Where cruise ships are given pre-emptive priority over cargo ships, increased cruise traffic may result in a net loss of welfare.
Topic: 14.3 Ports and Canals
Dynamic programming is used to allocate cargo among ports and to decide when and where to invest. It is found that optimum port charges cover costs of investment.
The authors present a model based on nonlinear programming techniques to plan future expansion in the congested harbours of Taiwan. The aim is to secure optimal flows of goods through the harbours, and to consider the interests of the various inland regions.
Future changes in traffic flows must be considered in the timing of transport projects. The authors apply their models to duplication of a shipping berth and to new urban and rural roads.
The projected deepening and widening of the Suez Canal would be economically beneficial both to Egypt and to the users (including the oil-producing countries, the oil companies, the shipping industry and the consuming countries). The authors reach this conclusion after reviewing the estimated cost in relation to the quantities of Middle East oil going to northwestern and to southern Europe, comparative costs of transporting it by the Cape route and by existing and projected pipelines, and future revenue under possible new toll systems.
Containerisation and other new techniques call for large new investment in ports. How should this be allocated? The pricing system used by port authorities needs reform. The difficulties of cost-benefit analysis can be overcome by the use of calculated shadow prices. A central co-ordinating body is needed.