The Price of Delay: Supply Chain Disruptions and Pricing Dynamics

We study how supply chain disruptions shape consumer prices. We develop a simple model showing how disruptions that cause delivery delays affect pricing through product availability, beyond standard cost pass-through, and extend it to include strategic interactions across firms. Empirically, we construct a novel micro-level dataset linking shipment-level U.S. import records from Bills of Lading to granular consumer prices from the Numerator panel. Using delivery shortfalls, port congestion, and import costs in a shift–share identification strategy, we estimate the pass-through of supply chain shocks to retail prices. We find sizable but incomplete pass-through: both imported-input cost shocks and delivery delays raise prices, with stronger responses when disruptions persist. Firms also raise prices when competitors face disruptions—including those that do not import directly—indicating strategic pricing spillovers. Combining these estimates with back-of-the-envelope calculations, we show such interactions substantially amplify aggregate price effects, particularly through product availability, during the pandemic.