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.     

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.     

Maritime transport and international seaborne trade

Drawing upon over four decades of the United Nations Conference on Trade and Development (UNCTAD) Review of Maritime Transport, this article considers selected key trends that have shaped the maritime transportation of today. Over the review period, a fundamental shift in the geography of trade has been observed, with developing countries increasingly driving growth in the world economy and seaborne trade, and becoming important players in global value chains. The specialization of countries, including in developing regions, in the provision of the maritime goods and services for which they have established a comparative advantage constitutes another major trend, a move away from previous patterns where developing countries were typically users of maritime transport services. The article also observes that bilateral freight sharing agreements between countries which were prominent in 1970s have largely lost their practical relevance, leading to a further liberalization of markets and resulting in overall relatively lower freight costs.     

Environmental quality within an interorganizational matrix: A case study of the SOHIO project

Abstract

Urban coastal management is now part of a large, complex set of regional, state, and federal interorganizational arrangements. This emerging matrix consists of a loosely linked set of nearly independent decision points. Cities have little capacity within this matrix for independent action. Recent experience in the SOHIO project by the City and Port of Long Beach, California, illustrates the point to which external agencies have taken over decision‐making for use of coastal resources. Public bodies removed from city affairs and politics and with interests in other than coastal affairs have become dominant and have overridden local policy‐making. The public costs to citizens and local governments of the emerging interorganizational matrix are very high and may be excessive. As it is emerging, the matrix is a semi‐autonomous set of bureaucratic decision points which is unhinged from community values and regular political infrastructures.     

Management considerations for accreting shorelines

Abstract

Natural coastal accretion in the United States occurs at river mouths, spits across embayments, inlets, capes and cuspate forelands, and pocket beaches. Human‐induced accretion occurs updrift of groins and jetties, landward of breakwaters, and in locations which are artificially nourished. Coastal accretion is usually temporary (years to tens of years). Erosion may occur due to deflection of streams and tidal current channels or to changes in sea level, weather patterns, or sediment budgets. A focus on ownership disputes or use of accreted land draws attention away from the long‐term problem of the development of land which may be subject to future erosion. Control mechanisms should be in place to direct development on accreting shorelines to make more effective use of the resource.     

Evaluation of manatee habitat systems on the northwestern Florida coast

Abstract

Threats to the survival of West Indian manatees (Trichechus manatus) vary throughout their range so that protection of this endangered species requires careful planning on a regional and local basis. The importance and vulnerability of various components of manatee habitats in the Crystal River area of northwestern Florida were assessed, using an ordinal‐combination mapping technique similar to procedures practiced in urban and regional planning. Habitat components were mapped and evaluated in juxtaposition with relevant characteristics of human use of the area, to identify areas of existing and potential manatee/human conflicts in need of reconciliation. Areas evaluated as the most important manatee habitats within this region include Crystal Bay and River, Homosassa River, and the Suwannee River estuary. Existing overlap of human activities with important manatee habitats is most critical near the urban communities of Crystal River and, to a lesser degree, Homosassa Springs. The need for integration of this ecological information into coastal land‐use planning is discussed.     

Dissolved organic matter in shelf waters off the Ría de Vigo (NW Iberian upwelling system)

Net in situ production and export of dissolved organic carbon (DOC) and nitrogen (DON) have been studied in shelf waters off the Ría de Vigo (NW Spain), as part of a comprehensive hydrographic survey carried out from September 1994 to September 1995 with a fortnight periodicity. DOC and DON correlated well (r=+0.78), the slope of the regression line being 12.0±0.7 mol-C mol-N⁻¹, about twice the Redfieldian slope of particulate organic matter, 6.5±0.2 mol-C mol-N⁻¹ (r=+0.95). Labile DOC and DON accumulated in the upper 50 m during the upwelling season (March–September), mainly after prolonged periods of wind relaxation, when horizontal flows were reduced. This labile material represented 50% and 35% of the total (dissolved+particulate) organic carbon and nitrogen susceptible of microbial utilisation, which assert the key contribution of dissolved organic matter (DOM) to the export of new primary production in the NW Iberian upwelling system. This surface excess in shelf waters appeared to be formed into the highly productive Ría de Vigo (a large coastal indentation) at net rates of 4.4 μM-C d⁻¹ and 1.3 μM-C d⁻¹ in the inner and outer segments of the embayment respectively, and subsequently exported to the shelf. Once in the shelf, simple dilution with the inert DOM pool of recently upwelled Eastern North Atlantic Central Water (ENACW) occurred. Eventually, the DOM excess produced during the upwelling season is exported to the adjacent open ocean waters by the coastal circulation. Conversely, during the unproductive downwelling season (October–February), the lowest DOC and DON levels were recorded and export was prevented by the characteristic downwelling front associated to the seasonal poleward slope current.     

The combined effect of rain and wind on air–water gas exchange: A feasibility study

A series of experiments were conducted at University of Delaware's Air–Sea Interaction Laboratory to examine the combined effects of rain and wind on air–water gas exchange. During this study, ASIL WRX I, a combination of 3 rain rates and 4 wind speeds were used, for a total of 12 different environmental conditions. The SF₆ evasion method was used to determine the bulk gas transfer velocities, and airside profiles of wind and CO₂ were used to estimate flux–profiles of momentum and carbon dioxide. In addition to measurements of fluxes with and without rain in a wind–wave boundary layer, measurements of wave properties were also obtained. Rain is shown to alter the wind profile in the flume, and dampen surface waves. Also, SF₆ evasion indicates that with the present experimental setup, for most of the experimental conditions, rain and wind combine linearly to influence air–water gas exchange. Flux–profile relationships for marine atmospheric boundary layers, which were performed to scale up to field measurements, were explored by a comparison between SF₆-derived bulk fluxes and airside CO₂ profile measurements.     

The new governance structure of French seaports: an initial post-evaluation

France undertook a large port reform in 2008, which came into force in 2010–2011. It mostly applies a landlord port model to major French seaports, with the prediction that doing so will restore competiveness. This article presents the 2008 port reform, discusses why it was needed, notably with regard to the underperformance of container traffic, and details how new governing bodies are sharing their responsibilities amongst themselves. To this end, a textual analysis of the agenda items for the governing bodies created since 2011 of the largest French seaport, Port of Marseille, provides a means to compare the items discussed by the former management bodies. This analysis identifies a trend, in which the supervisory board focuses on global issues, the advisory board addresses local issues, and the board of directors considers internal issues. Even if ongoing, this transition creates favorable conditions to work more efficiently and may represent a step toward the better performance of French seaports.     

Panama Canal expansion: alleviating global climate change

This paper quantifies likely changes in greenhouse gas emissions which contribute to anthropogenic climate change, resulting from the expansion of the Panama Canal and the consequent increase in ship-borne commercial transportation from east Asia to the US east coast. Ocean transportation offers higher fuel economy and lower pollutant emissions compared with land transport. Additionally, truck and train transportation of cargo along the US land bridge threatens to overwhelm existing highway and rail systems and limit economic growth. The alternate transportation route for easterly transit of the Panama Canal will reduce overland traffic congestion and enhance economic development by maintaining freight flow efficiency.