Chapter 5.pdf

This chapter provides an overview of the contribution of the manufacturing sector to the economy and the use of transportation by the sector. The manufacturing sector consists of establishments engaging in the mechanical, physical, or chemical transformation of materials, substance, or components into new products. Establishments performing these activities typically are plants, factories, or mills.¹

In absolute dollars, the sector uses the third largest amount of transportation services. Per dollar of output, the manufacturing sector requires slightly more transportation services than most other sectors. The sector relies heavily on truck transportation services, shipping the most tons and largest value of product by truck, and employing more in motor vehicle occupations than any other transportation occupation. The sector uses more for-hire truck transportation services than in-house truck operations.

Table 5-1

In 2015 the manufacturing sector was the fourth largest contributor to the national economy next to the financial services sector (the largest contributor), the government sector (the second largest contributor), and the professional and business services sector (the third largest contributor). The manufacturing sector contributed $2,167.8 billion (12.1 percent) to the national economy, as measured by Gross Domestic Product (GDP) (figure 5-1). The manufacturing sector contributes to the economy by combining raw materials (many produced by other sectors) to make finished products. The manufacturing sector, for example, makes bread from the wheat that the natural resources and mining sector produces.

The upper mid-west (Illinois, Ohio, Indiana, and Michigan), known for manufacturing, contributed significantly to national manufacturing activity in 2015. The largest amount of manufacturing activity, however, occurred in California ($278.6 billion), followed by Texas ($227.5 billion), Ohio ($108.1 billion), Illinois ($103.8 billion), North Carolina ($100.1 billion), Indiana ($100.0 billion), and Michigan ($92.5 billion) – each of which accounted for four percent or more of national activity in the manufacturing sector (figure 5-2, table 5-2).

Computing the percent of manufacturing sector activity as a percent of a Gross State Product (GSP), rather than as a share of GDP, also provides useful insights to U.S. production. Nationally, California, Texas, and Ohio produced the most manufactured products in 2015. However, manufacturing activity accounted for only a modest share of economic activity (18.0 percent or less), as measured by GSP, within California, Texas, and Ohio. In contrast, manufacturing accounted for a relatively large share of GSP in Indiana (29.7 percent), Oregon (23.0 percent), Louisiana (21.7 percent), and North Carolina (20.0 percent). (see Appendix A)

The manufacturing sector was the third largest user of transportation services in 2014 ($223.9 billion). The manufacturing sector relies heavily on for-hire transportation services – using more for-hire air, rail, truck, and water transportation services ($137.7 billion) than in-house transportation operations ($62.5 billion) (figure 5-3).

The manufacturing sector used $223.9 billion of transportation services in 2014 (figure 5-3). In 2014 the sector used:

• primarily truck transportation services (e.g., used to haul raw materials like wood and cotton to manufacturing plants), which accounted for 63.3 percent ($141,843 million) of all transportation services used by the sector.
• slightly more for-hire truck transportation services ($81,044 million) than in-house truck transportation operations ($60,799 million).
• air, rail, and water transportation services (e.g., for hauling coal to steel forgeries) summing to 26.1 percent ($58,368 million) of all the transportation services used by the sector. Nearly all air, rail, and water transportation services used were for-hire (25.3 percent, or $56,690 million).
• other transportation (pipeline transportation, passenger and ground transportation, and transportation support activities such as freight loading) totaling 6.4 percent ($14,263 million) of all transportation services used by the sector (figure 5-4).

The manufacturing sector required marginally more transportation services in producing output than the average sector, albeit substantially less transportation services than the sector depending the most on transportation in 2014. In 2014 the manufacturing sector required 3.7¢ worth of transportation services to produce one dollar of output, while the most dependent sector (wholesale and retail trade) required 9.9¢ worth of transportation services to produce one dollar of output. The manufacturing sector relied more on for-hire transportation services than in-house transportation operations, requiring 2.7¢ worth of for-hire transportation services to produce one dollar of output and 1.0¢ worth of in-house transportation operations to produce one dollar of output (figure 5-5).

The overall transportation requirement for the manufacturing sector (3.7¢) is relatively modest compared to other inputs. In 2014 transportation services were the fifth most important input, while manufactured products (e.g., nails, screws, etc.) were the most important input. The manufacturing sector requiring 33.8¢ worth of manufactured products to produce one dollar of output (figure 5-6).

In 2015 the manufacturing sector employed nearly one million transportation and material moving workers, accounting for 7.9 percent of its entire work force. The sector employed more material moving workers (727,150) than transportation workers (about 238,920) ² (figure 5-7). Transportation workers include motor vehicle operators, ship engineers, aircraft pilots and flight engineers, etc. Material moving workers support transportation activities and include occupations such as cleaners of vehicles and ship loaders.

Transportation and material moving workers in the manufacturing sector earned a median wage of $30,250 in 2015, while workers of all occupations in the manufacturing sector earned a higher median wage ($38,710) (figure 5-8).

The manufacturing sector employed the largest number of transportation workers as heavy and tractor-trailer truck drivers (131,160), followed by light truck or delivery services drivers (47,330) and driver/sales workers (18,320). Heavy and tractor-trailer truck drivers earned the highest median wage ($38,050) among these three types of motor vehicle operators but earned slightly less than the sector median wage. Driver/sales workers earned a median wage of $32,210, while light truck or delivery services drivers earned a lower median wage ($29,250) (figure 5-8).

The 2002 Vehicle Inventory and Use Survey (VIUS) is the most recent survey of vehicle ownership and use by industry. According to the 2002 VIUS, the manufacturing industry operated, at 0.8 million, fewer trucks than most other industries and accumulated fewer miles (15.4 billion) (figure 5-9).

The 2012 Commodity Flow Survey shows that the manufacturing industry shipped 4.2 billion tons of raw materials and finished goods domestically, valued at $5.7 trillion, and accounting for 1.3 trillion ton-miles. Trucking was the dominant mode. Trucks carried 67.5 percent of the tonnage shipped by the manufacturing industry, 66.9 percent of the value, and accounted for 54.2 percent of ton-miles. The manufacturing industry, however, tended to use modes other than truck to ship goods long distances. The average shipment distance was shorter by truck (399 miles per shipment) than by all other modes, and longest by air (1,276 miles per shipment) (figure 5-10).