St. Louis Fed, Report: Shipping Prices and Import Price Inflation

“In this article, we investigate the relationship between shipping costs and import price inflation, especially during the COVID-19 pandemic. To examine pass-through, we create a dataset combining shipping cost data by country with information on import prices by commodity type and on import volumes by country and commodity type. After creating our measure of shipping cost exposure for different types of goods, we measure the pass-through of shipping costs to import price inflation over time. While the overall impact of shipping costs on import price inflation is modest, the overall growth in shipping costs has been so large that between 3.6 and 5.87 percentage points of import price inflation can be attributed to it. Additionally, product types with greater shares shipped by sea experience a stronger impact of shipping costs than those with a smaller share shipped by sea. Additionally, in 2021, pass-through was larger than in the period from 2010 to 2019, with differential impacts across different good types. Within different broad categories of goods, the impact of shipping costs tends to be larger for more perishable goods. Thus, recent spikes in import prices can be partially, but not entirely, attributed to the rise in shipping costs during the pandemic.”