Shipping Cost Shocks and US Producer Prices: Normal versus Crisis Pass-through
September 21, 2026
Summary
Linking confidential census trade records to Bureau of Labor Statistics producer-price microdata for 6,000 US manufacturers, the authors find shipping-cost pass-through is negligible in normal times but roughly ten times larger during the pandemic, when costs rose across many routes at once.
View PaperWorking Paper 2026-13
Abstract: This paper examines how shipping costs pass through to US producer prices. We link confidential shipment-level import transactions from the Census Bureau's Longitudinal Firm Trade Transactions Database (LFTTD) to confidential firm-level producer prices from the US Bureau of Labor Statistics' Producer Price Index (PPI) microdata, constructing a monthly panel of more than 6,000 US manufacturing importers from 2005 to 2022. Using local projections and Bartik-style instruments based on route-level shipping-cost variation, we find that pass-through to producer prices is negligible in normal times but rises sharply during the COVID-19 pandemic, when shipping costs surged broadly across routes and source countries. We interpret this state dependence through a menu-cost model with imported intermediate inputs and endogenous substitution between imported and domestic inputs.
JEL classification: E31, F14, F41, L11
Key words: supply chain disruption, shipping costs, inflation, pass-through, producer prices
https://doi.org/10.29338/wp2026-13
The views expressed in this paper are solely those of the authors and should not be interpreted as reflecting the views of the Federal Reserve Banks of Atlanta and Boston, the Federal Reserve System, the US Census Bureau, or the Bureau of Labor Statistics (BLS). The Census Bureau has reviewed this data product to ensure appropriate access, use, and disclosure avoidance protection of the confidential source data used to produce this product. This research was conducted with restricted access to BLS data and was performed at a Federal Statistical Research Data Center under FSRDC Project Number 2878 (CBDRB-FY25-0470). Prepared for the Carnegie-Rochester-NYU Conference Series on Public Policy, New York, April 30–May 1, 2027.
Simon Gilchrist is with New York University's Department of Economics and the National Bureau of Economic Research. Bin Wei is in the Research Department of the Federal Reserve Bank of Atlanta. Vivian Z. Yue is with Emory University's Department of Economics, the National Bureau of Economic Research, and the Center for Economic Policy and Research. Egon Zakrajšek is with the Federal Reserve Bank of Boston and the Center for Economic Policy and Research.
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