The delayed impact of containers on U.S. international trade growth

Abstract

Containers are commonly thought to be important for international trade but the evidence is thin. I argue that containers were important to U.S. trade expansion but not when they were first adopted. Using previously unused data, I show that U.S. aggregate freight factors did not fall when containers were first adopted. It took a decade before containerised freight rates fell. Falling freight rates matter for trade growth, accounting for 36 percent of the increase in U.S. import share of output from 1972 to 1987 when the impact of containers began to be felt. Institutional factors in port industry delayed containers' significant labour cost savings. Compensation deals to longshoremen kept labour costs up despite rapidly increasing labour productivity in ports.