C1 - Role and Function of Port

Question 1

What is a Port?

Answer 1

A port is an area within ships are loaded with and discharged with cargoes

It connects with other forms of transports

It also acts as a gateway through which goods and passengers are transferred

Question 2

What are the main economic functions of a port?

Answer 2

Cargo-Handling
The very basic operational function of a port

Commercial
The distribution and storage function of a port

Industrial
The function related to adjacent industrial sites

Question 3

What are Ports for? (OOU)

Answer 3

1. Port Owners
   Port owners are the governing authorities for most countries. It’s representative is usually the port authority. It contributes to the country’s economic development
2. Port Operators
   Their function includes cargo-handling and stevedoring. Operators could be either public or private enterprises. Their objective is to cover costs and make profit through operation.
3. Port Users
   Port users are shipowners and shippers. Their objective is to get the lowest possible port costs. Will head to ports that are price competitive, efficient and productive.

Question 4

What are the economic effects of port services? (multiplier effects)

Answer 4

The revenue generated by port services can have a magnified effect on the economy.

Direct multiplier effect:
Initial injection of spending by ships at the port for direct needs

Indirect multiplier effect:
Terminal operators buy goods and services from other producers.

It is computed by adding successive rounds of purchases until a stage is reached where production process requires no further inputs.

Induced multiplier effect:
Recipients of direct and indirect spending will spend part of their incomes on ‘consumption’

It could have diminishing effects due to leakages such as savings and imports.

Question 5

Implications of multiplier effect on SG Economy

Answer 5

The multiplier effect could be higher if SG is less dependent on foreign imports due to leakages

High levels of indirect and induced effects as port activities benefit other sectors due to strong linkages.

The employment effects are lower than other sectors, since port activities are more capital intensive. However, it is unlikely to create pressure on SG’s labour force.

Question 6

Direct Benefits to port

Answer 6

Direct benefits involves revenue accrued from port activities and arises from various charges levied on ships and cargoes for the use of the port.

For e.g. Berthing, Pilotage, Cargo-Handling

It also involves revenue generated from transport firms servicing the port such as trucking companies and railways.