In 2011 the freight transportation system served 7.4 million business establishments, 118.7 million households, and more than 89,000 government units [USDOC CENSUS SUSB, 2013, and GOVS]. In recent years the freight transportation network has handled growth in domestic freight and increasing amounts of international freight shipments in response to large increases in U.S.-international trade. Not only has the network had to adapt to handle international traffic, but the growth in international freight has also had an effect on the way domestic freight moves. All of these changes in the freight network have created new challenges for the commercial and industrial sector as well as affected communities and managers of publicly owned infrastructure.

Weight and Value

The U.S. freight transportation system moved more than 19.7 billion tons of goods valued at $17.4 trillion in 2012, according to estimates derived from the Freight Analysis Framework (FAF) (table 4-1). This means the freight transportation system carried, on average, about 53.9 million tons of goods worth more than $47.5 billion each day. This amounts to about 62.6 tons of freight per capita per year in the United States. See box 4-A for information about the FAF and the Commodity Flow Survey.

During the recession, freight transportation saw large decreases in tonnage in 2008 and 2009. However, by 2011 the economy had started to recover, and freight tonnage reached 93.3 percent of the 2007 levels. FAF paints a similar picture for the value of freight shipments, which decreased in 2008 and 2009 before increasing in 2011 to 100.9 percent of the estimated value for 2007 (in 2007 dollars). Table 4-1 shows that the weight and value of freight in 2012 surpassed prerecession levels in all categories (except import tonnage). FAF forecasts that freight weight will grow 1.3 percent annually between 2012 and 2040. The value of goods moved, in real dollars, is expected to increase faster than tonnage and more than double during this time as the value of goods increases [USDOT FHWA BTS 2014]. U.S. exports and imports accounted for 10.9 percent of the weight and 19.7 percent of the value of freight transported throughout the United States in 2012. FAF forecasts that U.S. exports and imports will account for an even greater share of freight movements in 2040, reaching 19.0 percent of the weight and 30.9 percent of the value of goods shipped throughout the country [USDOT FHWA BTS 2014].

Population growth and economic activity are the primary factors that determine freight demand. As population increases or economic activity expands, more goods are produced and used, resulting in additional freight movement. Between 2007 and 2012, the U.S. population increased by 4.2 percent [USDOC CENSUS 2013], and U.S. gross domestic product grew 11.6 percent in terms of current dollars [USDOC BEA 2014]. In addition, changes in the composition of goods demanded had an effect on what goods were moved, what modes were used to transport them, and where they were shipped. Freight traffic, which fluctuates with economic activity, increased in 2013. Freight carried by the for-hire transportation industry rose as the economy rebounded from the past recession. According to the Bureau of Transportation Statistics' (BTS) freight Transportation Services Index (TSI), freight shipments were at the highest all-time levels in the last two months of 2013. Freight shipments, as measured by the index, were up 4.4 percent in December 2013 compared to December 2012 (figure 1-7) [USDOT BTS 2014].

How Domestic Freight Moves

In 2012 the freight transportation industry moved goods over a network of truck routes, railroads, waterways, airports, and pipelines. The distance a shipment must travel, either by single mode or during any particular leg of a multimodal journey, plays a major part in determining what mode or modes are used (see figure 4-1).

Most goods are moved short distances (less than 250 miles), and accounted 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. Although accounting for less than 30 percent of the total weight of all shipments in 2007, shipments of more than 250 miles constituted the bulk of ton-miles logged—83.3 percent. Modal shares of freight vary considerably by distance. While trucks carry the largest shares by value, tons, and ton-miles for shipments moving 750 miles or less, rail is the dominant mode by tons and tonmiles of shipments ranging from 750 to 2,000 miles, and air, multiple, and other/unknown modes account for 51.8 percent of the value of shipments moving more than 2,000 miles [USDOT FHWA BTS 2014].

Trucks carry the highest percentage of the weight and value of goods in the United States. However, figure 4-2 shows that railroads and inland waterways carry large volumes and tonnages of commodities, like coal and petroleum products, over long distances [USACE 2013b]. Rail and water combined accounted for 15.2 percent of the total tonnage and 5.1 percent of the total value of freight moved in the United States in 2012. Air carriers moved high-value, low-weight products. This is underscored by the relatively extreme valueto- weight ratio of air cargo, which is nearly $70,000 per ton. In comparison, the overall value-to-weight ratio of cargo carried by all modes combined is less than $900 per ton. In 2012 pipelines moved 1.5 billion tons of goods valued at $768 billion ($512 per ton), while rail moved more tonnage of lessor value—2.0 billion tons valued at $551 billion ($275 per ton). Rail represented 10.3 percent of the total tonnage and 3.2 percent of the total value of shipments in 2012, about the same shares as reported in 2007. Rail shipments by tonnage are projected to increase by 37.3 percent between 2012 and 2040 [USDOT FHWA BTS 2014].

