A Methodology to Analyze the Global Impact Due to the Malfunction of International Ports: Spatial Computable General Equilibrium Approach

An Assessment of the Impacts on the International Container Transport and the World Economy Resulting from the 2014/15 U.S. West Coast Port Disruption

“…Table 7 shows a comparison of the results of estimations of economic loss calculated in previous studies. The value of the overall loss incurred as a result of the U.S. West coast disruption, as calculated in this study, was somewhere between those incurred as a result of the one-year closure of the Nagoya port (Funase et al 2011) and the one-year closure of the Malacca/Singapore Strait (IRGC 2011).…”

“…(Park 2008) estimated that the same attack leading to a one-month shutdown would result in a loss to the global economy of US$35.9 billion. (Funase et al 2011) estimated that a closure period of one year for the Nagoya port would cost the Japanese economy JPY252.9 billion (approximately US$2.2 billion, based on the exchange rate on August 28, 2017), and it would cost the global economy JPY794.3 billion (approximately US$7.0 billion). (Southworth et al 2014) reviewed various cases of port disruptions and conducted a specific case study of the Superstorm Sandy and Columbia River Closure.…”

“…However, these data cannot be available in advance. (Funase et al 2011) and (Martin Associates 2014) deduced the alternative routes during port blockade. Theoretically, the estimation by a route choice model which is improved to apply it at the time of disasters is necessary.…”

“…The economic impact of stagnation of international container traffic consists of the direct losses that are imposed mainly on shippers, and the indirect losses that reflect the economic ripple effect such as decrease in the demand of intermediate goods associated with the direct losses. (Funase et al 2011) estimated the overall losses by adding the transport costs of alternative routes directly to the CGE model. In this study, the direct losses are estimated in section 5 and overall losses including indirect losses are discussed in section 6.…”

“…The rate of cargo value loss due to the stoppage of shipping was assumed as 0.5 in section 5.1, was reflected to tariff rates in calculating the overall losses and was considered to need to improve in future studies. For this estimation method of overall losses, it should be pointed out that the additional tariff rate leads to an increase in government revenue (Funase et al 2011). However, the proportion of tariff revenue in relation to government revenue was only 1.8% in the United States and Japan (Ministry of Finance 2017).…”