Putting the Ports of Cincinnati and Northern Kentucky on the Business Map

By Greg Paeth

A tug pushes freight barges under the Roebling Bridge linking Covington and Cincinnati. The U.S. Army Corps of Engineers recently rededicated 226 miles  of the Ohio River as the Ports of Cincinnati and Northern Kentucky, which becomes the second largest inland port in the United States by freight tonnage.
A tug pushes freight barges under the Roebling Bridge linking Covington and Cincinnati. The U.S. Army Corps of Engineers recently rededicated 226 miles of the Ohio River as the Ports of Cincinnati and Northern Kentucky, which becomes the second largest inland port in the U.S. by freight tonnage.

With a figurative flick of its pen earlier this year, the U.S. Army Corps of Engineers expanded the boundaries for the  ports of Cincinnati and Northern Kentucky by nearly nine times and created what is now the second largest inland port in the country.

What is now officially the “Ports of Cincinnati and Northern Kentucky” skyrocketed from a rather ho-hum ranking of No. 51 in the country to No. 2 in the inland rankings and No. 15 on the list of all U.S. ports.

The comprehensive list is headed by three major players: South Louisiana, Houston and New York-New Jersey, all of which handle ocean-going vessels that don’t traverse the Ohio River.

Rankings reflect the tonnage of cargo that was handled by the ports in 2012, the most recent year for which figures are available, and reported to the U.S. Army Corps of Engineers, said Nathan Moulton, the planner for the port expansion project for the Corps office in Louisville. If the new boundaries had been in place in 2012, the Corps estimates that Cincinnati/Northern Kentucky would have handled about 48 million tons of cargo that year, just behind Huntington, W.Va., the country’s largest inland port.

Boundaries for the port of Huntington, which expanded by the Corps designation in 2000, and Cincinnati/Northern Kentucky now butt up against one another on the Ohio.

The newly drawn Cincinnati/Northern Kentucky ports are comprised of 129 active docks and terminals with 68 on the Ohio side of the river, 54 on the Kentucky shore and seven on the Licking River, according to Moulton. Importantly, the new name and lines will appear on the official Corps maps all shippers use.

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The intent is to raise the region’s profile and its business tides.

Even before the “expansion,” which is an administrative designation by the Corps, it was clear that port operations had a substantial impact on the economies of Cincinnati and Northern Kentucky as both a job and revenue creator. Public officials and business leaders say the new port configuration will build on solid successes from the past.

Thousands of jobs, billions in revenue

C&B Marine LLC of Covington is a full-service marine company serving utility companies and others in the aggregate movement business across the Midwest and southern United States.
C&B Marine LLC of Covington is a full-service marine company serving utility companies and others in the aggregate movement business across the Midwest and southern United States.

A study commissioned by the Port of Greater Cincinnati Development Authority calculated that port operations generated $532.4 million in revenue for businesses in the Cincinnati region in 2011, when the port included just 26 miles of shoreline and terminal operators handled 11.7 million tons of cargo. Newly drawn boundaries stretch for 226.5 miles, running across the northern tip of 10 Kentucky counties from Trimble on the west to Lewis on the east.

Just over 6,000 jobs in the region were linked directly to the Cincinnati/Northern Kentucky ports, according to the study, which was completed in May 2013 by Martin Associates of Lancaster, Pa., and based on 2011 data, the most current then available.

Of those jobs, some 2,200 were linked directly to port activity. That number included about 1,100 people who work at the docks and terminals and nearly 900 truckers and 40 railroad employees who moved cargo to and from the ports.

The study said another 2,400 “induced jobs” were based on expenditures by those 2,200 workers, and yet another 1,400 were classified as “indirect jobs” that were supported by barge and cargo handling firms.

Extrapolating even further, Martin Associates said more than 13,200 jobs were “related to” the inbound and outbound cargoes – reflecting its subsequent processing and distribution, and its use in manufacturing, farming and construction as well as wholesale and retail transactions. Those 13,200 jobs generated another $3.3 billion in business revenues, the consulting firm said.