The water mode typically carries lowvalue, bulk products similar to rail.¹ While waterborne shipments, by tonnage and value, declined in 2008 and 2009, they have since rebounded. In 2012 the water transportation industry moved 975 million tons worth $339 billion ($348 per ton), representing 5.0 percent of the tonnage and 2.0 percent of the value of all freight shipments [USDOT FHWA BTS 2014]. In 2012 approximately 565 million short tons of cargo were moved by vessel along the inland waterways, including the Mississippi River—the Nation’s busiest waterway [USACE 2013].

In comparison with the rail and water modes, air transport carries high-value products, such as electronics, precision instruments, and pharmaceuticals that require quick delivery. Of all modes, the value of air-freight shipments is projected to increase the fastest from 2011 to 2040, growing by 327 percent [USDOT FHWA BTS 2014]. In 2012 U.S. airlines² carried a total of 62,424 million international and domestic revenue freight and mail cargo revenue ton-miles, of which 12,367 million were domestic [USDOT BTS 2014a].

Over the last 20 years, the U.S. transportation system has become increasingly intermodal. Although intermodal services accounted for a relatively small share (8.1 percent) of freight tonnage, they moved 17.4 percent of the value of the goods in 2012. FAF forecasts the value of intermodal shipments to increase significantly between 2012 and 2040 [USDOT FHWA BTS 2014].³

The growth in intermodal freight movement is driven, in part, by global supply chain requirements. Between 1990 and 2010, the railroad industry reported an 82 percent increase in trailer and container traffic [AAR 2011]. Preliminary data from the Association of American Railroads show that rail intermodal traffic accounted for 12.6 percent of U.S. Class I railroad revenue in 2011. Only coal along with chemicals and allied products accounted for a larger share of revenue [AAR 2013]. With the growth in container trade and improvements in information and logistics technologies, the stage is set for increased reliance on intermodal transportation to move goods from manufacturers to consumers.

Commodities Moved Domestically

Table 4-2 shows that bulk products, such as gravel, cereal grains, coal, and waste/scrap, comprised a large share of the tonnage moved in 2012, but a comparatively small share of the value of the Nation's freight. In fact, in 2012 the top 10 commodities by weight accounted for 65 percent of total tonnage but only 16 percent of the value of goods. Rounding out the top 10 by weight were nonmetallic products, gasoline, fuel oils, crude petroleum, and other foodstuffs [USDOT FHWA BTS 2014]. Box 4-B discusses the Bakken formation, which has experienced significant growth in crude petroleum shipments.

The picture changes significantly when looking at the value of goods shipped. The highest value goods were those that are time-sensitive, including electronics, pharmaceuticals, and textiles/leather. Other top commodities by value are machinery, motorized vehicles, intermodal shipments, gasoline, and plastics/ rubber, and other foodstuffs. In 2012 the top 10 commodities by value accounted for 58 percent of total value but only 13 percent of total tonnage [USDOT FHWA BTS 2014]. Chapter 7 covers the safety and environmental issues associated with transportation of hazardous materials.

International Trade

U.S. retailers are increasingly dependent on the U.S. transportation system, especially those that build up their inventories in October in anticipation of holiday sales in November and December. In particular, businesses utilize liner services to move intermodal shipping containers seamlessly through the global transportation system. Container ports represent the link between the global and domestic freight network, utilizing intermodal barge, truck, and rail connections to transport containers to their final destinations [USDOT BTS 2012]. The value of total U.S.-international merchandise trade increased from $2.6 trillion in 2000 to $3.8 trillion in 2012—a 43.4 percent inflation-adjusted increase⁴ [USITC DATAWEB 2014].

Six of the top 15 U.S. trading partners were Asian countries in 2012. Trade with China grew the fastest, from 5.8 percent of the total value of U.S. merchandise trade in 2000 to 14.0 percent in 2012. In 2000 China ranked 10th among U.S. trading partners; today it is second only to Canada while Mexico, Japan, and Germany, respectively, round out the top five [USDOC ITA 2014].

Surface Trade With Canada and Mexico

Our North American Free Trade Agreement partners—Canada and Mexico—accounted for 29.0 percent ($1.11 trillion) of the value of U.S. merchandise trade in 2012. Over the 2000 to 2012 period, combined trade adjusted for inflation with Canada and Mexico increased 26.8 percent⁵ [USDOC ITA 2014].

Trucks carried 27.9 percent of the tonnage and 59.9 percent of the value of trade with these two countries, while rail carried 21.9 percent of the tonnage and 15.1 percent of the value (table 4-3). U.S. trade with Canada and Mexico was $103.1 billion in October 2013, exceeding $100 billion for the first month on record. Mineral fuels and oils transported by pipeline and vessel accounted for much of the increased trade value [USDOT BTS 2013a].

