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Journal of Ocean and Coastal Economics

Document Type

Research Article

Abstract

International trade is vital to the U.S. economy. As waterborne traffic accounts for about 40 percent of all international cargo value and 70 percent of international tonnage, regulatory changes involving waterborne transportation may significantly impact the United States (US) economy on both local and national levels. A Voluntary Speed Reduction (VSR) program reduces vessel speeds off the central coast of California for vessels 300 gross tons and larger from May 1st to November 15th to protect whales and other marine mammals. This study investigates the magnitude of changes in vessel costs associated with VSR requests.

This analysis contributes to the literature through more comprehensive estimation of the private and societal impacts that include vessel main propulsion fuel use, vessel auxiliary power fuel use, vessel capital cost, vessel administrative and overhead cost, container capital cost, inventory carrying cost and societal cost from emissions from main propulsion fuel and auxiliary fuel use. Calculations suggest full compliance with NOAA 10-knot speed limitations for all vessel types in VSR zones results in an annual increase of costs to vessel operators and a concurrent reduction in societal costs due to lowered emissions. Net annual costs are estimated to increase about $3.5 million. This represents a 1.3 percent increase in total annual costs within the VSR. If container vessels were allowed a minimum 12-knot speed, added annual cost increases of $2.1 million would be expected, representing about a 0.8 percent increase. Average vessel transit distances within the VSR represent only a minor portion of overall transit distances. With total trip distances between San Francisco and Vancouver, BC (695 miles), Hawaii (2,500 miles), Shanghai (5,337 miles), Singapore (7,337 miles), added trip cost within the VSR amortized across the entire length of the voyage would result in de minimis increases.

Creative Commons License

Creative Commons Attribution 4.0 License
This work is licensed under a Creative Commons Attribution 4.0 License.

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