From Port Delays to Price Hikes: How Shipping Congestion Fueled US Inflation

A new study by researchers from the IMF, Singapore Management University, and the University of Michigan finds that pandemic-era shipping delays at US ports significantly pushed up consumer inflation. A 100-hour increase in shipping time raised inflation measurably, with effects peaking about five months after congestion shocks.

When container ships lined up outside major US ports during the pandemic, the images became symbols of a broken global supply chain. But what did those delays actually mean for ordinary consumers? A new study by researchers from the International Monetary Fund, Singapore Management University, and the University of Michigan finds that port congestion did more than disrupt deliveries. It pushed up inflation across the United States.

The research, led by Yang Jiao, Ting Lan, Yang Liu, and Xinrui Zhou, shows that shipping delays during the COVID-19 crisis had a clear and measurable impact on consumer prices. Their findings help explain how traffic jams at distant ports translated into higher costs at grocery stores, clothing outlets, and electronics shops.

Measuring the Traffic Jam at Sea

To understand the scale of the disruption, the researchers built a new measure of shipping delays. They used global vessel tracking data from the Automatic Identification System, which records the movements of cargo ships worldwide. By tracking ships arriving at 93 US mainland ports between 2017 and mid-2023, they calculated how long voyages actually took.

Before the pandemic, ships arriving at West Coast ports typically spent about 400 hours in transit. At the height of congestion in early 2022, that number rose to nearly 700 hours. Southern ports experienced smaller increases, while Northeastern ports were less affected. Even among large ports, the timing varied. Some faced severe congestion in mid-2021, and others peaked in early 2022.

This detailed tracking allowed the researchers to measure delays not just in cost terms, but in time. That distinction proved crucial.

Not All Products Were Equally Exposed

Different goods enter the United States through different ports. Footwear and headgear, for example, are heavily routed through West Coast ports, especially Los Angeles. Textile products, on the other hand, arrive through a mix of ports including Los Angeles, Newark, Savannah, Long Beach, and Charleston.

This variation created an opportunity. Products that relied heavily on congested ports were more exposed to shipping delays than others. By combining shipping data with detailed import records and item-level price data from the Bureau of Labor Statistics, the researchers could compare how prices changed across different categories of goods.

They used pre-pandemic trade patterns to calculate how much each product depended on specific ports. This approach ensured that their results were not distorted by companies rerouting shipments during the crisis.

The Link to Rising Inflation

During the same period that shipping times surged, US inflation climbed sharply. Consumer price inflation for goods excluding automobiles peaked at around 15 percent in mid-2022. Import price inflation, however, rose much less. Shipping and insurance costs also increased only slightly as a share of import value.

The key question was whether the delays themselves contributed to higher prices.

The answer appears to be yes. The study finds that a 100-hour increase in shipping time raised consumer goods inflation by about 1.2 percentage points on average. The results remained strong even after accounting for other factors such as fiscal stimulus and trade tariffs.

In simple terms, when ships took longer to arrive, prices tended to rise more.

Why Delays Matter More Than Fees

One striking finding is that the inflationary effect did not happen immediately. Instead, it built gradually. The researchers show that the impact of shipping delays peaked about five months after the congestion shock. At its highest point, a 100-hour delay increased inflation by roughly 0.5 percentage points before slowly fading.

This pattern suggests that time delays can disrupt supply chains in ways that go beyond direct transport costs. When goods arrive late, retailers may face shortages. Inventories shrink. Businesses may rush to restock at higher prices. These pressures can feed into consumer prices even if official shipping fees rise only modestly.

The study highlights a simple but powerful lesson. In today’s interconnected economy, efficiency and timing are critical. Port congestion during the pandemic was not just a logistical problem. It became an inflationary force, showing how disruptions in one part of the global system can ripple through to households months later.

As governments and businesses look to strengthen supply chains, the message is clear. Reducing bottlenecks and improving resilience may not just smooth trade flows. It could also help stabilize prices when the next global shock hits.