Shipping to America

Xiwen Bai, Jesus Fernandez-Villaverde, Ricardo Marto, Yiliang Li and Francesco Zanetti

No 12998, CESifo Working Paper Series from CESifo

Abstract: We study the macroeconomic and trade-policy implications of disruptions to U.S.-bound shipping routes. Standard models treat them as iceberg-cost shocks, conflating the shock with the response to it. Using satellite vessel-tracking data, we construct route-level measures of potential and effective capacity for all U.S.-bound container ships from 2016 to 2025. Uti-lization losses in recent disruptions ran 20 to 40 percentage points, and began months before port congestion became visible. We embed these measures in a general equilibrium model in which firms reallocate a common fleet without internalizing the congestion they create and price above marginal cost, while importers’ sourcing responds to route profitability. The reallocation triggered by a disruption then has first-order welfare effects, and the route’s Do-mar weight is not a sufficient statistic for its welfare cost. The 2021 West Coast crisis and the 2023–2024 Red Sea attacks cost 0.69% and 0.35% of output. Naval protection of Red Sea shipping generated benefits of 0.04–0.08% of output at a fiscal cost of 0.02%. Tariffs decongest the routes they tax, offsetting or even reversing their conventional welfare cost.

Keywords: AIS; shipping disruptions; shipping capacity; maritime transportation; general equilibrium; supply chains; trade policy (search for similar items in EconPapers)
JEL-codes: E23 F12 L91 R40 (search for similar items in EconPapers)
Date: 2026
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Related works:
Working Paper: Shipping to America (2026)
Working Paper: Shipping to America (2026)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12998

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