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Fathoming Shipping Costs : An Exploration of Recent Literature, Data, and Patterns

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  • Ardelean,Adina Teodora
  • Lugovskyy,Volodymyr
  • Skiba,Alexandre
  • Terner,David Michael

Abstract

Recent academic research on maritime shipping has been affected by two factors: (i) changes inshipping technology and market structure and (ii) the explosion of new micro data sets in shipping andinternational trade. This paper describes this research, focusing on containerized and dry-bulk shipping andemphasizing recent trends and determinants of freight rates. The findings are presented in a systematic set of stylizedfacts. Some of the important and perhaps underappreciated insights include discussion of the scale effects ofutilizing fuel based on vessel size over different periods and comparison of different functional forms oftransportation costs: per twenty-foot equivalent, per kilo, and ad-valorem. The paper also presents several novelempirical exercises to further the insights from theexisting literature. It shows that the effect of sea distance on trade costs slowly “dies" over time, butits effect on seaborne trade volumes is both significant and persistent over time. Moreover, the paper documents thepresence of substantial country- and product-level heterogeneity of the impact of sea distance on internationalmaritime freight markets.

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  • 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.
    • Handle: RePEc:wbk:wbrwps:9992
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    References listed on IDEAS

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