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Chapter 5 Transportation Economics

Highlights

  • The demand for transportation increased by 4.2 percent from 2013 to 2014, marking the highest annual growth since the end of the December 2007 to June 2009 economic recession. The demand for transportation in 2014 exceeded 2007 for the first time since the end of the 2007 to 2009 recession.
  • Freight traffic, as measured by the freight TSI, has a strong relationship to the economy, with the freight TSI tending to lead accelerations and decelerations in the economy.
  • Employment in for-hire transportation and transportation-related industries has continued to rise since declining during the 2007 to 2009 recession, reaching 13.1 million in 2014, but has yet to rise above the pre-recession level of 13.5 million in 2007.
  • Total national expenditures on transportation accounted for roughly
  • $1,184 billion of all personal expenditures, making it the fourth largest expenditure category after healthcare, housing, and food.
  • Total government transportation revenues continue to fall short of government transportation expenditures. In 2012 government transportation revenues covered 56.3 percent of expenditures. The gap between transportation revenues and expenditures has declined since 2009, when revenues covered 51.0 percent of expenditures.
  • The total costs faced by producers of transportation services have increased. Businesses purchasing transportation services also have faced price increases, with the price for rail transportation services growing (58.2 percent) more rapidly than any other transportation mode except pipeline, which grew 124.3 percent between 2014 and 2015.

Transportation Economics

Transportation plays a vital role in the American economy. It makes economic activity possible and serves as a major economic activity in its own right, contributing directly and indirectly to the economy. Households, businesses, and the government directly consume transportation goods (e.g., vehicles and motor fuel) and services (e.g., passenger and freight air transportation). Transportation indirectly contributes to the economy by enabling the production of goods and services (e.g., by connecting producers to the raw materials for baking bread, etc.) and employing workers in transportation occupations in both the transportation industry and non-transportation industries. Public (government) and private expenditures on transportation facilities, infrastructure, and systems contribute to the economy by enabling the movement of both people and goods domestically and internationally. Transportation not only enables international trade but also is a major good and service traded. The full scope of transportation’s role in the economy is available in BTS’s new Transportation Economic Trends Report.

Transportation’s Contribution and Role in the Economy

Transportation’s Contribution to GDP

Transportation’s contribution to the economy can be measured by transportation’s contribution to gross domestic product (GDP). GDP is an economic measure of all goods and services produced and consumed in the country. The transportation component of GDP can be measured in terms of investments made and transportation goods and services consumed (collectively known as the demand for transportation) or in terms of the transportation services produced.

In 2014 the demand for transportation ($1,422.1 billion) included personal consumption, such as vehicle and motor fuel purchases ($978.3 billion), private domestic investment in transportation structures and equipment ($282.7 billion), government purchases of transportation goods and services ($273.0 billion), and net exports (exports minus imports) related to transportation goods and services (-$111.9 billion) (as measured in chained 2009 dollars) (table 5-1). Personal consumption of transportation is the largest component at 68.8 percent, followed by private domestic investment in transportation structures and equipment at 19.9 percent, government purchases at 19.2 percent, and net exports related to transportation goods and services at -7.9 percent. Altogether, the demand for transportation accounted for 8.9 percent of U.S. GDP.

The demand for transportation increased by 4.2 percent from 2013 to 2014, marking the highest annual growth since the end of the December 2007 to June 2009 economic recession. Gross private domestic investment in transportation equipment and structures, which grew 11.5 percent from 2013 to 2014, contributed significantly to the overall increase in the demand for transportation. The demand for transportation in 2014 exceeded 2007 for the first time since the end of the 2007 to 2009 recession (table 5-1).

Transportation’s Role in Production

The contribution of transportation to the economy can also be found by examining transportation’s role in production. The transportation services used to move wheat from farms to mills, flour from mills to bakers, and bread from bakers to grocery stores, exemplify how transportation enables the production and sale of nearly everything made and consumed in the United States. The U.S. Bureau of Economic Analysis (BEA) produces the U.S. Input-Output (I-O) accounts, which show the inputs each industry uses to produce output, the type of output produced by each industry, and the types of products purchased by final consumers.

