The economic importance of the Straits of Malacca and Singapore: An extreme-scenario analysis
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This paper proposes a decision tree model to estimate the loss to global economy on the hypothesis of an extreme scenario of blockade of the Straits of Malacca and Singapore. The insurance surcharges, inventory costs and the time values of cargoes, and Time Charter Equivalent rate are used to estimate the psychological loss, the loss to industries, and the loss to carriers, respectively. Interestingly, there is a pseudo-paradoxical phenomenon with respect to the loss to carriers. An illustrative example is also provided to explain the "Malacca Paradox".
Transportation Research Part E: Logistics and Transportation Review
Copyright 2012 Elsevier. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.