Transshipment Hubs, Trade, and Supply Chains

Anh Do, Sharat Ganapati, Woan Foong Wong and Oren Ziv

No 20731, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The majority of global trade moves by sea through hub-and-spoke shipping networks. We investigate the returns to being a hub country by analyzing how transshipment activity shapes trade and supply chains. We show that most US imports especially from smaller origin countries are transshipped via key hubs, and transshipment is positively correlated with the hubs product-level trade. Leveraging the indirect shipping network structure to construct an instrument, we find that transshipment increases hubs imports from origins for which they facilitate trade and exports of downstream goods, highlighting their central role in shaping modern global trade and supply chain dynamics.

Keywords: Trade costs; Scale economies; Hubs; Transport costs; Transport networks; International trade; Shipping (search for similar items in EconPapers)
JEL-codes: F10 F13 F14 (search for similar items in EconPapers)
Date: 2025-10
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