Time is indeed money. That's why time—in the form of shipment delays and long transit times—has proved to be a significant trade barrier for many nations.

A report by Purdue University economist David Hummels supports that assertion. In a study titled Time as a Trade Barrier, Hummels quantifies how transit time relates to total cost.

The research buttresses logistics professionals' claims regarding the value of logistics efficiency. In effect, each day that goods are in transit adds about 0.8 percent to the cost of the goods, according to Hummels' calculations. In other words, 20 days at sea adds the equivalent of a 16-percent tariff on those goods. As a result, each additional day in transit reduces the chances that a U.S. company will source from a particular country by 1.0 to 1.5 percent.

Shippers have known for years that transit times are a major component of the total cost of goods. Shippers of high-value merchandise often use air freight rather than ocean shipping because speed offsets the higher transportation costs and minimizes the risk that goods will depreciate in value.

Hummels' study examined nearly five decades' worth of data. He concludes that the growth of air cargo and a decline in aircargo rates of about 6.0 percent annually in real terms, combined with faster ocean transit times, sharply reduced the cost and spurred the growth of international trade during that period.

The study also highlights some of the difficulties developing nations face in building export markets. "If a country does not have a good transportation infrastructure, then you don't want to spend money making time-sensitive goods," Hummels says. As for nations that don't have the trade volumes to attract frequent air or ocean service, he suggests developing regional cooperatives to build transportation scale.

Hummels' study has taken on additional importance in recent months as new security requirements threaten to delay international shipments. The study does not directly address those costs, but his analysis does suggest that such delays would carry a steep price in addition to whatever new fees shippers may have to pay for security measures.