Direct, Indirect and Induced Economic Effects of Ports

The Port as a Funnel to Economic Development

Ports can be catalysts for economic development through a series of effects. The direct benefits involve the revenues that accrue from port activity and arise from the various charges levied on ships and cargo for port use. The indirect benefits involve firms that import or export goods from the port, usually concerning its hinterland. The induced benefits to the economy include the benefits that filter through to the suppliers of input factors, such as income to labor directly employed in port-related activities and income to industries supplying the port with goods and services, creating indirect employment. A growing challenge, particularly with containerization, is that the indirect and induced benefits can take place in areas unrelated to a port. This is particularly the case for advanced services such as finance and insurance.

Detailed explanation at the following link:

The Port as a Funnel to Economic Development | Port Economics, Management and Policy (