The purpose of this study is to report the influence of changes in the transportation system on local towns. In 1994, the Channel Tunnel was opened and train services started between Britain and France. It is interesting, therefore, to examine the recent changes in existing port towns as their ferry services face the loss of cross-Channel trade. The port towns affected are Ramsgate, Dover, Folkestone and Newhaven, all of which are located in the South East of England. In recent years, Dover has made rapid progress, but the other ports are declining. In particular, the passenger trade to and from Newhaven port was the lowest among the above four ports in 1997. The reasons are as follows: Firstly, there now exists a diversity of modes of transportation for cross-Channel travel. Several rival modes are appearing. Among them, the cross-Channel train service represents the most serious competition since it is not influenced by the weather, and the new competition from low cost airlines such as Easy Jet is also significant. Secondly, passengers on ferry services who have, as the main purpose of their trip, the purchase of liquor or cigarettes, will move to Dover following the abolition of the tax exemption system ('duty-free') within the EU area that came into operation in July 1999, because this route is the cheapest and takes the shortest time for the cross-Channel journey. Thirdly, Dover has good access to the motorway network, and is therefore in 'time-distance' terms near to London and to the other large British cities. This means that Newhaven's passenger market area will tend to be restricted to East and West Sussex, and to parts of surrounding counties such as Surrey. Therefore, the number of passengers using Newhaven will not increase rapidly. In Newhaven, the cross-Channel ferry service which had been in operation for 150 years, was discontinued in January of 1999, since when, the people of Newhaven have come to expect further cuts in the service and have made efforts to grope for the regeneration programme to reinvigorate local economy.