No similar impact study has been done since the port boundaries changed.

Now that all the port-expansion paperwork has been completed, all that remains to be seen – and “what remains to be seen” is huge – is whether these new boundaries will actually make a substantive difference to the scores of terminal and barge operators who handle cargoes along 219.5 miles of the Ohio plus a 7-mile stretch of the Licking River south of its confluence with the Ohio.

Another unknown is whether the expanded boundaries will attract other businesses to the region as they become more aware of the river transport assets in a port that has attained a lofty ranking.

Equally uncertain is what impact, if any, the widening of the Panama Canal, scheduled for completion next year, might have on eastern U.S. river commerce. There is a general consensus that more ocean-going vessel traffic from China and elsewhere in east Asia will use the canal to reach ports in the Gulf of Mexico, where cargo will be transferred to barges that will head up the Mississippi and, eventually, to the Ohio.

Optimism and opportunity, but more business?

The one certainty is that the new status for the ports has created plenty of optimism.

U.S. Rep. Thomas Massie, who lives in Lewis County and represents Kentucky’s Fourth Congressional District, called the re-designation “a wonderful example” of cooperation between local, state and federal governments.

“I’m sure both sides of the Ohio River will benefit from the continued development of this resource as tonnage grows along the Ohio and Licking Rivers,” said Massie, who serves on the Water Resources Subcommittee of the House Transportation and Infrastructure Committee.

“Ohio and Kentucky play a key role in global logistics and international trade,” said Laura Brunner, president and CEO of the Port of Greater Cincinnati Development Authority. “We can appreciate a future that builds on regional partnership and shared purpose to advance economic opportunity. This new port provides us a common language to engage in that work.”

In proclamations presented at the event, Kentucky Gov. Steve Beshear and Ohio Gov. John Kasich have both praised the cooperative effort in expanding the ports.

“This re-designation will bolster trade and commerce along the Ohio River and create more economic opportunities to grow jobs throughout Greater Cincinnati and Northern Kentucky,” Kasich said.

Jack Moreland, president of Southbank Partners, said he hopes the current enthusiasm translates into substantive progress.

Both the Cincinnati and Northern Kentucky port agencies have, at this point, committed only to an effort to publicize the ports’ new status.

“If it’s just a marketing campaign and a feel-good moment, it won’t amount to a whole lot,” said Moreland, whose agency focuses on economic development projects in the river cities that hug the Ohio shore in Kenton and Campbell counties. “It’s very clear that the expansion of the Panama Canal will put a lot more traffic on the Mississippi and the Ohio. To expand the port authorities is the first step toward a greater goal.”

Moreland is urging “key stake holders” and area political leaders to “seize the opportunity now and be as aggressive as they can be” in attracting more business to the ports and the region.

Autonomous terminals plot cooperative course

The various ports are used to operating independently. They all remain autonomous, and existing port authorities’ structures will not change.

Jack Weiss, president of Cincinnati Bulk Terminals and one of 10 members of the Northern Kentucky port board, said it was too early to make any predictions about the ports’ new status and whether Panama Canal traffic would impact the Cincinnati region.

“But I don’t see any downside to it,” Weiss said. “If someone from another country is looking at the list (of ports) and they see that we’re high up on the list, we may get more attention than we did before.”

Gail Paul, director of communications for the Cincinnati port, said her agency has pledged to formalize a mutual marketing agreement with a major port in New Orleans. But at this point, Paul said, the Cincinnati port has made no other commitments to work on river commerce issues.

Paul said much of the port’s work involves economic development, including brownfield remediation and “purchasing real estate in strategic areas that isn’t going to receive any investment without public intervention.”

The agency’s emphasis on real estate became even clearer in late May when the port announced that it had entered into an agreement with Homesteading & Urban Redevelopment Corp., a private nonprofit focused on community revitalization and in particular, the renovation of homes in low- to moderate income areas.

The Port Authority’s successful management of Hamilton County (Ohio) Land Reutilization Corp. (commonly known as the “Landbank”) convinced HURC leadership to enter the agreement, the port authority said in a news release.