In 2012 U.S. imports from Canada and Mexico exceeded exports in terms of merchandise trade value. Motor vehicles were the top commodity category for goods transported by land modes between the United States and Canada. Michigan, which accounts for 13.0 percent of the U.S.-Canada border mileage, was the leading state for trade by land modes with Canada. Michigan has border crossing/entry ports between Detroit, Port Huron, and Sault Ste. Marie and southern Ontario; both Michigan and Ontario have a high concentration of automakers. Texas, which accounts for 64.2 percent of the U.S.- Mexico border mileage and is home to 11 border crossing/entry ports, led all other states in surface trade with Mexico. Electrical machinery was the top commodity transported between the United States and Mexico [USDOT BTS 2013b]. In total, there are 87 ports-of-entry along the U.S.-Canada border and 25 on the U.S.-Mexico border.

Freight Transportation Gateways

A large volume of U.S.-international merchandise trade passes through a relatively small number of freight gateways—the entry and exit points for trade between the United States and other countries (figure 4-4). In 2012 the Port of Los Angeles was the top water gateway, handling more than $214.6 billion in cargo, mostly imports, while on the Atlantic coast the port of New York and New Jersey ranked second, handling $209.6 billion. That year John F. Kennedy International Airport was the leading air gateway, handling $182.7 billion in exports and imports. Laredo, the top land-border crossing, handled $163.4 billion in trade across the U.S.-Mexico border, followed by Detroit, which handled $130.9 billion across the U.S.-Canada border in 2012 [USDOT BTS 2013a].

Water is the leading transportation mode for U.S.-international trade both in terms of weight and value. Ships accounted for more than 73.5 percent of trade weight and 46.6 percent of trade value in 2012. Air handles less than 1 percent of trade weight but 24.3 percent of trade value, due to its focus on high-value, time-sensitive, and perishable commodities. In 2012 the top U.S.- international air gateways by value were John F. Kennedy International, NY, Chicago O'Hare International, IL, and Los Angeles International, CA [USDOT BTS 2014b]. Memphis International, TN, Louisville International, KY, and Ted Stevens Anchorage International, AK, were the top domestic air gateways by weight in 2012 [USDOT BTS 2014a]. Trucks, which haul a large share of imports and exports between U.S. international gateways and inland locations, carried 17.4 percent of the value of total U.S.-international trade (figure 4-5a) and 10.1 percent of the tonnage in 2012 (figure 4-5b).

Water Trade

As a result of the growth in international trade, the number of container vessels calling at U.S. ports has increased. Between 2006 and 2011, vessel calls at U.S. seaports increased by 7.9 percent. In 2011 tankers accounted for 35.0 percent of the vessel calls, followed closely by containerships with 32.5 percent. The average displacement of container vessels increased 9.9 percent, from 46,602 deadweight tons (dwt) in 2006 to 51,204 dwt in 2011. The new post-Panamax containerships also increased in average capacity by 13.3 percent, as measured in twenty-foot equivalent units (TEU) during this time [USDOT MARAD 2013a].

In 2012 U.S. seaports handled 29.4 million TEU of containerized cargo, which is about the same as 2007 and up by 18.4 percent from 24.9 million TEU in 2009, following the last recession. The ports of Los Angeles and Long Beach on the Pacific coast and the port of New York and New Jersey on the Atlantic coast are the leading container ports [USDOT MARAD 2013b]. As shown in figure 4-6, the geographic distribution of container ports is more concentrated along the Pacific and Atlantic coasts, while large volumes of bulk commodities are transported through gulf coast ports (figure 4-2). In 2011 the Pacific coast accounted for 27.0 percent of all types of vessel calls, followed by the Atlantic coast, including Puerto Rico, with 38.9 percent, and then the gulf coast with 34.1 percent [USDOT MARAD 2013a].

The major increase in trade with China has resulted in a large share of trade moving through Pacific coast ports (figure 4-7). The trend toward larger containerships has led to a concentration of liner service at ports with ample overhead clearance and water draft, intermodal connections such as double stack rail, and room to grow. This trend is expected to continue, especially when the expanded Panama Canal locks open [USDOT BTS 2011a]. U.S.-international trading partners as well as global and domestic freights flows have and will continue to evolve. Growth in U.S.-international trade over the past 20 years has increased freight volumes on major freight highway, rail, and waterway routes as international trade competes with domestic freight and passenger traffic for use of the transportation infrastructure. Moreover, trade growth with Canada and Mexico and the tapping of natural resources, such as the Bakken formation (box 4-b), generates increased northsouth traffic flows on a domestic transportation infrastructure that was initially developed along east-west corridors during the westward development of the Nation.

References

Association of American Railroads (AAR).

