Analyzing the structure of informal transit: The evening commute problem

Through the use of a profit-maximizing continuum approximation model, this paper systematically analyzes the development and structure of informal transit systems as a function of the network, user, and modal characteristics. This study examines the evening commute problem along a linear corridor where passengers originate uniformly from a central business district and have destinations uniformly distributed along the corridor. Informal transit drivers who are profit-maximizing will be compared against the traditional case of coordinated, government service that aims to maximize the total welfare. Policies, such as fare regulation and vehicle licensing schemes, will be presented to help rationalize informal transit service using a government-operated service as the baseline.     

Investment strategies in market uncertainty

The nature of the global economy is one of dynamic change. Shipping is a service industry with its demand related to changes in international trade levels and patterns. As a consequence shipping is subject to sometimes unpredictable swings in demand so that the operator is required to make strategic planning decisions while navigating through boom or bust environments. While boom economies generate rising freight rates which are welcomed and encourage investment, ship operators may also have to face falling freight demand and declining freight rates that may have significant impact on profitability, often falling to uneconomic levels for extended periods. In such a period of uncertainty and declining profitability management will make operational decisions to reduce costs. However, shipping lines operate in a market environment so any decisions made to rationalize the trade may have significant long-term competitive implications. For example, traditional micro economic theory might suggest that the prudent strategy to adopt would be to close down the operation and reopen when the market conditions improve. In a world of certainty or when costs of taking this action are zero, this would be a valid strategy. However, because of fear of competitors taking up a line's market share if the shipping company exits, even temporarily, this strategy cannot be valued simply in terms of shut-down and start-up costs. A further consideration is the fact that standard capital budgeting techniques, such as Net Present Value (NPV), cannot incorporate the flexibility to respond to new information and strategic responses explicitly into their investment analysis. This paper will demonstrate the use of Real Option Analysis (ROA) to provide guidelines for decisions about closing operations in adverse market conditions.     

Maritime investment strategies with a portfolio of real options

The maritime industry operates in a dynamic global environment subject to a great number of variables. In this context, the investment challenge facing shipowners is correctly to value alternate mutually exclusive investment strategies before proceeding with confidence to commit to a project which will add the greatest value to the firm. To survive in the competitive market environment shipping companies must be flexible. Companies that rely solely on traditional discounted cash flow analysis may be underestimating the true value of their investment by not valuing any embedded real options specifically. To avoid misallocation of resources, the true value of these embedded options (strategies) should be recognised and quantified where possible for inclusion in the capital budgeting process. Using real options analysis, (ROA), as a development of the financial pricing advances of the 1970s, flexibility is valued like a financial option using non-arbitrage and added to the present value of the original strategy to derive the present value of the flexible strategy. The more uncertainty (risk) present, the greater will be the value of the real options. Similarly, the larger the shipowner's portfolio of options (strategies) from which to choose, the greater will be the valuation of the project. Real options give the shipowner the flexibility to exchange one risky income stream associated with one strategy for that of another. The analysis shows that if managers have the flexibility of more than one embedded option (in this paper, a European put associated with a replacement investment and an option on the maximum of two operating strategies, trading or chartering out) then the project will have greater value than if the there was no choice or if it was limited to one or the other strategy. Sensitivity analysis extends the analysis to demonstrate that if the volatilities of the risky income streams are highly correlated then the additional value of this flexibility will diminish.     

The impact of the Panama Canal expansion on Panama’s maritime cluster

The Panama Canal is currently in the process of a major expansion effort. After the new set of locks is opened in 2016, significantly larger ships can traverse the Canal. The current lock system has been in place for over 100 years, even though the size of ocean-going vessels has expanded considerably. One impact is on Panama’s maritime cluster. It is expected that the expansion will result in greater demand for many of the goods and services provided by the cluster. This article examines the economic impact of the Canal expansion on Panama’s maritime cluster. Clusters of economic activity can result in economies of agglomeration and supply chain network effects. Without these economies and network effects, clusters would not have a competitive advantage over businesses that are not in a cluster. It is expected that with a larger cluster, both agglomerative economies and network effects will increase. But, which cluster components will grow and which will not be affected to a great extent? To what extent will bottlenecks appear? These are some of the questions that this article addresses.     

Integrating Climate and Ocean Change Vulnerability into Conservation Planning

Tropical coastal and marine ecosystems are particularly vulnerable to ocean warming, ocean acidification, and sea-level rise. Yet these projected climate and ocean change impacts are rarely considered in conservation planning due to the lack of guidance on how existing climate and ocean change models, tools, and data can be applied. Here, we address this gap by describing how conservation planning can use available tools and data for assessing the vulnerability of tropical marine ecosystems to key climate threats. Additionally, we identify limitations of existing tools and provide recommendations for future research to improve integration of climate and ocean change information and conservation planning. Such information is critical for developing a conservation response that adequately protects these ecosystems and dependent coastal communities in the face of climate and ocean change.     

