,” Driscoll said.

Most significant is the harbor modernization project, which Driscoll said is on time and under budget. The project combines $275.5 million from the federal government and $91.5 million from the state. It will create a 50-foot channel by the first quarter of 2025, enabling larger ships to enter the port.

“International ships are getting longer and wider,” Driscoll said. “This is going to allow us to be the deepest seaport in the Gulf of Mexico. We will be able to take the largest ships that ride the waters, whether it’s container ships, coal ships, steel ships. This is a generational impact it’s going to have.”

Driscoll said businesses are already responding.

“We’ve been seeing the benefits of this even before it’s completed,” he said. “Businesses are setting up warehousing and distribution in anticipation that they will have the bigger ships, faster ships, more options for first port of call in-bound or last port of call out-bound.”

The investment in McDuffie Coal Terminal is needed in part due to the rise of metallurgical coal mining in the state.

And the ongoing intermodal project is allowing the Alabama Port Authority to expand its physical reach beyond the Port of Mobile. An expanded intermodal facility at the port is going to allow for an annual capacity of more than 2 million TEUs (or 20-foot equivalent unit cargo containers) by 2028. By comparison, the state handled 523,000 this past year.

Those shipping containers can be transported to and from inland intermodal facilities being developed throughout the state. The first is an $84 million project under development near the Hyundai plant in Montgomery and served by CSX railroad.

“Since we’ve announced that facility, there have been announcements totaling $1.8 billion around that facility,” Driscoll said.

Driscoll said other inland intermodal facilities are planned for Birmingham and the northern part of Alabama.

“Hopefully very soon we will be able to announce some other developments in other portions of the state,” he said.

Driscoll said another $300 million is needed to modernize the general cargo area of the historic state docks area at the port. He said the Port Authority has secured $75 million through a federal grant and is pursuing more.

Today’s announcement drives home the Port of Mobile’s important role to the rest of the world via trade.

“The port is a true powerhouse for the economy of our state,” Alabama Commerce Secretary Ellen McNair said. “Business leaders throughout the country and throughout the world continue to make significant expansions and investments because of the connectivity that the port provides.”

So agreed Helena Duncan, president and CEO of the Business Council of Alabama. “They invest in our state because they recognize the unparalleled connectivity that this port provides. The Port of Mobile isn’t just the port for Mobile; it’s Alabama’s lifeline to the global economy.”

Ivey acknowledged the role the Alabama Legislature has played in providing resources to help improve the Port of Mobile, including funding in the Rebuild Alabama Act.

“The Port of Mobile is an economic powerhouse for the state of Alabama, and it is growing bigger and stronger every single day,” said Sen. Greg Reed, president pro tem of the Alabama Senate. “With coal being one of the largest exports of the port, and my district being the state’s largest producer of coal – the success of the coal industry in Alabama and the Port of Mobile are inextricably linked. I’m a proud supporter of the port and its mission, and I’m pleased but not surprised to see the incredible economic impact it has on our great state.”

“Geographically, my home district couldn’t be much farther from the Port of Mobile, but the port’s impact on my district – and virtually all of my members’ districts in the Alabama House – is very present,” said Alabama State House Speaker Nathaniel Ledbetter, whose district is in DeKalb County. “It’s clear that our commitment to investing in the port is netting remarkable returns for our state, and it’s vital we continue to support this economic engine for Alabama’s continued success.”

The study was conducted by Martin Associates, an internationally recognized economic and transportation consulting firm that specializes in the analysis of the transportation and logistics industry.

The analysis is separate from and independent of a recent analysis in Forbes, which ranked the Port of Mobile the second fastest growing port of entry into the U.S.