Do Caribbean exporters pay higher freight costs?

The objective of this study is to analyze transportation costs incurred by Caribbean countries on their major export products to determine whether there is evidence of freight rate discrimination against these countries, or whether their transport costs are significantly different from those of other exporters. A key finding is that a distinction must be made between freight rates for air cargo services as opposed to ocean transport. For exports by ocean carriers the empirical evidence is quite different than that for air shipments. This study also finds that Caribbean exporters are more likely to experience adverse transport costs on food and agricultural raw materials than they are on manufactured goods where a relatively high percentage of shipments are by air. The report also suggests the following lines of analysis: how the Caribbean countries might best exploit the major cost advantage they have for products exported by air, why is ocean transport less cost efficient than air freight for Caribbean countries, and why do large adverse transport cost differentials appear to be concentrated in certain product groups like food and agricultural raw materials?