Chapter 2 Freight Moved in Domestic and International Trade
The American economy stretches across a continent with links to the world, drawing on natural resources and manufactured products from many locations to serve markets at home and abroad. More freight is moving greater distances as part of far-flung supply chains among distant trading partners.
In 2013 the U.S. transportation system moved a daily average of about 55 million tons of freight valued at more than $49.3 billion. After back-to-back declines in 2008 and 2009, the tonnage and value of freight moved in 2013 surpassed prerecession levels by 6.3 percent for tonnage and 6.2 percent for value.
The value of freight moved is expected to increase faster than the weight, rising from $882 per ton in 2007 to $1,377 per ton in 2040, when controlling for inflation. Exports at $1,826 per ton and imports at $1,456 per ton are higher than domestic shipments at $799 per ton in 2007. Exports and imports accounted for 10.7 percent of the tons and 19.1 percent of the value in 2007 and are forecast to make up an even greater share of freight moving throughout the United States, reaching 19.0 percent of the tons and 30.9 percent of the value by 2040.
The largest percentage of goods movement occurs close to home. Approximately 50 percent of the weight and 40 percent of the value of goods were moved less than 100 miles between origin and destination in 2007. Less than 10 percent of the weight and 18 percent of the value of goods were moved more than 1,000 miles. Distance, as used in this publication, refers to the Great Circle Distance, which is commonly called “as-the-crow-flies.”
Most goods are moved short distances (less than 250 miles), accounting for 55.7 percent of the value, 70.7 percent of the weight, and 16.7 percent of the ton-miles for all shipments within the United States in 2007. Shipments transported more than 250 miles represented less than 30 percent of the tonnage but the vast majority (83.3 percent) of the ton-miles.
Modal shares of freight vary by distance. Trucks carry the largest shares by value, tons, and ton-miles for shipments moving 750 or fewer miles, while rail is the dominant mode by tons and ton-miles for shipments moved from 750 to 2,000 miles. Air, multiple modes and mail, and other/unknown modes accounted for 51.8 percent of the value of shipments moved more than 2,000 miles.
The top 10 commodities by weight are comprised entirely of bulk products and accounted for 64.6 percent of total tons but only 16 percent of the value of goods moved in 2013. The top 10 commodities by value accounted for 58.0 percent of total value and 18.8 percent of all tons. The leading commodities by weight are bulk goods including gravel, cereal grains, and non-metallic mineral products. The leading commodities by value are high value-per-ton goods requiring more rapid delivery, including machinery, electronics, and motorized vehicles.
A handful of states are responsible for the bulk of domestic oil production. Texas was the largest oil producing state, accounting for 48.9 percent of total U.S. oil production in 2014, while North Dakota is the fastest growing oil producer. North Dakota produced 396.9 million barrels, or 12.5 percent of total U.S. oil production in 2014. California and Alaska are also major oil producing states.
Expanded U.S. oil production and changes in where oil is produced have increased the use of rail and barges to move oil from the wellhead to refineries and terminals for distribution to the final consumer. Although pipelines continue to be the predominant mode for moving oil, rail shipments have increased substantially in recent years. Regional oil shipments by rail increased from less than 1 percent in the first 6 months of 2010 to 22.6 percent in the first 6 months of 2015. Tankers and barges move crude oil on U.S. inland waterways, from port to port along the coast, or on the Great Lakes. The use of tankers and barges for oil transport has risen as well, from 2.1 percent in the first 6 months of 2010 to 3.2 percent in the first 6 months of 2015.
According to the Energy Information Administration, total oil shipments by rail, increased from 20.3 million barrels in 2010 to 383.2 million barrels, or more than 1 million barrels/day, in 2014. Rising oil production in the Bakken formation, located in North Dakota, has accounted for the majority of new rail shipments to refineries or uploading terminals. Albany, NY, is a major hub for oil shipments by rail from North Dakota because of its close proximity to east coast refineries and its links to the Midwest via rail.
Establishment of PADD
During World War II, the United States was divided into five districts to organize the rationing of gasoline and other petroleum products. Today those same regions are called Petroleum Administration for Defense Districts (PADDs). PADDs are used to analyze patterns of crude oil and petroleum product movements throughout the nation.
