The Box - Marc Levinson [153]
6. Several factors make freight-cost data particularly treacherous. Average costs are greatly affected by the mix of cargo; the now defunct ICC used to report the average cost per ton-mile of rail freight, but year-to-year changes in the average depended mainly upon demand for coal, which traveled at much lower rates per ton than manufactured goods. Second, most historical cost information concerns a single aspect of the process—the ocean voyage between two ports—rather than the total door-to-door cost of a shipment. Third, a proper measure of freight costs over time would have to account for changes in service quality, such as faster ocean transit and reduced cargo theft, and no freight cost index does this. Fourth, a large number of freight shipments occur either within a large company or at prices privately negotiated between the shipper and transportation carriers, so the information required to measure costs economywide often is not publicly available. Edward L. Glaeser and Janet E. Kohlhase, “Cities, Regions, and the Decline of Transport Costs,” Working Paper 9886, NBER, July 2003, p. 4.
7. U.S. Congress, Joint Economic Committee, Discriminatory Ocean Freight Rates and the Balance of Payments, November 19, 1963 (Washington, DC, 1964), p. 333; John L. Eyre, “Shipping Containers in the Americas,” in Pan American Union, “Recent Developments in the Use and Handling of Unitized Cargoes” (Washington, DC, 1964), pp. 38–42. Eyre’s data were developed by the American Association of Port Authorities.
8. Estimate of freight rates reaching 25 percent of value is in Douglas C. MacMillan and T. B. Westfall, “Competitive General Cargo Ships,” Transactions of the Society of Naval Architects and Marine Engineers 68 (1970): 843. Ocean freight rates for pipe and refrigerators are in Joint Economic Committee, Discriminatory Ocean Freight Rates, p. 342. Trade shares are taken from U.S. Bureau of the Census, Historical Statistics of the United States(Washington, DC, 1975), p. 887.
9. Eyre, “Shipping Containers in the Americas,” p. 40.
10. Paul Krugman, “Growing World Trade: Causes and Consequences,” Brookings Papers in Economic Activity 1995, no. 1 (1995): 341; World Trade Organization, World Trade Report 2004 (Geneva, 2005), pp. 114–129.
11. Robert Greenhalgh Albion, The Rise of New York Port (New York, 1939; reprint, 1971), pp. 145–146; Peter L. Bernstein, Wedding of the Waters: The Erie Canal and the Making of a Great Nation (New York, 2005); Douglass North, “Ocean Freight Rates and Economic Development 1750 1913,” Journal of Economic History 18 (1958): 537–555. W. W. Rostow, among many others, argues that railroads were essential to the “take off” of U.S. growth in the 1840s and 1850s; see his Stages of Economic Growth (Cambridge, UK, 1960), pp. 38–55. Alfred D. Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, MA, 1977), also assigns a critical role to railroads, although for very different reasons. Robert William Fogel, Railroads and American Economic Growth (Baltimore, 1964), rejects the Rostow view, asserting that “the railroad did not make an overwhelming contribution to the productive potential of the economy,” p. 235. Albert Fishlow also rejects Rostow’s claim that railroad construction was essential in stimulating American manufacturing, but contends that cheaper freight transportation had important effects on agriculture and led to a reorientation of regional economic relationships; see American Railroads and the Transformation of the Ante-Bellum Economy (Cambridge, MA, 1965) as well as “Antebellum Regional Trade Reconsidered,” American Economic Review (1965 supplement): 352–364. On the role of railroads in Chicago’s rise, see William Cronon, Nature’s Metropolis: Chicago and the Great West (New York, 1991), and Mary Yeager Kujovich,