Development of an Economic Framework to Evaluate Resilience in Recovering from Major Port Disruptions

2016Final ReportPDFTech ReportCA-16-293465A0533 TO 014Resilience (Materials)Port operationsDisaster resilienceEconomic factorsEconomic impactsEquilibrium (Economics)Evaluation and assessmentSeaportsService disruptionSupply chain managementEconomic Consequence AnalysisMulti-Region CGE ModelPort disruptionEconomicsMarine TransportationPlanning and ForecastingSecurity and EmergenciesTerminals and FacilitiesUnited StatesCaliforniaCalifornia. Department of TransportationChen, ZhenhuaWei, DanRose, AdamUniversity of Southern CaliforniaMETRANS Transportation Center (Calif.)California. Dept. of Transportation. Division of Procurements and ContractsUS Transportation CollectionPorts play a critical role in a nation\u2019s economic system. The impact of a major port disruption can reverberate across the entire economy through regional and national supply-chains. This study develops an operational framework to evaluate the effectiveness of a comprehensive list of potential resilience tactics that can help ports and related businesses in the supply-chain recover more rapidly from port disruptions. The TERM multi-regional computable general equilibrium (CGE) model, is adapted to quantify the relative contributions of various resilience tactics in reducing potential economic impacts of major port disruptions. Various types of resilience tactics on both the supplier-side and customer-side are formally integrated in the CGE modeling. Two port disruption scenarios caused by natural disasters that affect major seaports in California, representing lower-bound and upper-bound port disruption cases, are analyzed using the CGE model. The modeling results indicate that the lower-bound scenario could result in a GDP loss of $650.1 million and an employment loss of 7 thousand jobs. The combined effects of various relevant resilience tactics have the potential to reduce the economic losses by about 97%. The upper-bound scenario could cause total GDP losses of over $12 billion in California and $16 billion at the national level. However, resilience can reduce these impacts by about 75% for California and about 89% for the nation as a whole. Major resilience tactics on the supplier-side are ship rerouting and export diversion for import use. Major resilience tactics on the customer-side are use of inventories and production recapture. The port resilience analytical framework developed in this study is readily generalizable to port disruptions from other causes and at other geographical scales.75