Sellers Per Shipment (SPS) Explorer

What is Sellers Per Shipment?

Sellers Per Shipment (SPS) is a measure developed by economists Sebastian Heise, Justin Pierce, Georg Schaur, and Peter Schott to characterize how US companies organize their global supply chains. For a given importer, product, country of origin, and shipping mode, SPS is simply the ratio of distinct foreign exporters to total shipments over a time period. A ratio close to zero means the importer relies on a tight circle of loyal suppliers. A ratio approaching one means a different supplier appears on nearly every shipment.

The research behind this measure

In their paper “Tariff Rate Uncertainty and the Structure of Supply Chains” (NBER Working Paper 32138, 2024), Heise, Pierce, Schaur, and Schott identify two fundamentally different ways US companies source goods from abroad.

The first they call the Japanese system, named for the procurement practices pioneered by firms like Toyota. Under this system, a buyer commits to one or a small number of foreign suppliers over a long-term relationship, accepts smaller and more frequent deliveries, and pays a slight price premium. That premium is not inefficiency: it is an incentive for the supplier to maintain quality without needing costly inspections on every shipment. The relationship itself is the quality guarantee.

The second they call the American system. Here the buyer goes to whoever is cheapest right now, places larger, less frequent orders, rotates among many suppliers, and relies on inspections to catch defects. It is a pure spot market.

Neither system is universally better. The Japanese system is leaner and produces higher-quality inputs, but it only works when the buyer-supplier relationship can be expected to continue. That expectation depends heavily on trade policy stability. When the threat of a trade war looms, suppliers become reluctant to enter long-term commitments, because a tariff escalation could sever the relationship before they recover the quality premium they invested in earning. The result: uncertainty pushes companies toward spot-market sourcing even when relational procurement would be more efficient.

The authors test this mechanism using China’s accession to Permanent Normal Trade Relations (PNTR) with the United States in 2001, which eliminated the annual congressional vote that had kept the threat of a sudden tariff spike alive. Products with greater exposure to that threat saw the clearest shift: after PNTR, US importers buying from China moved toward smaller, more frequent shipments from fewer suppliers, the hallmarks of the Japanese system. The research estimates that eliminating relational procurement entirely would reduce US welfare roughly one-third as much as cutting off all trade.

The 2025 US tariff escalation is the mirror image of that experiment. This page lets you see, in the underlying shipment data, whether long-term importer-supplier relationships survived that shock, or whether companies retreated to the spot market.

Full citation

Heise, S., Pierce, J.R., Schaur, G., & Schott, P.K. (2024). Tariff Rate Uncertainty and the Structure of Supply Chains. NBER Working Paper No. 32138. https://doi.org/10.3386/w32138