An Estimation of the Economic Direct Loss Caused by Blockadeof International Straits and Canals on Global Trade and Economy
Yasuhiro AKAKURA1 and Kenji ONO2
1 National Institute for Land and Infrastructure Management, MLIT& Graduate School of Management, Kyoto University
2 Graduate School of Management, Kyoto University

Email: akakura-y83ab@mlit.go.jp

Abstract

The highly frequent, stable and inexpensive maritime transportation has contributed great progressof economic globalization. The international specialization, which is the subdivision of manufacturing
process and the overseas transfer of some process, has developed, and the trade volume of intermediate goods has increased greatly. However, the advanced global supply-chain represented by
the Just-in-Time system has been much vulnerable against a disruption of transport. Moreover, world
shipping operations concentrate at major straits and canals, which are called chokepoints. Therefore,a blockade of any one of these chokepoints will result in the devastating impact on the global tradeand economy.
This study estimates the economic direct loss caused by the blockade of chokepoints: the Strait ofMalacca and Hormuz, and the Suez and Panama Canal. First, ship passages through these chokepoints are identified by the ship movement data, which are tracked by AIS (Automated Identification
System) signals. Then, through cargo volumes and values are estimated from the shipping capacities.
It is noted that proportions of cargo volumes and values through these chokepoints to the global
maritime trade volume have increased. The total cargo value passing Straits of Malacca amounts to
US$ 3 trillion, which accounts for 18% of global trade.
In addition, the past natural and man-made disasters, which had the possibility to cause the blockade,are collected to prepare various loss scenarios. At the early stage of a blockade, the relevanttransport will temporally stop due to the maelstrom of traffic and, many cargoes will probably shift tothe air transportation. When the blockade continues, the shipping lines will seek detour routes, forwhich some additional navigation cost and time will be incurred. Functions of the ports next to thechokepoint will be temporally paralyzed. The direct economic loss is calculated by considering thesevarious additional costs. The scale of the loss may reach huge amount, if the US$ 7 billion direct lossof the 2014/15 US West Coast case is referred.

2Until now, it is hard to say that the importance of chokepoints is recognized sufficiently. Except forsome studies in particular straits and for limited cargo commodities, there seems no previous studies
that challenged to quantification of an impact of blockade on global maritime trade. The significanceof this study is tackling to identify possible risks latent in these chokepoints and urging need to build
resilient global-supply chain system against various disasters.

Keywords

Global Supply-Chain, Maritime Trade, Chokepoint, Container, Bulk Cargo

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