With regards to transportation, the I-O accounts show the industries using transportation services provided by transportation firms on a fee basis, called for- hire transportation, and the contribution of for-hire transportation firms to the economy. In 2015 for-hire transportation (including warehousing) contributed $527.7 billion (2.9 percent) to U.S. GDP (current dollars) [USDOC BEA 2016a]. While for-hire transportation contributes less to the economy than other industries, for-hire transportation delivers the raw materials other industries need to produce finished products and deliver finished products to wholesale and retail outlets.

In addition to using for-hire transportation services, many nontransportation industries also undertake transportation activities for their own purposes (called in-house transportation), which the I-O accounts do not explicitly show. BTS developed the Transportation Satellite Accounts (TSAs) to clearly show in-house transportation operations and thereby estimate the full contribution of transportation to the economy (box 5-A). The TSAs also show the contribution of transportation carried out by households through the use of an automobile.

In 2014, the latest year for which comprehensive data are available, transportation’s total estimated contribution to the economy was $1,001.9 billion. For-hire transportation contributed $504.8 billion (2.9 percent) to the U.S. GDP of $17.7 trillion. Transportation services (air, rail, truck, and water) provided by nontransportation industries for their own use (in-house transportation) contributed an additional $187.2 billion (1.1 percent). Total household transportation (i.e., the depreciation cost associated with households owning motor vehicles) contributed $309.9 billion (1.8 percent). Total household transportation’s contribution to GDP was larger than any of the other transportation modes. Trucking contributed the second largest amount, at $285.2 billion. In-house truck transportation operations contributed $153.2 billion, while for-hire truck transportation services contributed $132.1 billion (figure 5-1). The size of trucking’s contribution reflects the use of trucks by for-hire transportation and nontransportation industries for their own purposes.

Transportation indirectly contributes to the economy by enabling the production of goods and services. Industry Snapshots: Uses of Transportation summarizes the transportation services and related resources used by the six major nontransportation sectors to produce their goods and services [USDOT BTS 2016c]. Some sectors use more transportation than others. In 2014 the wholesale and retail trade sector used the largest amount of transportation services at $292.1 billion, followed by the information and services sector at $264.8 billion, the manufacturing sector at $225.7 billion, and the government sector at $153.1 billion (figure 5-2).

Looking at the amount of transportation required to produce one dollar of output shows how much a sector depends on transportation. In 2014 the wholesale and retail trade sector required more transportation services to produce one dollar of output than any other sector. In 2014 the wholesale and retail trade sector required 9.9 cents of transportation services to produce one dollar of output—5.3 cents of in-house truck transportation operations and 4.6 cents of for-hire transportation services in 2014 (figure 5-3).

Transportation and Economic Cycles

Transportation activities have a strong relationship to the economy. The Bureau of Transportation Statistics (BTS) developed the Transportation Services Index (TSI) to measure the volume of freight and passenger transportation services provided monthly by the for-hire transportation sector (see box 5-B). BTS research shows that changes in the TSI occur before changes in the economy, making the TSI useful for predicting economic trends [USDOT BTS 2014]. This relationship is particularly strong for freight traffic.

Figure 5-4 illustrates the relationship between the freight TSI and the national economy from 1970 to 2015. The dashed blue line shows the freight TSI detrended to remove long- term changes. The red line shows the freight TSI detrended and smoothed to eliminate month-to-month volatility. The gray bars represent economic slowdowns, or periods when economic growth slows below normal rates and unemployment rises as a result. The marked peaks and troughs show that the freight TSI usually peaks before a growth slowdown begins and hits a trough before a growth slowdown ends. The most recent trough occurred in May 2009—one month prior to the end of the January 2008 to June 2009 economic slowdown. The freight TSI rose rapidly after May 2009 but then slowed through 2015. Overall, the freight TSI grew 27.2 percent from May 2009 to December 2015.

Figure 5-5 shows the changes in freight movement by the transportation modes included in the freight TSI. Rail intermodal grew the fastest, rising 47.1 percent from June 2009 (the end of the economic recession) to February 2016 (the latest available month). Competitive pricing, track upgrades, and investment in rail intermodal terminals and other infrastructure contributed to the rapid growth of rail intermodal traffic [AAR 2016a]. Trucking grew the second fastest at 35.3 percent. All other modes likewise grew from June 2009 through February 2016 except rail carloads, which declined 1.8 percent. Data from Railroads and Coal suggests that the weakness in rail carload shipments is due to a weakness in coal shipments. Total coal shipped by Class I railroads peaked in 2008 at 878.6 million tons, dropped to 787.6 in 2009, and continued to fall to 638.1 million tons in 2015 [AAR 2010, 2015, and 2016b].

