The Inter-American Development Bank (BID) Research Department published a working paper titled "Determinants of Maritime Transport Costs" by Alejandro Micco and Natalia Pérez. The paper investigates the factors influencing maritime transport costs, particularly for U.S. imports. Using a large dataset of over 300,000 observations per year, the study finds that distance and containerization significantly affect shipping costs. Port efficiency is also a key determinant, with improvements in port efficiency reducing shipping costs by up to 12%. Inefficient ports increase handling costs, which are a component of shipping costs. The study also finds that port efficiency is linked to excessive regulation, organized crime, and the condition of a country's infrastructure. Private involvement in port management, when accompanied by labor reforms and reduced monopoly power, leads to efficiency and lower costs. The paper highlights the importance of transport costs in trade and growth, noting that in some cases, transport costs are more significant than tariffs. The study uses an econometric model to quantify the impact of various factors on transport costs, including distance, containerization, port efficiency, infrastructure, and regulation. The results show that port efficiency is a significant determinant of transport costs, with improvements in port efficiency leading to lower costs. The paper also discusses the role of infrastructure and regulation in port efficiency, finding that infrastructure and organized crime have significant effects. The study concludes that port efficiency is a critical factor in maritime transport costs and that improving port efficiency can significantly reduce shipping costs.The Inter-American Development Bank (BID) Research Department published a working paper titled "Determinants of Maritime Transport Costs" by Alejandro Micco and Natalia Pérez. The paper investigates the factors influencing maritime transport costs, particularly for U.S. imports. Using a large dataset of over 300,000 observations per year, the study finds that distance and containerization significantly affect shipping costs. Port efficiency is also a key determinant, with improvements in port efficiency reducing shipping costs by up to 12%. Inefficient ports increase handling costs, which are a component of shipping costs. The study also finds that port efficiency is linked to excessive regulation, organized crime, and the condition of a country's infrastructure. Private involvement in port management, when accompanied by labor reforms and reduced monopoly power, leads to efficiency and lower costs. The paper highlights the importance of transport costs in trade and growth, noting that in some cases, transport costs are more significant than tariffs. The study uses an econometric model to quantify the impact of various factors on transport costs, including distance, containerization, port efficiency, infrastructure, and regulation. The results show that port efficiency is a significant determinant of transport costs, with improvements in port efficiency leading to lower costs. The paper also discusses the role of infrastructure and regulation in port efficiency, finding that infrastructure and organized crime have significant effects. The study concludes that port efficiency is a critical factor in maritime transport costs and that improving port efficiency can significantly reduce shipping costs.