Transshipment in the United States

Abstract

Data representing transshipment or re-exports are almost always excluded from analytical portrayals of international trade, yet transshipment is potentially an important phenomenon in understanding a number of economic questions, and is increasing in importance. Rapid technological change in areas such as containerization and hub-and-spoke routing has promoted the practice of transshipment. While there are significant gaps in the data, the share of re-exports in global exports has undoubtedly increased rapidly, from perhaps 1 in 20 in the mid- 1980s to perhaps 1 in 6 today. Econometric analysis of U.S. domestic exports and foreign exports (re-exports) over pairs of U.S. ports and destinations suggests that re-exports are significantly more sensitive than domestic exports to factors influencing transaction costs, including distance, containerization, price-fixing liner agreements, and port efficiency and restrictive port policies in the importing country.