Economic impacts of complex disasters affecting seaports and their associated supply chains

We develop a multi-regional computable general equilibrium (CGE) modeling approach to assess both direct and cascading supply-chain effects of complex seaport disruptions across U.S. regions and sectors. The analysis introduces a new, internally consistent method for estimating ship offloading congestion and the resilience effects of ship rerouting within the model’s production and trade structure. The model is illustrated by analyzing economic impacts of a complex seaport disruption involving a labor strike, wildfire-induced power outage, and terrorist attack at the twin ports of Los Angeles and Long Beach, the largest container port system in the United States. Results show that overlapping disruptions amplify losses well beyond the sum of individual events, with regional GDP in the Los Angeles Metropolitan area declining by $4.1 billion (0.37%) under our base case. Moreover, national-level impacts are substantially lower than the port region impacts because other regions of the country pick up a good deal of the slack of lost production in LA Metro. Incorporating resilience tactics, such as ship rerouting, excess capacity, inventories, and production recapture, reduces the port region losses by over 70%. These findings demonstrate that complex disruptions can lead to wide-ranging indirect economic effects, emphasizing the importance of integrating resilience into infrastructure investment, port operations, and national freight policy. In particular, enhancing inter-port coordination, increasing on-site electricity capacity, strengthening management effectiveness, and embedding resilience metrics into government programs can help reduce cascading risks and improve long-term economic stability.