Transportation-Related Employment and Wages

The transportation and warehousing sector and related industries employ over 13.1 million people in a variety of roles, from driving buses to manufacturing cars to building and maintaining ports and railroads. Figure 5-6 shows the number and percentage of workers employed by for-hire transportation and transportation-related industries in the United States from 1990 to 2014. In 1990 12.3 million workers were employed in for- hire transportation and transportation-related industries. Employment rose to a high of 13.9 million workers in 2000, but declined to 13.2 million in 2003 due to the March to November 2001 economic recession and to the aftermath of September 11, 2001. Employment declined further to a low of 12.1 million in 2010 due to the 2007 to 2009 recession. Employment has steadily risen, reaching 13.1 million in 2014, but remains below the 2007 level of 13.5 million. The percentage of American workers employed in for-hire transportation and transportation-related industries, however, has continued its decline—from 11.3 percent in 1990 to 9.4 percent in 2014. [USDOT BTS 2016d]

The for-hire transportation sector (transportation service providers and warehousing) is a major source of employment in the United States, employing 4.7 million in 2014 (figure 5-6). The sector’s labor force declined during the 2007 to 2009 recession and continued to fall through 2010 before rising above the 2007 level in 2014 [USDOT BTS 2016d]. Additional persons work as independent contractors for private transportation providers, such as drivers for independent, on-demand ride-services (e.g., Uber and Lyft) but are not counted in the totals (see box 5-C).

Transportation also leads to employment in related industries that provide the goods and services needed to produce transportation. These transportation industries include motor vehicle and parts dealers, transportation equipment manufacturing, gasoline stations, and petroleum and coal products manufacturing. A notable shift in transportation-related employment occurred between 1990 and 2014. From 1990 through 2001, transportation equipment manufacturing was the largest transportation-related industry. However, as employment in transportation equipment manufacturing experienced a prolonged decline, motor vehicle and parts dealers became the largest transportation- related industry in 2002. Employment in motor vehicle and parts dealers grew by 24.6 percent from 1990 to 2014 (figure 5-7).

Workers with transportation occupations overall earned, at $30,090, a lower median wage than workers of all occupations ($36,200) in 2015 [USDOL BLS 2016b]. Annual wages earned by transportation and transportation-related workers vary widely across transportation occupations. For example, in 2015 air traffic controllers, airline pilots, and aerospace engineers had an annual median wage of more than $100,000 while the largest transportation- related occupation, heavy and tractor-trailer truck drivers, had an annual median wage of $40,260. The top-five highest wage transportation-related occupations collectively employ fewer workers (288,270), while the lowest-five wage occupations employ 4.1 times more workers (1.2 million) (figure 5-8).

Transportation Productivity

The size of the transportation workforce depends on the demand for transportation and on firms’ utilization of the workforce. Technological improvements, more efficient use of workers, and other factors allow firms to provide transportation services that use fewer employees.

Labor productivity measures the production of goods and services per hour of labor. From 1990 to 2015, air transportation’s labor productivity increased 158.4 percent—the largest increase among transportation modes that collect labor productivity data—making air transportation the most productive mode in 2015. Labor productivity for rail increased by 129.3 percent during the same period. Smaller increases occurred in freight trucking (32.9 percent) and the U.S. Postal Service (14.6 percent) [USDOL BLS 2016c] (figure 5-9). Increases in labor productivity are the result of multiple factors, including a more efficient mix of labor and capital through technology growth, reductions in the workforce or wages following the recession, and changes in regulations among other potential market forces impacting the alignment between labor and output.

The impact of productivity on transportation companies can be seen through changes in the price charged per unit of output. For passenger transportation, the unit of output is passenger- miles, and average revenue per passenger- mile is the measure of what travelers pay. For freight transportation, the unit of output is ton- miles, and average freight revenue per ton-mile is the measure of what freight shippers pay. For modes where users do not typically pay per use, like driving, complete data are difficult to obtain. Increases in productivity often reduce business costs, which allow transportation companies to offer lower prices.

Figure 5-10 shows nominal changes in revenue per passenger-mile from 1990 to 2015 relative to the index for all consumer expenditures (the Consumer Price Index) for three industries: domestic air carriers, commuter rail, and Amtrak/intercity rail. Amtrak/intercity rail experienced the largest growth in revenue per passenger-mile, increasing 166.1 percent between 1990 and 2015, while commuter rail increased 81.9 percent between 1990 and 2014 (the latest year for which data are available). Domestic air carrier revenue per passenger- mile remained almost unchanged, increasing 4.9 percent.

