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

Yasuhiro Akakura, Tomoko Sasaki, Kenji Ono, Tomihiro Watanabe

Abstract


The development of global supply chains has progressed as a result of reduced transport costs and lead times associated with the expansion of the global container trade. The division of labor between production processes has been internationalized, and the trade in raw materials, parts, and capital goods between countries has significantly expanded. In addition, a “just-in-time” production and delivery system has been introduced, enabling the manufacturing and delivery of required quantities of products on demand. However, this extensive, highly efficient, and cutting-edge supply chain system is vulnerable in the face of various disasters. In the aftermath of the Great East Japan Earthquake, the disruption in the supply of auto parts from Japan slowed down the production of cars, globally. This indicates that the impacts of a disaster spread throughout a global supply chain. At the same time, the stagnation of transport can lead to an equivalent outcome. In this context, maritime transport and port operations face the risk of stagnation induced not just by natural disasters but also by man-made disasters such as strikes, explosive accidents, terrorism, and bankruptcy of shipping companies. Against this background, a review of the 2014/15 U.S. West Coast port disruptions was conducted to assess its impact on the international container transport and the world economy. The findings of the study indicated that the disruption induced an additional two weeks of transportation lead time between the United States and East Asian countries. Direct losses were estimated at above US$7 billion and indirect losses were estimated within a range of US$6 to 8 billion. In addition, a procedure is proposed for reducing the economic impacts of the stagnation of maritime transport and port operations on world trade.

Keywords


Supply Chain; Container Transport; Man-Made Disaster; Port Disruption; Economic Impact

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