Estimating the economic loss of a seaport due to the impact of COVID-19

Abstract

Sea ports are key nodes of global trade and economy, but are vulnerable to hazards, catastrophes and epidemic outbreaks. Since the emergence of COVID-19 infection at the end of 2019, the operations of seaports, especially container ports have been hit hard. This paper aims to explore the impacts of COVID-19 on container ports’ operations, clarify the potential economic losses of ports and propose coping suggestions for recovery. Five scenarios of port recovery have been set and the revenues of the port under epidemic outbreaks are estimated. The economic loss could be modeled as the difference between original revenue a port should obtained without the impact of COVID-19 and the actual revenue considering the impact of COVID-19. The container port of Shanghai is selected as the case study. Results and sensitivity analysis reveal that slower the recovery develops, much more loss will be borne by the port. However, there is also a possibility that the port achieves increased income with a surging boom of shipping demand. The loss of port due, handling service, facility security fee and berthage charge are major losses. Besides, port handling efficiency and fleet structure are also found crucial for reducing economic losses. Reducing containership’s handling time and serving larger ships would also help the port reduce economic losses.