1. Maritime Transport Costs and Trade jane.korinek@oecd.org

2. Why? • As tariffs and excess costs in production have fallen, other costs such as transport have become relatively more important • Gravity model : “workhorse” of trade flow models, uses distance as a proxy for trade costs.

3. New dataset on maritime transport costs • Most comprehensive dataset on maritime transport costs known today • Different data sources for different segments of maritime transport markets (containers, bulk industrial raw materials, bulk agricultural raw materials) • Permits calculation of • transport cost per tonne of merchandise • ad valorem equivalent

4. Why not more? • Customs data have to be collected by mode of transport and by CIF and FOB • For some countries, these data are not collected • For others, we have not had access to them • In other cases, we have incomplete information about the availability of these data

5. Shipping to and from developing countries is more expensive than OECD

6. Maritime transport costs for grains in some NFIDCs

7. Impact of MTC on trade in agriculture • A doubling of transport costs ($/T) is associated with a 33-36 % decline in agricultural trade overall • Distance is still significant • The impact of transport costs on trade is increasing over time – by 1.5 percentage points per year

8. Context: Project on Trade Costs Future work to measure and analyse impact of other trade costs: • Inland transport • Logistics and port-side services • Exchange rate volatility • Importer/exporter margins • Distribution issues

9. jane.korinek@oecd.org