—2011. Railroad Facts 2011 (November 2011). Available at www.aar.org/ as of January 2014.

—2013. Class I Railroad Statistics (January 10, 2013). Available at www.aar.org/ as of January 2014.

Tolliver, Denver (TOLLIVER); North Dakota State University, Upper Great Plains Transportation Institute, Effects of Oil & Gas Development on Highway Infrastructure Investments, presentation to the 92nd Annual Meeting of the Transportation Research Board (2013).

Upper Great Plains Transportation Institute (UGPTI), An Assessment of County and Local Road Infrastructure Needs in North Dakota (2012).Available at http://www.ugpti.org/ as of January 2014.

U.S. Army Corps of Engineers (USACE), Institute for Water Resources, Navigation Data Center, Waterborne Commerce Statistics Center. The U.S. Waterway System: Transportation Facts and Information (December 2013). Available at http://www.navigationdatacenter.us/ as of September 2013.

U.S. Department of Commerce (USDOC), Bureau of Economic Analysis (BEA), National Income and Product Accounts Tables (August 2014). Available at http://www.bea.gov/ as of September 2014.

U.S. Department of Commerce (USDOC), Census Bureau (Census):

—Statistics of U.S. Businesses (SUSB), Number of Firms, Number of Establishments, Employment, and Annual Payroll by Enterprise Employment Size for the United States and States, Totals: 2011, available at http://www.census.gov/ as of January 2014.

—International Trade Administration (ITA), TradeStats Express. Available at http://tse.export.gov/ as of August 2014.

—2013. Population Profile of the United States. Available at http://www.census.gov/ as of September 2013.

—Census of Governments (Govs), 2012 Census of Governments. Available at http://www.census.gov/govs as of September 2013.

U.S. Department of Energy (USDOE), Energy Information Administration (EIA). Bakken oil production forecast to top 1 million barrels per day next month (November 15, 2013). Available at http://www.eia.gov/ as of April 2014.

U.S. Department of Transportation (USDOT), Bureau of Transportation Statistics (BTS):

—2014a. T-100 Market Data (January 2014). Available at http://www.bts.gov/ as of February 2014.

—2014b. Pocket Guide to Transportation (January 2014). Available at http://www.bts.gov/ as of February 2014.

—2014c. BTS Press Release 07-14: Freight Shipments Fell 1.0% in December from November (February 12, 2014). Available at http://www.bts.gov/ as of April 2014.

—2013a. BTS Press Release 12-13: 2012 Surface Trade with Canada and Mexico Rose 6.2 Percent from 2011 (March 21, 2013). Available at http://www.bts.gov/ as of 2014.

—2013b. BTS Press Release 01-14: U.S. - NAFTA Trade Exceeds $100B for First Time on Record (January 7, 2014). Available at http://www.bts.gov/ as of January 2014.

—2012. Transportation Trends in Focus: Containerships Carry Inventory for U.S. Retailers (September 2012). Available at http://www.bts.gov/ as of January 2014.

—2011a. BTS Special Report: The Changing Tide of U.S.-International Container Trade: Differences Among the U.S. Atlantic, Gulf, and Pacific Coasts (December 2011). Available at http://www.bts.gov/ as of January 2014.

—2011b. Hazardous Materials Highlights—2007 Commodity Flow Survey (January 2011). Available at http://www.bts.gov/ as of January 2014.

U.S. Department of Transportation (USDOT), Federal Highway Administration (FHWA) and the Bureau of Transportation Statistics. Freight Facts and Figures 2013 (May 27, 2014). Available at http://www.bts.gov/ as of May 2014.

U.S. Department of Transportation (USDOT), Maritime Administration (MARAD):

—2013a. Vessel Calls Snapshot, 2011 (November 2013). Available at http://www.marad.dot.gov/ as of January 2014.

—2013b. U.S. Waterborne Foreign Container Trade by U.S. Custom Ports (September 26, 2013). Available at http://www.marad.dot.gov/ as of January 2014.

U.S. International Trade Commission (USITC). Interactive Tariff and Trade DataWeb. Available at http://dataweb.usitc.gov as of August 2014.

¹ Many shipments arriving in the United States by rail and water are transferred to another mode for delivery to their final destination. These shipments are counted under multiple modes. Thus, the rail and water numbers discussed here may be lower than those in other published sources.

² In all service classes (scheduled and nonscheduled)

³ The FAF category for multiple modes and mail includes all multimodal movements and is not limited to traditional intermodal services, such as trailer-on-flatcar and container-on-flatcar rail.

⁴ The 2000 U.S. International Trade Commission trade data was adjusted to current dollars using the Bureau of Labor Statistics' Consumer Price Index (CPI) Inflation Calculator.

⁵ The percent increase was calculated by adjusting the 2000 trade data using the CPI Inflation Calculator.