The State‐by‐State Economic Impacts of the 2002 Shutdown of the Los Angeles–Long Beach Ports

Abstract

In previous research, the economic impacts of temporary shutdowns of the Los Angeles–Long Beach harbors were simulated after a hypothetical terrorist attack, applying the National Interstate Economic Model to estimate state‐by‐state as well as interindustry impacts. However, the unpredictable characteristic of terrorist attacks might not be applicable to the case of a ports shutdown such as the one caused by the lockout of September–October 2002. Market participants can be expected to have contingency plans based on anticipations of a strike or shutdown. Can we identify any of these in terms of the use of alternate ports, in terms of alternate modes or even alternate time periods? The purpose of this study is to examine these questions. The approach is elaborated by testing for the possible effects of trade diversion to other West Coast ports, transportation modes, and intertemporal substitutions. We use data from WISERTrade describing commodity‐specific trade for the major West Coast ports before, during, and after the 11‐day shutdown of the fall of 2002. Shippers’ ability to divert trade is a key ingredient in the economy's ability to withstand attacks and disruptions. The work estimates the impacts on 47 industrial sectors across 50 states (and the District of Columbia).

Modeling the effects of port disasters

“…A few scholars do provide initial insight into the magnitude of a major port shutdown. Park et al (2008) provide a good review of port disaster scenarios and reveal significant variability across estimates of subsequent economic impacts. For instance, Rosoff and von Winterfeldt (2007) estimate that a terrorist attack on Los Angeles and Long Beach, CA, the largest North American ports, would cause a 120-365-day port shutdown and cost roughly $30-$100 billion in port, evacuation, property value and decontamination costs.…”

Estimating the Economic Consequences of a Port Shutdown: The Special Role of Resilience

“…The results indicated a total US loss of output of $8.5 billion stemming from the export disruption and $26 billion from the import disruption. Park et al (2008) also estimated the economic impacts of the 11-day labor strike shutdown at the LA/LB ports in 2002, though the analysis covered the ensuing 4-month adjustment period as well. They supplemented NIEMO with a multi-level linear regression model to estimate direct (final demand) losses and also included variables to reflect port and other transportation mode substitutions.…”

“…Several researchers have estimated the direct and indirect impacts of such disruptions and found them to be quite large (Chang, 2000;CBO, 2006;Park et al, 2007Park et al, , 2008Park, 2008;Jung et al, 2009;Rose et al, 2009a). However, none of these studies has adequately factored in all of the possible forms of resilience that could mute these losses by using remaining resources more efficiently or by recovering more rapidly (see, e.g.…”

Disturbances to Urban Mobility and Comprehensive Estimation of Economic Losses

“…1). Within the subset of papers that do not accommodate explicit network modeling, only Gueler et al (2012) and Park (2008) investigate multimodal issues (e.g., waterway, rail and truck). Among papers with explicit network modeling, most of the work focuses on the calculation of the direct transportation related costs such as increased travel or warehouse costs.…”

“…Hallegatte (2008) proposed the Adaptive Regional Input-Output model and applied the adaptive IO measures to the impact assessment of Hurricane Katrina. Park et al (2005b) and Park (2008) constructed coupled demand-driven and supply-driven regional input-output models based on IMPLAN and CFS data, and applied it in the evaluation of the hypothetical terrorist attacks on civil infrastructure. In CGE modeling for disaster economics, Rose (2004) and Rose and Liao (2005) estimated the regional economic impacts of water supplies disruptions using a CGE model and considered resilience measures.…”