Port Efficiency and Trade Flows*

TLDR

International trade growth and congestion highlight the need for trade facilitation, yet comprehensive data on port efficiency and its impact on trade remain scarce. The study develops a simple method to estimate port efficiency. The method analyzes detailed US import and cost data to produce port‑, product‑, and time‑specific efficiency estimates. In a gravity model, higher port efficiency is estimated to significantly boost trade volumes.

Abstract

Abstract Growing international trade and increasing congestion focus attention on trade facilitation. Ocean ports are a central and necessary component in facilitating trade. Yet, there is only limited comprehensive information available on the efficiency of ports or evidence of the effect of port efficiency on trade. We develop and apply a straightforward approach to estimate port efficiency. The approach uses detailed data on US imports and associated import costs, yielding estimates across ports, products, and time. These measures are incorporated into a gravity trade model where we estimate that improved port efficiency significantly increases trade volumes.