Working Paper
Shipping Cost Shocks and US Producer Prices: Normal versus Crisis Pass-through
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;
https://doi.org/10.29338/wp2026-13
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Bibliographic Information
Provider: Federal Reserve Bank of Atlanta
Part of Series: FRB Atlanta Working Paper
Publication Date: 2026-09-21
Number: 2026-13