The increases in revenue per passenger-mile are partly due to an increase in the overall price of goods and services. The CPI, which measures overall changes in prices, increased by 81.3 percent from 1990 to 2015, indicating that Amtrak/intercity rail was the only industry with real increasing revenue per passenger- mile during the period. Commuter rail only marginally surpassed the growth in the CPI (81.1 percent) between 1990 and 2014.

Figure 5-11 shows the average freight revenue per ton-mile for air, truck, rail, and pipeline. Nominal freight revenue per ton-mile increased for all freight modes. Domestic air carriers experienced the largest increase in revenue per ton-mile, increasing 124.6 percent from 1990 to 2015. Class I railroads1  experienced a smaller increase in revenue per ton-mile of 48.7 percent in the same period. Domestic air freight was the only mode with a revenue increase greater than the overall increase in the prices received by transportation service providers for their services.2 Domestic air freight, therefore, was the only mode to experience real growth in revenue per ton-mile from 1990 to 2015.

Transportation Expenditures and Revenues

Household Spending

In 2015 total national expenditures on transportation by and on behalf of U.S. residents amounted to $1,184 billion, making it the fourth largest expenditure category after healthcare, housing, and food (figure 5-12). Ninety-two percent of personal transportation expenditures went to the purchase, operation, and upkeep of personal vehicles [USDOC BEA 2016b].

Between 2000 and 2015, transportation expenditures increased 41.2 percent, from $838 billion to $1,184 billion. The growth in total expenditures outpaced the growth in transportation expenditures, increasing 80.7 percent, from $6.79 trillion to $12.27 trillion over the same period. Expenditure growth for healthcare (133.5 percent), housing (84.1 percent), and food (78.1 percent) outpaced expenditure growth for transportation. As a result, the percentage of total expenditures for transportation declined from 12.3 percent in 2000 to 9.6 percent in 2015. [USDOC BEA 2016b]

Public and Private Sector Expenditures and Revenue

Expenditures

Most government spending on transportation takes place at the state and local levels, although state and local capital expenditures are often paid for in part with federal funds. In 2012 the Federal Government spent $38.5 billion on transportation (excluding federal grants to states), and state and local governments spent $281.4 billion (including expenditures paid with federal grants). In real3 2009 dollars, transportation expenditures at all levels of government have increased since 1995. From 1995 to 2012, real state and local expenditures (including expenditures paid for with federal funds) increased more, at 36.8 percent, than federal expenditures, at 17.3 percent. In 2009 the Federal Government enacted the American Recovery and Reinvestment Act of 2009 (Pub. L. 111–5), which authorized $48.1 billion in transportation stimulus spending. As a result, transportation government expenditures for 2009 rose significantly. [USDOT BTS 2016a]

Most federal spending (excluding federal grants to states) is for aviation ($18.2 billion in 2012, or 47.4 percent) and highways ($8.7 billion, or 22.7 percent) (figure 5-13). In real 2009 dollars, aviation spending peaked in 2002, when governments increased spending on airport security in response to September 11, 2001 and has since decreased by 40.3 percent. Federal highway spending peaked in 2010 with the post-recession stimulus spending, then declined. [USDOT BTS 2016a]

Most state and local spending (including expenditures paid for with federal grants) on transportation went to highways ($197.5 billion in 2012, or 70.2 percent) and transit ($55.1 billion, or 19.6 percent) (figure 5-14). In real 2009 dollars, both highway and transit expenditures have increased from 1995 to 2012—highways by 34.0 percent and transit by 36.5 percent. Highway and transit spending peaked in 2009 as a result of transportation stimulus spending. [USDOT BTS 2016a]

In 2015 private and public spending on transportation construction totaled $134.3 billion (figure 5-15). The public sector is the major funding source for transportation infrastructure construction, especially for streets and highways. In 2015 the value of government-funded (public) construction underway accounted for 90.2 percent ($121.2 billion) of total spending on transportation construction, and private transportation construction accounted for the remaining 9.8 percent ($13.1 billion). Approximately three- quarters of government-funded investment was for highways ($89.5 billion); the remainder supported the construction of air, land, and water transportation facilities ($31.7 billion). Investment has been growing since 2002, despite a slight decline in 2011 associated with the terminus of American Recovery and Reinvestment Act of 2009 (Pub. L. 111–5) stimulus spending on transportation. [USDOC CENSUS 2016]

