IMPACT ANALYSIS OF BLOCKADE OF THE STRAITS OF MALACCA AND SINGAPORE

摘要

The Straits of Malacca and Singapore has long been one of the most important shipping waterways inthe world from both an economic and a strategic perspective. If the Straits was blocked by incidents,not only the economies of the littoral countries but also the global industry will be significantlyaffected. This paper proposes an approach to estimate the psychological loss, the loss to industries(shippers), and the loss to carriers with respect to different severities of the blockade. A decision treemodel combining discrete choice models is applied to simulate the route choices of the ships when theStraits is blocked. The insurance surcharges, inventory costs and the time values of money of cargoes,and time charter equivalent rate are used to estimate the psychological loss, the loss to industries, andthe loss to carriers, respectively. The result shows that the loss to carriers contributes the most out ofthe total loss. Interestingly, there is a pseudo-paradoxical phenomenon with respect to the loss tocarriers, that is, if the blockade time is longer than 4.5 days, the longer the Straits is blocked, the lessthe loss to carriers. This is because the longer blockade forces the ships to make wiser choice,transiting from the Sunda Strait or the Lombok Strait, to decrease the total delay time. An illustrativeexample is also provided to explain the "Malacca Paradox".