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Determinants of Maritime Transport Costs

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  • Micco, Alejandro
  • Pérez, Natalia

Abstract

Recent literature has emphasized the importance of transport costs and infrastructure in explaining trade, access to markets, and increases in per capita income. For most Latin American countries, transport costs are a greater barrier to U.S. markets than import tariffs. The authors investigate the determinants of shipping costs to the U.S. with a large database of more than 300,000 observations per year on shipments of products at the six-digit HS level from different ports around the world. In addition, the authors find that efficiency of ports is an important determinant of shipping costs. Inefficient ports also increase handling costs, which are one of the components of shipping costs. The authors try to explain variations in port efficiency and find that they are linked to excessive regulation, the prevalence of organized crime, and the general condition of the country's infrastructure. Finally, the authors present a number of success stories in Latin America to show that private involvement in port management leads to efficiency and lower costs whenever it is accompanied by labor reform, and when monopoly power is reduced through either regulation or competition.

Suggested Citation

  • Micco, Alejandro & Pérez, Natalia, 2002. "Determinants of Maritime Transport Costs," IDB Publications (Working Papers) 3700, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:3700
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    References listed on IDEAS

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    Cited by:

    1. Borchert, Ingo & Mattoo, Aaditya, 2016. "The trade reducing effects of restrictions on liner shippingAuthor-Name: Bertho, Fabien," Journal of Comparative Economics, Elsevier, vol. 44(2), pages 231-242.
    2. Eddy Bekkers & Joseph F. Francois & Hugo Rojas†Romagosa, 2018. "Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route," Economic Journal, Royal Economic Society, vol. 128(610), pages 1095-1127, May.
    3. Qiao Lei & Chris Bachmann, 2020. "Assessing the role of port efficiency as a determinant of maritime transport costs: evidence from Canada," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 22(4), pages 562-584, December.
    4. Gaël Raballand, 2003. "Determinants of the Negative Impact of Being Landlocked on Trade: An Empirical Investigation Through the Central Asian Case," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 45(4), pages 520-536, December.
    5. Enrico Pastori & Miriam Tagliavia & Enrico Tosti & Simonetta Zappa, 2014. "The survey on international freight rates in Italy: methods and results," Questioni di Economia e Finanza (Occasional Papers) 223, Bank of Italy, Economic Research and International Relations Area.
    6. Slack, Brian & Gouvernal, Elisabeth, 2011. "Container freight rates and the role of surcharges," Journal of Transport Geography, Elsevier, vol. 19(6), pages 1482-1489.
    7. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2006. "Road and Maritime Transport Costs: A Comparative Analysis of Spanish Exports to Poland and Turkey," Ibero America Institute for Econ. Research (IAI) Discussion Papers 138, Ibero-America Institute for Economic Research.
    8. Amann, Edmund & Baer, Werner & Trebat, Thomas & Lora, Juan Villa, 2016. "Infrastructure and its role in Brazil's development process," The Quarterly Review of Economics and Finance, Elsevier, vol. 62(C), pages 66-73.
    9. Pamela Coke Hamilton & Yvonne Tsikata & Emmanuel Pinto Moreira, 2009. "Accelerating Trade and Integration in the Caribbean : Policy Options for Sustained Growth, Job Creation, and Poverty Reduction," World Bank Publications - Books, The World Bank Group, number 2652.
    10. Thomas Orliac, 2012. "The economics of trade facilitation [L'économie de la facilitation des échanges]," SciencePo Working papers Main tel-03681980, HAL.
    11. Wilmsmeier Gordon & Sánchez Ricardo J., 2010. "Evolution of shipping networks: Current challenges in emerging markets," ZFW – Advances in Economic Geography, De Gruyter, vol. 54(1), pages 180-193, October.
    12. Productivity Commission, 2005. "Review of Part X of the Trade Practices Act 1974: International Liner Cargo Shipping," Inquiry Reports, Productivity Commission, Government of Australia, number 32.
    13. Paula C. Pereda & Andrea Lucchesi, 2022. "Alternative frameworks for cost-effectiveness analysis of environmental policies in maritime transport," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(3), pages 630-650, September.
    14. 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.
    15. Andrew Cassey & Katherine Schmeiser, 2013. "The agglomeration of exporters by destination," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 495-513, October.

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    More about this item

    Keywords

    maritime tranport costs; maritime industry; port efficiency; harbor management;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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