Workshop From Sail to Steam

Abstract

The transition from sailing vessels to steamships was arguably the most consequential technological change in the history of maritime transport. This paper examines how the emergence of steamships reshaped maritime transport and trade. We identify the effect of steam on shipping times and cargo values using nearly 70,000 voyages arriving in Barcelona, one of the largest ports in the Mediterranean. Our identification strategy leverages variation across origins, months, years, ship-nationality, ship-masters, cargo types, and merchants associated with the voyage. We show that steam reduced travel times at sea by around 70%. Steam also reduced time in port and the variance of travel time, indicating widespread operation impacts. We also show that steam increased total cargo values by around 100% and the average value of goods shipped by 114%. Steam increased cargo value through several channels: greater capacity, more skilled ship-masters, and by shifting demand and supply for higher value products. Our results demonstrate how the transition to steam significantly changed shipping and trade in the first era of globalization.