What Are The Role Of Ports?

Ports produce a combination of private and public goods. Public goods include those that are inherently indivisible and non-consumable, such as public safety, security, and a healthy environment on the one hand, and coastal protection works required to create a port basin on the other. Personal goods are both consumable and divisible and their use involves minimal economic externalities.

Much of the value of private goods can be captured in market transactions between private parties. However, a substantial part of the value of public goods cannot be captured in arms dealings. As a result, private firms have little incentive to produce them. When public goods are used they create positive externalities; The social benefits they generate exceed the price that private parties can charge for them. Thus, to ensure that adequate levels of public goods are maintained, some form of public intervention in their production is appropriate.

Ports of Napa represent a mix of public and private goods. They generate direct economic benefits (private goods) through their operations, as well as additional indirect benefits (public goods) in the form of business growth, second-order increases in production volumes, and collateral increases in trade-related services.

Many ports have used "economic multiplier effects" to justify direct public sector investment. Complexities arise in this dual production of both public and private goods, making defined roles and boundaries for the public and private sectors challenging in the port industry. This is particularly the case in the areas of maritime and port security, port security, and protection of the marine environment.

Through both targeted development policies and the unplanned development of interrelated industries, many ports have become places for industrial clusters. Industrial clusters are geographic concentrations of private companies that can compete with each other in particular areas of production and distribution or complement each other as customers and suppliers. Industrial clusters are a type of value chain, a web of interconnected activities that are mutually supportive and constantly expanding.

Clustering related activities improve competitive advantage by reducing transaction costs among them, increasing the productivity of cluster participants, promoting technological innovation, and encouraging the formation of new business spin-offs.

In terms of strategic development policy, many ports encourage co-development of various value-added services through franchising, licensing, and incentive leasing. Today, ports seek to attract enterprises that expand their logistics chain or provide them with specialized capabilities to add value to the cargo that is stored and handled in the port. Common services that many ports attempt to develop include ship repair, handling, maritime appraisal, insurance claims inspection, container maintenance, and banking.