The Price of Delay: Supply Disruptions, Product Availability, and Strategic Pricing during the Pandemic
June 25, 2026
Summary
During 2020–23, firms did not just face higher costs but faced an unusually tight constraint on product availability. Imports often did not arrive when expected, and port congestion and vessel delays made replenishment unusually uncertain. In Baslandze and Fuchs (2026), we study how these disruptions showed up in consumer prices using newly linked micro data that match shipment-level bills of lading to high-frequency consumer transaction prices. The evidence points to sizable pass-through from delivery shortfalls to prices, above and beyond the standard pass-through of costs. Prices also rise when competitors experience shortfalls, consistent with scarcity weakening competitive pressure inside product markets. We use the estimates in an accounting exercise to calculate the direct and spillover price responses implied by widespread disruptions.
View PaperPolicy Hub 2026-4
Key findings:
- Delays and higher import and freight costs pass through to consumer prices. In our preferred specification, the delivery shortfall-to-consumer price pass-through is about 0.25—similar to the pass-through estimates of import and freight costs.
- Competitor disruptions matter. A firm's prices respond to competitors' delivery shortfalls with an elasticity around 0.10–0.12.
- Spillovers extend beyond direct import exposure. Even nonimporters raise prices when importing competitors are constrained.
- Persistence amplifies pricing responses. Pass-through grows when shortfalls are measured over longer windows, consistent with firms repricing more aggressively once disruptions appear sustained.
Center Affiliation: Center for Quantitative Economic Research
JEL classification: E31, L11, L16, F14
Key words: supply chains, inflation, delivery delays, strategic interactions, pass-through
Digital Object Identifier (DOI): https://doi.org/10.29338/ph2026-04