Port and Modal Elasticity Study

This study determined the economic viability and impact on demand for San Pedro Bay Port services of assessing additional port user fees to fund major infrastructure improvements to provide congestion relief. The project analyzed the long-run elasticity of port demands as a function of access fees, determining what levels of fees would induce traffic diversion to other ports or induce shifts in modal shares (truck vs. rail) at the San Pedro Bay Ports (SPB). The study found that SPB import volume is much more elastic with respect to congestion than with respect to container fees; without congestion relief, even a small container fee would drive some traffic away from the SPB. With congestion relief, San Pedro Bay imports are relatively inelastic up to an import fee value of about $200 per FEU. At this fee level, total imports via the SPB Ports are estimated to decline by 4 percent or less, while total trans-loaded volume would rise by an estimated 12.5 percent. The latter suggests a significant increase in economic activity in Southern California.