71st International Atlantic Economic Conference

March 16 - 19, 2011 | Athens, Greece

The Uneven Effect of Maritime Transport Costs on International Trade

Saturday, 19 March 2011: 15:30
Sami Bensassi , Institute of International Economics. Universitat Jaume I. Castellón, Spain
Laura Márquez-Ramos , Institute of International Economics. Universitat Jaume I. Castellón, Spain
Inmaculada Martinez-Zarzoso , Economics, Institute of International Economics. Universitat Jaume I. Institute for Statistics and Econometrics. Göttingen Universität., Castellon, Spain
Celestino Suárez-Burguet, Ph.D , Economics, Institute of International Economics. Universitat Jaume I. Castellón. Spain, Castellon, Spain
The uneven effect of maritime transport cost on international trade

Recent trends towards regionalization and globalization have led to a decreasing role of tariff and non-tariff barriers an influencing factor on trade and a parallel increasing attention on the role of transport cost. For trade between countries that do not share a land border, the vast majority of goods are moved by ocean. Since 30 years, in the domain of maritime transport, containerization has simplified the operation at the piers, reduces the number of crewmember on ships and of stevedores at the ports. After the first oil shock in 1973, maritime transporters have adopted the less expensive fuels (bunker fuels made for the residue of the distillation of lighter fuels) to power bigger ships. In addition the tight of grip of the maritime conference system has slowly loosened the last 15 years. These multiple changes in the maritime transport industry should have lowered the price of international transport.

This paper participates to a growing economic empirical literature on the impact of transport cost and infrastructures on trade (Limao and Venables 2001; Clark et al, 2004; Martinez-Zarzoso et al 2007). We use newly released OECD international maritime transport cost database to describe the evolution of international maritime transport cost. Using a gravity equation to model international trade, we integrate international maritime transport cost instead of a distance in order to obtain a more accurate measure a transport cost. We expect to find different impacts of international maritime trade cost on trade across industries and world regions. We are particularly interested in understanding if international trade emanating from the group of countries known nowadays as BRIC (Brazil, Russia, India, and China) has benefited from a differentiated impact of international maritime transport cost than other countries.