Does containerisation reduce the constraints imposed by distance in seaborne trade?

ABSTRACT

Containerisation has changed the geography of production, trade, and distribution in the global economy. Particularly, the use of containers may have reduced the constraints imposed by distance. However, this hypothesis has not been specifically addressed in the literature, arguably due to a lack of available data. This paper makes use of the European Comext database and examines if there are significant differences in the effect of distance on EU containerised and non-containerised seaborne trade flows with third countries. The empirical results support the idea that containerization reduces the effect of distance on seaborne trade. The estimates of distance elasticity for containerised seaborne trade flows are smaller than those for non-containerised ones, both at the aggregate and sectoral levels. The container may bring remote and less developed countries closer to the central nodes of the world economy.

KEYWORDS:

• Containerisation
• seaborne trade
• distance
• containerised trade flows
• non-containerised trade flows

Acknowledgments

The author would like to thank the Associate Editor and two anonymous reviewers for their excellent comments and suggestions that substantially improved the paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. See https://data.bts.gov/stories/s/International-Freight-Gateways/4s7k-yxvu.[Accessed 20/7/2022].

2. See https://ec.europa.eu/eurostat/statistics-explained/index.php/International_trade_in_goods_by_mode_of_transport#Trade_by_mode_of_transport_in_value_and_quantity. [Accessed 20/7/2022].

3. See https://ec.europa.eu/eurostat/web/international-trade-in-goods/data/focus-on-comext [Accessed 20/7/22]. Comext database is available at https://ec.europa.eu/eurostat/data/bulkdownload. [Accessed 20/7/22].

4. See https://www.usitc.gov/data/gravity/dgd.htm. [Accessed 20/7/22].

5. The information about container usage for Croatia trade flows is missing for the first three years of the sample, so this EU reporting country is excluded from the sample. The 183 ROW countries included in the sample have at least one non-zero export and import seaborne flow with the EU in the sample period 2010 to 2019 and have data on sea distance.

Additional information

Funding

This work was supported by the Spanish Ministry of Science and Innovation (MCIN/AEI//10.13039/501100011033) under Grant PID2020-115183RB-C21.