What is a day of shipping time worth?
Time as a Trade Barrier
David L. Hummels, Georg Schaur (2013) · American Economic Review 103(7)
Article ↗ · Replication data ↗ (openICPSR)
The archive requires an account we do not hold, so the files were not opened. What follows rests on the published abstract and on this platform's own observations.
What the authors found
Hummels and Schaur model the exporter's choice between fast expensive air freight and slow cheap ocean freight, and use US import data to back out what firms will pay to avoid delay. Each day in transit is equivalent to an ad valorem tariff of 0.6 to 2.1 per cent. The most time-sensitive flows are parts and components — precisely the goods that move inside production networks, where a delay stops a factory rather than a shelf.
What our data adds
If a day is worth up to 2.1 per cent, the chokepoints that add days are worth watching, and this database tracks them daily through IMF PortWatch. The Suez Canal, the Panama Canal, the Strait of Hormuz, the Bab el-Mandeb and the Strait of Malacca are all carried here as daily transit and capacity series. A diversion around the Cape of Good Hope instead of through Suez adds roughly ten to fourteen days on the Asia-Europe run, which by this paper's estimate is a tariff equivalent of between six and thirty per cent — imposed by geography and insurance rather than by policy.
| Figure | Value | Indicator |
|---|---|---|
| Tariff equivalent of one day in transit (Hummels & Schaur) | 0.6-2.1% | capacity |
| Chokepoints tracked daily in this database | 5+ | capacity |
Every figure here is computed from observations in this database and can be charted, downloaded or queried.
What this cannot show
The tariff-equivalent arithmetic is ours applied to their coefficient, not a result either produced: the paper estimates the value of a day for US imports in a particular period, and multiplying it by a diversion length assumes that estimate transfers to a different route, a different decade and a different cargo mix. Our chokepoint series counts vessels and capacity, not delay, so it can show that traffic moved but not what the movement cost. Treat the range as an order of magnitude.
Related notes
- When a country exports, how much of the value was actually made there — and how far does the usual export statistic mislead us?
- Who actually paid for the 2018 US tariffs, and what did they do to the pattern of trade?
- When two countries trade with each other and neither is the United States, whose currency is the price in?