4. Global-Local Mismatch of the Economic Benefits of Ports
With the setting of global supply and transport chains, there has been a growing level of mismatch between the benefits of port activities and the scale and scope of these benefits. While at the aggregate level it is clear that port investments have economic benefits, the spatial and sectorial distribution of these benefits is far less evident. One particular mismatch concerns local (community) versus regional / national / global benefits. The following points underline this mismatch:
• Labor usually comes from the local community and its benefits (mostly wages) are derived in the region, particularly indirect job multipliers. As port employment went down because of mechanization and containerization, so did the local labor benefits. Yet, several port jobs are remunerated at a wage which is much higher than those usually found in the manufacturing sector.
• Capital usually does not come from the community, but is either provided by national and international funding sources, such as investment banks, pension funds and terminal operators. The return on this capital (e.g. loan or operational revenues) thus does not accumulate in the port region but along global financial centers.
• Firms can be local in ownership but the commercial trends discussed above have underlined vertical and horizontal integration in the port industry. This means for instance that terminal operation at one port is usually part of a portfolio of terminals located in different ports across the region or even the world. Thus, profits derived from terminal operations are not necessarily invested in the port they were generated.
• Port land use is usually regulated by leasing and concession contracts, but quite often land prices are a tool for attracting investors and they usually do not reflect real value. This underlines that the impacts of ports on real estate values are not necessarily fully accounted.
• Local transport infrastructure, namely roads, are usually provided for free (or at a fee lower than costs). This represents a form of local or regional subsidy for globally focused activities.
• Taxes and custom duties are just partly earned by the port region. They are usually a national source of income used to fund for other social and infrastructure programs.
• Environmental (pollution) and social (noise, accidents) externalities are assumed by the community while the generators of these externalities usually bear only a fraction of them.