Public law litigation and marine affairs: The boldt decision

Abstract

The management and conservation of the marine environment and its natural resources are increasingly understood to be issues of public policy with consequences for society at large. On a variety of dramatic occasions over the last decades, the federal judiciary has departed from its traditionally passive role in the shaping of social policy. This paper examines a critical marine controversy, the Boldt Decision (U.S. v. Washington 1974), to illustrate and evaluate nontraditional judicial behavior. The first two sections introduce Indian‐United States treaties concerning Pacific Northwest salmon resources, and the unfolding of the Boldt Decision. A third section argues that a “public law”; model of litigation fits the legal events of the Boldt Decision. A fourth section addresses the competence of the Boldt court as it is manifest in judicial organization, analysis, and implementation. A final section comments on the potential for public law litigation elsewhere in the governing of marine affairs.     

Port competition in Latin America and the Caribbean: the role of concessions and competition policy

Appropriate port regulation and competitive forces tend to be related to higher levels of operational and economic performance of ports. From a policy-making perspective, pursuing efficiency and securing competition in ports to reach a level playing field is a two-step process requiring (1) ex-ante regulations to set the rules that maximize the competition for the market, especially when the policy objective is to attract private operations to ports on competitive concession processes and (2) ex-post competition policy to monitor and preserve competition in the market. This paper studies port regulation in Latin America and the Caribbean (LAC) from a competition perspective, analyzing both ex-ante and ex-post policies implemented in the region. The analysis reveals that the competitive environment in LAC is low, giving room for possible anticompetitive practices in the LAC port sector. Since the end of the 1990s, approximately 80% of container terminals in the region were granted to only five companies. Chile and Mexico have been found to be the best practices in the region, with better conditions assuring robust competition in the market. The main policy implication from this analysis is the need for a stronger involvement of antitrust agencies throughout the port concession processes.     

Who switches to hybrids? A study of a fuel conversion program in Colombia

Air pollution from mobile sources is an important environmental problem in larger cities. In 2001, a program was implemented to encourage the use of natural gas in vehicles in the Aburrá Valley in Colombia, with incentives to convert small cars from gasoline and diesel to hybrid engines with natural gas, most notably a cash subsidy. Using a survey administered to both commercial and private car owners we study the determinants of conversion under this fuel conversion program. We thus obtain information about the reasons for adoption of new technologies in vehicles. This allows us to discuss the possible outcomes of this type of policy. Results show that a large part of owners who switched would have done it anyway without the subsidy. Based on the findings, commercial vehicles are most likely to be converted to natural gas vehicles.     

Seasonal changes in wildlife use of motorway crossing structures and their implication for monitoring programmes

Multiple factors determine the use and effectiveness of wildlife passages and crossings installed in new roads as mitigation measures against the barrier effect. It is unknown whether factors such as seasonality determine the use of these structures. This analyses the seasonality of structure used by vertebrates. Forty-eight transverse structures crossing the A-52 motorway in north-western Spain are studied during the summer and winter of 2002–03. The use of structures by terrestrial vertebrates was monitored by tracks left in marble dust and photographic systems, and comparisons carried out by means of generalized lineal methods for count data. Structural factors mostly determined the differential use of passage types by species but seasonal changes were detected both in the intensity of use and in passage selection by some species.     

Optimisation and heuristic approaches for assigning inbound containers to outbound carriers

Due to economical and/or geographical constraints, most of the time overseas containers cannot be directly shipped to their destinations. These containers visit transhipment ports where they are first unloaded and temporarily stored and then loaded onto smaller vessels (feeders) to be transported to their final destinations. The assignment of these containers to outbound vessels necessitates several factors to be taken into account simultaneously. In this paper, we develop a mathematical model to reflect multiple objectives with priorities and to assign these containers to different vessels at the transit container port terminal. Although we solve a single-objective (with the weighted sum of objectives) mathematical model to optimality, we also propose two heuristic approaches to solve this complex problem for a transit agency. The first heuristic is shipment based and has four variants differing in how the opportunity costs of the assignments are calculated. The second greedy heuristic is trip based, where the goal is to maximise the capacity utilisation of the vessels. The heuristics return very promising solutions in ignorable computational times. We also provide real-life cases and present our conclusions.