Chile, the world’s second-largest salmon producer, is geographically remote from its main consumer markets, creating significant logistical challenges for exporting its highly perishable products. This paper examines how the Chilean salmon industry has overcome these challenges to establish a globally competitive export sector. Using highly disaggregated customs data from 2002 to 2024 and an augmented gravity model, we analyze how exporters adapt to trade costs and respond to major shocks. Our findings reveal a two-pronged strategy. First, exporters employ sophisticated logistical adaptation, segmenting export pathways by tailoring product forms (fresh vs. frozen) and transport modes (air, sea, land) to specific destination markets. In markets with high air-freight costs, we observe a compositional shift away from fresh products and an increase in the size of frozen shipments, rather than classic consolidation. Second, the industry demonstrates portfolio resilience in response to crises. During major disruptions, such as the 2007-2010 Infectious Salmon Anemia (ISA) virus outbreak and the 2014 Russian embargo on Norwegian seafood, Chilean exporters reweighted their portfolios by redirecting products to alternative markets, i.e., fresh salmon to Brazil and frozen salmon to Russia, rather than exiting the market. This combination of logistical segmentation and resilient trade reallocation explains how Chile’s salmon industry has thrived despite the tyranny of distance.
Keywords: Seafood, aquaculture, trade margins, customs data, augmented gravity model, Chile JEL Codes: F10, F14, Q22, Q27.