The port has a budget of about $2.8 million, which includes $750,000 in contributions each year from the City of Cincinnati and Hamilton County, Paul said.

Like Moreland, Dan Tobergte, president and CEO of the Northern Kentucky Tri-County Economic Development Corp. (Tri-ED) and the secretary-treasurer of the Northern Kentucky Port Authority, said the Panama Canal expansion may produce more river traffic in the region. And like the Cincinnati port, the Northern Kentucky port board has agreed to assist in a marketing effort and work with the Central Ohio River Business Association (CORBA), the organization that played the lead role in pushing for port expansion.

Tobergte passed on a “talking points” document that provides the Northern Kentucky Port Authority perspective on the expansion, which “creates a significant advantage for economic development professionals to promote and market our existing terminals, respective communities and region as destinations for growth.”

Tri-ED provides administrative services to the port authority, which has no staff, no office and no immediate plans to make an additional investment in the expanded port, Tobergte said.

The port’s budget for this year is about $12,000 and it has a bank balance of about $350,000, he said.

Central information clearinghouse needed

Eric Thomas, one of the driving forces behind the port expansion, said the effort to redefine the ports signals a major change in the relationship between businesses, agencies and political subdivisions on both shores of the river.

“It’s already made a profound difference by bringing together the business community in a way that it hadn’t been before to work on common issues,” said Thomas, general manager of Benchmark River and Rail Terminals in Cincinnati. “It brought the region together – two states, 15 counties, the cities, four congressional districts – a broad group of people all rallied behind the cause to promote the region and bring an opportunity to use as a region.”

One outgrowth of the new designation is establishing the Central Ohio River Business Association (CORBA), an organization for which Thomas is a co-founder, to act as a kind of clearinghouse for information about the newly expanded ports. In the past, he said, there was no central source for information about river commerce in and around Cincinnati.

“It gives us bragging rights as a region,” Thomas said of the new designation, and drives home the message that “we are a port community” to companies searching for a place to build a plant.

He’s convinced the new designation will provide an important stimulus for business development in Cincinnati and Northern Kentucky by emphasizing the region as a major role in moving huge quantities of materials and products throughout the nation’s heartland.

The study commissioned by the Cincinnati port said cargoes that produced the biggest revenues in 2011 were chemicals and fertilizers ($221.6 million), petroleum products ($98.2 million), aggregates ($54 million), grain ($28 million) and coal ($23.6 million).

Thomas also is one of the key people behind the Tri-State Regional Maritime Council, which hopes to include representation from and become a voice of the 19 counties of Ohio, Kentucky and Indiana inside the enlarged port boundaries. Thomas wants the council “to jointly promote the regional port as has never been done before.”

‘Reliability is essential to success’

He mentions the Port of Pittsburgh as a possible model for further development in the Ports of Cincinnati and Northern Kentucky.

Steve Martinko, executive director of the Port of Pittsburgh Commission, pointed out that there are major differences between the two ports, including the fact that Pittsburgh is either a destination or an origination point for Ohio River commerce because the river is created at the confluence of the Allegheny and Monongahela rivers. Pittsburgh has more locks and dams than any port in the country, he said, which makes infrastructure a critical concern.

“Reliability is essential to the success of the port to the terminal operators, the shippers and the region as a whole,” Martinko said.

Port of Pittsburgh operates with an annual budget of about $1 million in public funds, he said. It estimates about 45,000 jobs “are dependent on waterway transport” and that the direct economic impact is about $800 million a year.

Although it’s too early to tell if the Cincinnati/Northern Kentucky ports intend to invest the way Pittsburgh already has, professionals have urged the Cincinnati port to play a larger role in river transportation.

A freight plan from the Ohio-Kentucky-Indiana Regional Council of Governments in 2011 urged officials to “Activate the Port in the Port of Greater Cincinnati Development Authority, (and allocate) $300,000 annually for new barge-freight-related administrative staff and responsibilities. The port … can enhance the profile of regional river assets as a lever for economic development.”

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