Liner shipping connectivity as determinant of trade

Abstract

Transport connectivity is a crucial determinant of bilateral exports. This paper presents an empirical assessment of the relationship between bilateral maritime liner shipping connectivity and exports in containerizable goods during the period 2006-2013. Making use of probed "gravity" type trade models, the paper incorporates new data on different measurements of maritime distance, as well as a unique new dataset and new bilateral connectivity indices developed by UNCTAD. The empirical investigations unequivocally show that lacking a direct maritime connection with a trade partner is associated with lower values of exports; any additional transshipment is associated with a 40% lower value of bilateral exports. Other indicators of liner shipping connectivity incorporated in the research take into consideration levels of competition and container vessel sizes. Results also indicate that the quality of bilateral connectivity as measured by several composite indices is a crucial determinant of bilateral exports. All empirical results suggest that in the absence of a bilateral connectivity indicator the impact of distance on bilateral exports in classical gravity models is likely to be overestimated.

Gigantism in container shipping, ports and global logistics: a time-lapse into the future

“…Bigger ships and shipping alliances reduce both the number of services (bigger ships) and the number of (independent) competitors on the route (alliances). For more information on UNCTAD's Connectivity Index, see Fugazza and Hoffmann (2017). 18 Similar observations can be made for yard operations, productivity and costs.…”

Estimating international trade status of countries from global liner shipping networks

“…there exists at least one connection between the ports of two countries), the two countries' GDP values are available, the LSBCI value between the two countries is available, and the two countries' Gb values are positive. ÃÃ [53]. The present study provides insights into understanding such influences at the country level, by focusing on the liner shipping connectivity of individual countries.…”

Urban gravity in the global container shipping network

“…Bensassi et al (2015) applied a gravity model to Spanish export data to explain the variability of maritime freight rates and quantify the impact of maritime freight rates on maritime trade. Lastly, Fugazza and Hoffmann (2017) concluded that direct maritime connections, additional transshipment, and container vessel sizes influence bilateral exports, so that "the impact of distance on bilateral exports in classical gravity models is likely to be overestimated".…”