Evaluating the Consequences of an Inland Waterway Port Closure With a Dynamic Multiregional Interdependence Model

Abstract

As intermodal hubs connecting barge, train, and truck transportation modes, inland ports play an important role in U.S. and global commerce. Like coastal ports, inland ports face the risk of malevolent attacks, man-made accidents, and natural disasters. However, most port impact studies focus on the consequences of one of these disruptive events suddenly closing a coastal port. This paper examines the economic impact of suddenly closing an inland port by combining a simulation and a multiregional input-output model. The simulation models how companies may react if an inland waterway port suddenly closes, and the multiregional dynamic inoperability input-output model quantifies the interdependent effects of these decisions. We deploy this simulation and model on a case study involving an Oklahoma port on the Arkansas River. The case study indicates that, if a financial penalty is imposed on companies for delivering their commodities late, companies will move their products by train rather than wait for the port to reopen. These decisions save billions of dollars in production losses for the states that use the port. We discuss the implications of these results for policymakers concerned about limiting the consequences of port closures.