Interpreting the role of expanding transport in overall production growth in the

nineteenth century is still hampered by our lack of understanding of how much

and when ocean shipping costs began to fall. This paper exploits new output and

freight rate data for one of the world’s largest merchant fleets, the Norwegian,

1830–66. We argue that the price of an average shipped ton-mile was subject to

three sources of returns to scale. We test for the impact of a changing composition

of produced output (the ‘composition effect’) to account for economies of

scope and offer an alternative index for the price of the average ton-mile that

shows a strongly falling trend for the entire period. We then turn to the effect

that increasing maturity of new routes had on prices, thus analysing returns to

an increased network density finding strong evidence for their existence. Finally,

we investigate the importance of internal scale economies in firm and ship

size based on a cost survey conducted in 1867–70.


JEL classification: N70, F02, R40