Historically, shipping via waterways has been a strong source of commerce because of the relatively low-cost nature of ocean and river travel. Cities tend to be founded near bodies of water, in part to take advantage of this dynamic. To fully exploit the natural resource, however, infrastructure needs to be built to provide docking areas, loading and unloading capabilities, customs inspections, and take-away infrastructure, usually via truck or rail depots. Building a new a harbor or port or refurbishing an old one helps cities on the water to increase revenue and build industry. Additional docks and piers increase efficiency and revenue.
Reducing Wait TimesExpansions of ocean- and river-trade facilities bring immediate benefits by reducing the amount of time that ships spend waiting to be loaded or unloaded. Cargo ships are contracted with daily rates, so if a ship sits in a harbor for extra days waiting in line to be inspected and unloaded, the shipper has needlessly lost money. All else equal, a port with lower wait times will attract more traffic.
Eliminating bottlenecks should be a major focus of any new construction or upgrade facility. Bottlenecks can occur offshore if there is not enough passable water, in which case further drudging is necessary to deepen the harbor. Unloading ships may take longer than necessary without these improvements, and shipping companies may take their business elsewhere. Moving the cargo from the dock to its final destination can also be an area of concern, which can be alleviated by building additional rail and trucking facilities.
More Traffic Leads to More RevenueCargo volume is the lifeblood of import and export facilities. Governments that charge import or export tariffs on certain merchandise generate more revenue as more goods flow through their ports, an important variable in the investment calculation. Increasing the facilities increases the revenue.
Another consideration is job creation. Every incremental ton of cargo adds incremental jobs to a local economy. Railroads and trucking firms must add staff to handle the higher demand. Shipping companies expand crews and the number of ships they send to the port. Ancillary industries, such as maintenance and repair, hospitality services and warehouses also benefit from the influx of cargo and people. Along every step of the value chain, wealth is created for business owners, employees and taxpayers from higher sales and income taxes. These wealth effects are a vital source of economic growth and are a strong argument for investing in upgraded port and harbor facilities.
Investments in infrastructure generally garner debate because of the large-scale nature of the projects, costs to taxpayers, environmental impacts and public benefits. Upgrades to port and harbor facilities make worthwhile investments and help struggling cities on the water to realize additional business and revenue.
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