Potential Impacts of Maritime Risk on Maritime Traffic Flows and Regional Economies: Case Study at the Straits of Malacca and Singapore

Abstract

This paper analyzes the vulnerability of the Straits of Malacca and Singapore (SoMS) to maritime risks. The impacts of the risk events on international cargo flows, transshipment at major ports, and domestic economies are simulated with an international cargo traffic simulation model and a spatial general equilibrium model. Both container cargoes and dry/liquid cargoes are covered. Three cases are analyzed: sea-lane blockade at the SoMS, stop of the service at Singapore Port, and increase of loading/unloading time at all ports in the world. Results show that the risks which occur at the SoMS impact on the economies in the whole Asia; container carriers may change transshipment ports — from littoral ports to other East Asian ports — if the risk events were to actually occur; and the economic impacts of the risk events depend on the cases and the countries. Finally, the implication to the maritime security policy is discussed.