Unraveling the impacts of freight rates on US containerized agricultural trade

We examined how the unprecedented rise in freight rates in 2021 affected US containerized agricultural trade. We considered alternative measures of trade (value, volume, container numbers), as well as product, port, and partner-country characteristics, and conducted separate analyses for exports and imports. Overall, we find that shipping costs have a substantial trade-reducing effect. On average, 10% higher shipping costs reduce US agricultural export values by 0.58% and import values by 1.72%. For exports, we find a significant negative impact for several product categories. Our results suggest that policies addressing port congestion and shipping rate issues will have heterogenous outcomes.