Determinants of maritime transport costs
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Determinants of maritime transport costs

  • 2002-04-01

Filetype[PDF-199.14 KB]


  • English

  • Details:

    • Resource Type:
    • NTL Classification:
      NTL-MARINE/WATERWAYS TRANSPORTATION-Ports ; NTL-MARINE/WATERWAYS TRANSPORTATION-Marine Economics and Finance ;
    • 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 determinants of shipping costs to the U.S. were investigated using 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. Distance and containerization matter. The efficiency of ports is an important determinant of shipping costs. Improving port efficiency from the 25th to the 75th percentile reduces shipping costs by 12 percent. (Bad ports are equivalent to being 60 percent farther away from markets for the average country.) Inefficient ports also increase handling costs, which are one of the components of shipping costs. This paper tries to explain variations in port efficiency and finds that they are linked to excessive regulation, the prevalence of organized crime, and the general condition of the country's infrastructure. A number of success stories in Latin America are presented 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. Appendices, figures, tables, 49 p.
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