# Presentation: 161829

## Economic Implications ofPort Call Dislocationin the Port of Boston

- Hauke Kite-Powell, WHOI
- Brad Wellock and Deb Hadden, MASSPORT
- April 2005

## Context

- Ship strike mgt. measures (routing, speed) increase cost of transport
- Effects can be more severe for some ports than others
- Degrees of adjustment:
- No (additional) port call dislocation
- Occasional port call cancellation
- Service change / port call elimination

## Objective

- Estimate the direct and indirect economic effects of potential port call dislocation for the Port of Boston
- using MARAD’s Port Kit economic impact model (based on I/O model)

## MARAD Port Kit Model

- Estimates direct and indirect economic effects associated with changes in port activity or infrastructure.
- Direct effects: expenditures of businesses directly associated with the movement of waterborne cargo and passengers through the terminals, including vessels, terminals, cargo and passenger transactions, and inland transport.
- Indirect effects: expenditures of the port industries buying goods and services from other industries in the region.
- Induced effects: spending by employees of the port industries and their suppliers.

## Port Kit Inputs: Cargo

- Port services (tugs, pilots, dockage, etc.)
- Bunkers
- Loading/discharging
- Expendable supplies
- Inland movement
- Government requirements (customs, taxes, etc.)
- In-transit storage
- Cargo packing

## Port Kit Inputs: Passengers

- Port services (tugs, pilots, dockage, etc.)
- Loading/discharging
- Supplies and services
- Inland transportation
- Bunkers
- Gov’t requirements (customs, immigration, etc.)
- Spending per day/night ashore

## Input Summary (2003 data)

- Cruise:
- Port of call: 75 calls; 63,197 passengers
- Homeport: 43 calls; 137,155 passengers
- Container: ~100 calls; 155,273 TEU
- Liquid bulk: 400 tanker, 650 tank barge calls; 18.76 mt petroleum products (includes LNG)
- Dry bulk: 150 calls; 4.8 mt
- Autos: 100 calls; 90,000 vehicles

## Port Kit Model Results

|  | 

port
calls | $ millions/port call |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  | output | income | GSP | empl. |
| Cruise – homeport | 43 | 2.3 | 0.8 | 1.3 | 29 |
| Cruise – port of call | 57 | 0.9 | 0.3 | 0.4 | 7 |
| Container | 100 | 0.9 | 0.3 | 0.5 | 9 |
| Liquid bulk | 400 | 2.2 | 0.7 | 1.0 | 20 |
| Dry bulk | 150 | 1.4 | 0.5 | 0.7 | 13 |
| Automobiles | 100 | 0.3 | 0.1 | 0.1 | 3 |

- Port of Boston maritime: $800 million GSP; 15,000 jobs

## Scenarios

| 

 | 

lost port calls | 
$ million/year |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  | output | income | GSP | empl. |
| 1. MSC | 104 container | 92 | 30 | 49 | 920 |
| 2. COSCO | 52 container | 46 | 15 | 24 | 460 |
| 3. Norwegian Majesty | 27 homeport | 62 | 22 | 35 | 783 |
| 4. Royal Caribbean
      Cruise Lines | 12 homeport | 28 | 10 | 16 | 348 |
|  | 15 port-of-call | 14 | 5 | 6 | 105 |
|  | subtotal, RC | 42 | 15 | 22 | 453 |

## Likelihood of Dislocations

- Historical examples:
- Maersk SeaLand 2001 (Halifax-Boston-NY)
- VW 2002/03 (Boston to Davisville RI, $35/car)
- Volvo 2002 (Jacksonville to Brunswick, $10/car)
- Likelihood is difficult to estimate
- MSC operates with similar tide constraints
- Observed cost differentials are higher than direct costs estimated for ship strike management measures