{
  "id": 10748962,
  "title": "Shipping to America",
  "url": "https://urgent.news/2026/09/29/shipping-to-america",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-29T17:53:09.000Z",
  "source": {
    "name": "Marginal Revolution",
    "slug": "marginal-revolution",
    "url": "https://marginalrevolution.com/marginalrevolution/2026/09/shipping-to-america.html"
  },
  "original_language": "en",
  "account": "The fragility of shipping routes entering the United States has long been overlooked, which may be to our advantage. Researchers examine the broader economic and trade policy consequences of potential hindrances to shipping en route to the U.S. Traditionally, economic models treat disruptions as equivalent to \"iceberg-cost\" shocks, failing to distinguish between the disruption itself and the subsequent response. By applying satellite data to track vessels, researchers have developed a method to estimate both the theoretical and actual capacity of each route used by container ships headed to the U.S. from 2016 to 2025.\n\nDuring previous shipping disruptions, utilization losses ranged between 20 to 40 percent, initiating well before port congestion became apparent. These findings have been integrated into a macroeconomic model, where firms increase production without taking into account the congestion they induce, and importers adjust their sourcing based on the profitability of different routes. The adjustments made due to disruptions have immediate effects on overall welfare, and the significance of a route's weight in the Domar model does not accurately reflect its impact on welfare costs.\n\nIn 2021, the crisis on the West Coast and the attacks in the Red Sea in 2023-2024 resulted in a loss equivalent to 0.69 percent of the country's total output, while the latter experienced a smaller impact of 0.35 percent. Naval protection of Red Sea shipping routes was found to provide benefits ranging between 0.04 to 0.08 percent of the output, but at a fiscal cost of 0.02 percent. Interestingly, imposing tariffs on troubled routes can alleviate congestion, potentially offsetting or even reversing the usual welfare cost associated with these trade restrictions.",
  "summary": "The vulnerability of our shipping routes remains underdiscussed, perhaps that is in some ways a good thing: We study the macroeconomic and trade-policy implications of disruptions to U.S.-bound shipping routes. Standard models treat them as iceberg-cost shocks, conflating the shock with the response to it. Using satellite vessel-tracking data, we construct route-level measures of potential […]…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}