Electrifying cargo handling equipment can change costs throughout the freight transportation system, affecting port operations, supply chains, and regional competitiveness. A study by Dr. Dan Wei and Dr. Genevieve Giuliano uses REMI PI+ to examine these connections at the Ports of Los Angeles and Long Beach, showing how equipment investment, electricity prices, and funding decisions influence economic outcomes over time. Click here for a preview of this article from ScienceDirect.

Published in Research in Transportation Business & Management, the study evaluates the transition from conventional cargo handling equipment to electric alternatives over 2020–2045. Under its base-case assumptions, the analysis estimates a $7.42 billion reduction in California gross state product relative to the baseline, measured in net present value in 2019 dollars. The study does not value the public-health and climate benefits of reduced emissions, so this result should not be interpreted as a complete assessment of the transition’s societal costs and benefits.

Connecting Port Investment to the Regional Economy

The researchers examined five major equipment categories: yard tractors, rubber-tired gantry cranes, side picks, top handlers, and forklifts. Their analysis estimates incremental equipment purchases, battery replacements, chargers, and supporting infrastructure, alongside changes in fuel and maintenance expenses. The baseline represents continued operation and replacement of conventional equipment.

These direct costs and savings became inputs to a two-region REMI PI+ model covering California and the rest of the United States, with 160 economic sectors. The model tracks effects on employment, gross state product, industry output, personal income, and prices. Its regional and industry detail also allows the researchers to examine shifts in economic activity between California and other states.

REMI PI+ captures both supply-chain relationships and responses to changing prices and production costs. In this study, that means tracing how higher port costs can affect downstream businesses and competitiveness, while also accounting for the economic activity generated by equipment purchases and infrastructure construction. The dynamic analysis shows how these effects change as investment and replacement cycles unfold.

Understanding the Findings

The base case estimates approximately $6.9 billion in incremental direct costs over the study period, expressed in net present value using a 3 percent discount rate. Equipment purchases and battery replacements account for more than 70 percent of those costs. The model estimates a cumulative reduction of 96,771 job-years across California, equivalent to about 3,722 fewer jobs on average each year relative to the baseline. A job-year represents one job for one year; the cumulative figure is not a count of permanent job losses.

The largest economic effects occur in the earlier years. A key base-case assumption is that two electric units are initially needed to replace one conventional unit because of battery range and charging constraints, followed by one-for-one replacement as technology improves. Investment provides an economic stimulus, but purchases from outside California limit how much of that stimulus remains within the state.

The authors find that the statewide effects are small in percentage terms, while impacts on port-related industries are more concentrated. The model also projects increased activity in port-related sectors elsewhere in the United States, illustrating the importance of considering interregional competition when assessing transportation and energy policies.

Testing the Factors That Shape Economic Outcomes

Sensitivity analyses show that the results depend on technology, energy costs, and policy design. Lower- and upper-cost cases produce estimated California GSP reductions ranging from $5.32 billion to $10.01 billion in net present value. These cases vary equipment and infrastructure costs, the timing of one-for-one replacement, and electricity prices. Separate scenarios test government incentives, how subsidies are funded, and the extent to which ports pass increased costs to customers.

The study’s capital-cost estimates reflect technology and market conditions as of 2021. It assumes adequate electricity availability and no additional automation, and excludes broader grid transmission upgrades and contingency measures for power outages. These boundaries matter when applying the findings to future investments or other ports.

For transportation agencies, port authorities, and policymakers, the study demonstrates how REMI modeling can connect infrastructure investment and operating costs to employment, supply chains, and regional economic performance. Testing alternative assumptions helps decision-makers understand where costs are concentrated, how competitiveness may change, and which implementation choices warrant closer examination alongside environmental and public-health benefits.

Source: Wei, D., and Giuliano, G. (2025). “Estimating the economic impacts of cargo handling equipment electrification: A case study of the San Pedro Bay ports.” Research in Transportation Business & Management, 59, 101281. Read the study