Lecture 1: International Trade, Roles and Functions of a Port

Question 1

What is a port?

Answer 1

An area within which ships are loaded with and discharged of cargo, including waiting areas and connections to other transport modes.

A port acts as a gateway/load center for goods and passengers between ships and the shore.

Question 2

How does a port differ from a terminal?

Answer 2

A port is a large area, while a terminal is a specific facility within a port for cargo handling, storage, and transportation.

A port can contain multiple terminals, such as Singapore’s port.

Question 3

What are the major terminals of the Port of Singapore?

Answer 3

• Tanjong Pagar
• Brani
• Keppel
• Pasir Panjang
• Tuas
• Jurong Port

These terminals serve different types of cargo and operations.

Question 4

What are the types of terminals at the Port of Singapore?

Answer 4

• Container Terminals
• Bulk Terminals
• Multi-Purpose Terminals
• Ro/Ro (Roll-on/Roll-off) Terminal

Each terminal type serves different cargo handling needs.

Question 5

What is the basic operational function of a port?

Answer 5

Cargo handling.

This is the primary function that ports perform.

Question 6

What are the key elements of port production?

Answer 6

• Resources: Personnel, land, capital
• Firms: Port operators/companies
• Households: Final consumers of port services

These elements contribute to the overall operation and service provision of ports.

Question 7

What are the objectives of port owners?

Answer 7

Contribute to national economic development.

Often, port owners are government entities focused on economic growth.

Question 8

What do port operators aim to achieve?

Answer 8

Cover costs and make a profit (mainly private operators).

This is essential for the sustainability of port operations.

Question 9

What are the three major types of multiplier effects in port economics?

Answer 9

• Direct: Refer to the immediate economic contributions of port services, including activities directly linked to port operations.
• Indirect: arise from the supply chain and support activities required to sustain port operations. Expenditures by port-related businesses on goods and services from other industries (e.g., purchasing fuel, maintenance services, or equipment manufacturing)
• Induced: occur when income earned by employees and businesses directly or indirectly linked to port activities is spent in the broader economy. E.g port workers going to the movies, multiplier impacts amplify as spending circulates

These effects demonstrate how initial spending in ports ripples through the economy.

Question 10

What does the income multiplier measure?

Answer 10

The total increase in income resulting from the initial spending.

It reflects the ‘value added’ at each stage of economic activity.

Question 11

What types of effects does Type II multiplier include and how does it differ from Type I multiplier effect?

Answer 11

Direct, indirect, and induced effects.
While Type I includes only Direct & Indirect Effects

Type II gives a more complete picture of the total economic impact.

Question 12

What are the 3 main economic functions of port?

Answer 12

Cargo handling is the basic, operational function of a port.

Commercial: storage and distribution function.

Industrial: function related to adjacent industrial sites.

Question 13

What are the fundamental roles and characteristics of port?

Answer 13

1. A port needs to be able to handle both ships and inland transport vehicles (like trucks and trains, and sometimes even inland waterways).
2. It looks outwards over the sea and inwards over its economic hinterland (the area it serves).
3. Essentially, a port acts as a trade facilitator, boosting a nation’s economy