As measured by the Bureau of Transportation Statistics (BTS), the Commodity Flow Survey indicates that trucks moved 59.4 percent of the tonnage and 62.8 percent of the value of all hazardous materials shipped from within the United States in 2012. However, truck ton-miles of hazardous materials shipments accounted for a much smaller share, about one-third of all ton-miles, because such shipments travel relatively short distances. By contrast, rail accounted for only 4.3 percent of hazardous materials shipments by weight but 27.6 percent of ton-miles.
Flammable liquids, especially gasoline, are the predominant hazardous materials transported in the United States. In terms of ton-miles, flammable liquids account for about 66.5 percent of hazardous materials shipments. The next largest class of hazardous materials, in terms of ton-miles, is corrosive material at 12.3 percent, followed by gases at about 10.8 percent.
Local transportation is important to state commerce. Its importance is especially evident in Texas and California. In 2013, 66.8 percent of the value of domestic shipments originating in Texas was shipped to destinations within the state. In California, intrastate shipments accounted for 69.9 percent of the value. Trucks moved 58.2 percent and 78.0 percent of intrastate shipments by value in Texas and California, respectively. For all 50 states and the District of Columbia, an average of 52.8 percent of shipments stayed in-state.
The picture changes when looking at the ratio of the value of shipments destined for markets within or outside a state. A ratio greater than 1.0 indicates that a state has positive net exports of domestic trade, whereas a ratio less than 1.0 indicates that a state imports more goods from other states than it ships. North Dakota and Wyoming have the highest ratio of 2.0 or more. Both North Dakota and Wyoming have relatively small populations and are major producers of energy commodities: oil in North Dakota and coal in Wyoming. In 2013 intrastate shipments in North Dakota and Wyoming accounted for 29.7 and 26.2 percent, respectively, of total shipments originating in those states. Hawaii has the lowest ratio of interstate outbound-to- inbound shipments at 0.09 due to its unique isolated geography, while Florida and Nevada’s low ratios are partly due to demographics.
Transportation facilities that move international trade into and out of the United States demonstrate the importance of all modes and intermodal combinations to global connectivity. In 2014 the top 25 foreign-trade gateways as measured by value of shipments consist of 11 water ports, 5 land-border crossings, and 9 air gateways.
Foreign trade has had a major impact on all U.S. borders and coasts. Since 1951, the value of merchandise trade has grown by twenty-fold in inflation-adjusted terms. In 2014, ports and airports on the Atlantic Coast accounted for the largest share (27.0 percent) in terms of the value of trade.
Waterborne transportation carried nearly half (44.2 percent) of U.S. foreign trade as measured by value in 2014. Air moved 24.8 percent and truck moved 18.0 percent. By weight, 71.6 percent of tonnage was moved by water, followed by truck (10.4%), pipeline (8.0%), and rail (7.5%).
The movement of international trade goods within the United States is placing pressure on the domestic transportation network and on all modes. Trucks are the most common mode used to move imports and exports between international gateways and inland locations. This trend is expected to continue with tonnage of international trade forecast to grow at a rate of 3.4 percent per year between 2007 and 2040.
Canada is this country’s top trading partner followed by China and Mexico. China’s share of trade with the United States more than doubled between 2000 and 2014, from about 5.8 percent in 2000 to 14.9 percent in 2014.
U.S. trade with both Canada and Mexico has grown rapidly since 2000. By weight water was the most utilized mode, carrying 27.6 percent of goods, followed by truck, which carried 26.8 percent.
Trucks transport the largest share of total trade value with Canada and Mexico, followed by rail as the second largest mover of freight moving across both U.S. land borders. Pipelines also carry a large volume of imports from Canada.
In 2014, 5.4 million trucks hauled nearly 3.8 million loaded containers into the United States from Mexico, an increase of 19.6 and 60.8 percent, respectively, over 2000 levels. This traffic growth reflects a substantial rise in U.S.-Mexico trade, as shown in tables 2-9 and 2-10. In contrast, the number of incoming trucks and loaded containers from Canada declined by 17.7 and 22.3 percent, respectively, while incoming loaded rail containers increased by 29.6 percent between 2000 and 2014.