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Is distance a good proxy for transport costs? The case of competing transport modes

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  • Inmaculada Martinez-Zarzoso
  • Felicitas D. Nowak-Lehmann

Abstract

In this paper, we analyze separately the determinants of maritime transport and road transport costs for Spanish exports to Poland and Turkey (markets for which maritime and road transport are competing modes) and investigate the different effects of these costs on international trade. First, we investigate the extent to which maritime and road transport costs depend on different factors such as unit values, distances, transport conditions, service structures, and service quality. Second, we analyze the relative importance of road and maritime transport costs in comparison with distance measures as determinants of trade flows. The main results of this investigation indicate that real distance is not a good proxy for transportation costs and identify the central variables influencing road and maritime transportation costs: for both modes, transport conditions are strong determinants, whereas efficiency and service quality are more important for maritime transport costs, and geographical distance is more important for road transport. Road and maritime transport costs are central explanatory factors of exports and they seem to deter trade to a greater extent than road or maritime transit time when endogeneity is considered.

Suggested Citation

  • Inmaculada Martinez-Zarzoso & Felicitas D. Nowak-Lehmann, 2007. "Is distance a good proxy for transport costs? The case of competing transport modes," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(3), pages 411-434.
    • Handle: RePEc:taf:jitecd:v:16:y:2007:i:3:p:411-434
    DOI: 10.1080/09638190701527186
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    6. Gordon Wilmsmeier & Inmaculada Martínez-Zarzoso, 2009. "Determinants of maritime transport costs -- a panel data analysis for Latin American trade," Transportation Planning and Technology, Taylor & Francis Journals, vol. 33(1), pages 105-121, October.
    7. Kiracı Kasım & Akan Ercan, 2020. "Empirical analysis of the relationship between trade wars and sea—air transportation," Economics and Business Review, Sciendo, vol. 6(3), pages 23-44, August.
    8. Ardelean,Adina Teodora & Lugovskyy,Volodymyr & Skiba,Alexandre & Terner,David Michael, 2022. "Fathoming Shipping Costs : An Exploration of Recent Literature, Data, and Patterns," Policy Research Working Paper Series 9992, The World Bank.
    9. Laura Márquez-Ramos & Inmaculada Martínez-Zarzoso & Eva Pérez-García & Gordon Wilmsmeier, 2011. "“Special Issue on Latin-American Research” Maritime Networks, Services Structure and Maritime Trade," Networks and Spatial Economics, Springer, vol. 11(3), pages 555-576, September.
    10. Inmaculada Martínez-Zarzoso & Gordon Wilmsmeier, 2010. "Freight Rates and the Margins of Intra-Latin American Maritime Trade," Ibero America Institute for Econ. Research (IAI) Discussion Papers 201, Ibero-America Institute for Economic Research.
    11. del Rosal, Ignacio & Moura, Ticiana Grecco Zanon, 2022. "The effect of shipping connectivity on seaborne containerised export flows," Transport Policy, Elsevier, vol. 118(C), pages 143-151.
    12. Yang, Xuejing & Low, Joyce M.W. & Tang, Loon Ching, 2011. "Analysis of intermodal freight from China to Indian Ocean: A goal programming approach," Journal of Transport Geography, Elsevier, vol. 19(4), pages 515-527.
    13. Juan Carlos Pérez-Mesa & Lucía Aballay & Mª Serrano-Arcos & Raquel Sánchez-Fernández, 2020. "Analysis of Intermodal Transport Potentials for Vegetables Export from Southeast Spain," Sustainability, MDPI, vol. 12(20), pages 1-16, October.
    14. Havenga, Jan H. & Witthöft, Ilse E. & Simpson, Zane P., 2022. "Macrologistics instrumentation: Integrated national freight-flow and logistics cost measurement," Transport Policy, Elsevier, vol. 124(C), pages 106-118.
    15. Pérez-Mesa, Juan Carlos & García-Barranco, M & Piedra-Muñoz, Laura & Galdeano-Gómez, Emilio, 2019. "Transport as a limiting factor for the growth of Spanish agri-food exports," MPRA Paper 119855, University Library of Munich, Germany.
    16. Zofío, Jose L. & Condeço-Melhorado, Ana M. & Maroto-Sánchez, Andrés & Gutiérrez, Javier, 2014. "Generalized transport costs and index numbers: A geographical analysis of economic and infrastructure fundamentals," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 141-157.
    17. Jordan Schwartz & José Luis Guasch & Gordon Wilmsmeier, 2009. "Logistics, Transport and Food Prices in LAC: Policy Guidance for Improving Efficiency and Reducing Costs," IDB Publications (Working Papers) 9324, Inter-American Development Bank.
    18. Pérez-Mesa, Juan Carlos & García-Barranco, M. Carmen & Piedra-Muñoz, Laura & Galdeano-Gómez, Emilio, 2019. "Transport as a limiting factor for the growth of Spanish agri-food exports," Research in Transportation Economics, Elsevier, vol. 78(C).
    19. Gomez-Herrera, Estrella & Martens, Bertin & Turlea, Geomina, 2014. "The drivers and impediments for cross-border e-commerce in the EU," Information Economics and Policy, Elsevier, vol. 28(C), pages 83-96.
    20. De Oliveira, Gabriel Figueiredo, 2014. "Determinants of European freight rates: The role of market power and trade imbalance," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 62(C), pages 23-33.
    21. Thomas Orliac, 2012. "The economics of trade facilitation [L'économie de la facilitation des échanges]," SciencePo Working papers Main tel-03681980, HAL.
    22. Patricia Sourdin & Richard Pomfret, 2012. "Trade Facilitation," Books, Edward Elgar Publishing, number 14596.
    23. Kazunobu Hayakawa & Ikumo Isono & Satoru Kumagai, 2020. "Transportation Costs in Archipelagos: Evidence from Indonesia," The Developing Economies, Institute of Developing Economies, vol. 58(3), pages 227-241, September.
    24. Schwartz, Jordan & Guasch, José Luis & Wilmsmeier, Gordon, 2009. "Logistics, Transport and Food Prices in LAC: Policy Guidance for Improving Efficiency and Reducing Costs," IDB Publications (Working Papers) 2541, Inter-American Development Bank.

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    More about this item

    Keywords

    Transport costs; transport mode; Spanish exports; international trade;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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