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Demand-Driven Harbor Financing

About the Project

The Nation’s water-based logistics is governed by Congressional appropriation. We sought to reinventing financing mechanisms using demand-driven (infrastructure bank-type) opportunity cost funding structures.

In collaboration with the US Army Corps of Engineers and West Point Military Academy, we have been exploring how the government appropriations model to fund harbor maintenance in the Great Lakes Region and the Nation’s seaboards could be converted in a revolving banking structure driven by shipping needs.

Maintenance dredging and port expansion for larger ships are expensive capital commitments allocated on a two year basis, with arguments based on benefit-cost analysis (BCA) targets.

Using data fusion and machine learning models integrating AIS data (the GPS system for ships), shipping cargo data, vessel dimensions (depth) for the Great Lakes iron ore supply chain, a model was built that links shipping efficiency with cost of dredging.

The results indicate that it would be feasible to allocate capital based on shipping needs driven by operational data.