Ports & Waterways
What is the Economic Impact of Minnesota’s Ports and Waterways?

Condensed from Mn2020 Moving Minnesota to Market.pdf

The state Department of Transportation estimates the economic impact of commercial waterways in Minnesota at more than $1 billion a year, or 0.4 percent of the gross state product.

When it comes to fuel efficiency, marine transportation clearly outperforms other freight modes. One gallon of diesel fuel moves a ton of freight 576 miles by river barge, 436 miles by railroad and only 155 miles by truck, according to the Texas Transportation Institute. The Army Corps of Engineers estimates that Great Lakes carriers do even better than barges, wringing 607 ton-miles from every gallon of diesel.

Minnesota’s ports also greatly reduce congestion and wear and tear on highway and rail infrastructure. An average year’s tonnage through Minnesota’s ports takes roughly 2.9 million semitrailers off the roads or about 665,000 bulk railroad cars off freight tracks. In a time when job creation and retention is critical, ports also employ thousands in the state.

Ports and Waterways Funding
  • The State of Minnesota has been providing financial support for port development activity through the Port Development Assistance Act (Minn. Stat. § 457A.)
  • Some near-term port projects may be addressed through the Federal TIGER initiative.
  • Federal maintenance of commercial waterways are supported by a marine fuel tax.

Critical Initiatives

Port development funds have been used to improve or construct warehouse facilities, purchase cargo handling equipment, rehabilitate road and rail access to port facilities, dredge riverways to provide access to ports, repair dock walls and establish new barge fleeting areas and cargo bulkheads.

All of these projects have contributed to more efficient operation of our ports and have improved and expanded the use of our waterways to move Minnesota commodities cost effectively to market.


Much of Minnesota’s port infrastructure is aging. There is a need for additional resources to improve facilities that have been extended beyond their original useful life.

Each year, Minnesota’s ports prepare two lists of port infrastructure needs. One list consists of projects that are immediate needs and that are ready to go to construction. This list has typically exceeded $10 million in aggregate. Indeed, in the latest “near-term projects list”, the funding amount expressed in terms of needed capital exceeds $30 million.

The second project list is for longer term projects. This longer term vision from the ports’ perspective involves the need for capital improvements in excess of $50 million.

What can people expect if an adequate level of funding is not maintained?

If we do not maintain our port infrastructure, we will see greater pressure on other modes of transportation and we will miss opportunities for growth in emerging markets.

Ports and Waterways Recent Entries


An outstanding example of a port infrastructure project that contributed to an array of community-wide benefits is the multi-modal Pelzer Street overpass project in Winona, Minnesota. The project for the Port itself involved dredging to expand barge fleeting and staging areas. Winona had only one staging area in the harbor that was suitable for building or breaking up barges for towing operations. There was also limited fleeting space for barges waiting to take on or discharge cargo, or simply to be assembled to move up or down River. The dredging project expanded both of these capabilities and also expanded the entrance to the fleeting area to provide safer movement of barge traffic in the harbor.

The other community benefits from the project resulted from the use of the dredge material itself. Once dried, the material was put to an immediate beneficial use in constructing a major highway overpass to avoid a rail crossing. The overpass ensures that emergency vehicles have access to parts of town that would otherwise be inaccessible in the event of a train derailment. The overpass also provides improved access to a City industrial park, the City airport and the commercial harbor, and it provides another entrance to the City’s downtown business district.

This single project expanded the capabilities of the harbor to accommodate barge traffic, avoided a key rail crossing, improved highway access to several community assets and enhanced traffic flow throughout the community.

Ports and Waterways Overview

Minnesota’s location at the center of North America would present a significant competitive disadvantage for many sectors of our state’s economy but for our ability to move cargo cost-effectively via the Great Lakes and Upper Mississippi Waterway Systems. Throughout Minnesota’s history, development and commerce have been focused around our waterway systems.

Our ports provide a competitive advantage which attracts private investment and creates jobs in multiple economic sectors. Mining and agriculture are two areas that have flourished in large part because of the ability to move Minnesota products via our waterway systems. First iron ore, then taconite and, looking ahead, slab steel will move down the Great Lakes from Minnesota mines and processing facilities.

Minnesota’s public ports provide the outlet to market for a variety of Minnesota products. Minnesota corn, soybeans and wheat reach their ultimate markets through Duluth and our river ports of St. Paul, Winona and Red Wing. Moving these agricultural products to market by ocean going ships or river barges is vitally important to our agricultural sector which makes up a significant portion of Minnesota’s economic activity.

Our ports also provide for transshipment of a variety of incoming and outgoing materials. Costs would most certainly rise in the construction sector but for the fact that a significant volume of sand, gravel and other materials arrive in the state through our ports. Road salt to address winter icing is another bulk commodity which arrives at our ports for distribution throughout the State.