Revenue

Government transportation revenue comes from user taxes and fees, such as gasoline taxes and tolls, air ticket taxes and fees, and general revenues as well as income from investing transportation funds and receipts from fines and penalties. In 2012 government revenue collected and dedicated to transportation programs totaled $350.4 billion. A portion of this revenue ($180.2 billion, or 51.4 percent) comes from taxes and charges levied on transportation-related activities, while $170.3 billion (48.6 percent) comes from non-transportation-related activities but supports transportation programs (e.g., state or local sales or property taxes used to finance transportation projects). In addition to the $350.4 billion, governments collected $21.4 billion in revenue from transportation- related activities but diverted this revenue to nontransportation programs (e.g., revenue from motor fuel taxes directed to the general fund for other uses). In real 2009 dollars, total revenue collected by the government and dedicated to transportation programs increased by 43.3 percent from 1995 to 2012. [USDOT BTS 2016a]

The Federal Government collected $112.9 billion of the $350.4 billion (32.2 percent). Of this revenue, the Federal Government collected $55.5 billion from transportation-related activities, most of which came from highway and air transportation activity. Highway and air transportation, which have trust funds supported by dedicated taxes, accounted for 95.6 percent of federal transportation revenue in 2012. The Federal Government collected and dedicated $40.3 billion (72.6 percent) in highway revenues and $12.8 billion (23.1 percent) in aviation revenues to transportation programs (figure 5-16). In real 2009 dollars, highway trust fund revenues decreased by 8.7 percent from 1995 to 2012 [USDOT BTS 2016a]. The Federal Government has not increased the federal taxes for gasoline and diesel—18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel—since October 1997, causing real revenues to decline. Revenues also declined because vehicle gas mileage improved over the last two decades and because vehicle miles traveled declined during the 2007 to 2009 recession.

State and local governments collected $237.6 billion of the $350.4 billion (67.8 percent). Of this revenue, the state and local governments collected $124.7 billion from transportation- related activities, most of which is from highway revenue sources ($84.8 billion, or 68.0 percent of transportation revenue in 2012), which include fuel taxes, motor vehicle taxes, and tolls. Aviation-related revenue ($18.3 billion, or 14.7 percent) comes from landing fees, terminal area rentals, and several other sources (figure 5-17).

Revenue collected from transportation-related activity and dedicated to transportation programs continues to fall short of government transportation expenditures. In 2012 transportation revenues covered 56.3 percent of expenditures. The gap between transportation revenues and expenditures has declined since 2009 when revenues covered 51.0 percent of expenditures [USDOT BTS 2016a]. When revenues do not cover expenditures, general tax receipts (e.g., from sales and property taxes), trust fund balances, and borrowing are needed to cover shortages.

Cost of Transportation

The movement of goods and people requires the use of resources—labor, equipment, fuel, and infrastructure. The use of these resources is the cost of transportation. Producers and users of transportation services pay for the resources. Users of transportation services include businesses, the government, and households. Businesses pay for transportation to acquire inputs for the goods they make and to deliver final products to consumers. Households purchase resources, such as motor vehicles and motor vehicle fuel, for travel by automobile.

Costs Faced by Producers of Transportation Services

There are two types of transportation services provided: freight transportation services provided to producers of goods and service (e.g., trucking and air freight) and passenger transportation services provided to both producers and household consumers. The major inputs to produce transportation services include transportation equipment, fuel, labor, and other materials and supplies as well as the depreciation of items like airplanes, trucks, railroad locomotives and freight cars, trucking terminals, railroad track, and other infrastructure. The price of these inputs impacts the price of freight and passenger transportation services.

The costs faced by producers of transportation services for transportation equipment continuously increased between 2004 and 2015, except for automobiles and light duty motor vehicles (figure 5-18).4  The costs faced when purchasing automobiles and light duty vehicles contrastingly declined between 2004 and 2008, leveled off from 2009 to 2010, and then increased between 2011 and 2015. The costs faced for railroad, aircraft, heavy duty truck, and ship and boat manufacturing showed greater growth than that for all transportation equipment combined. This increase in equipment prices potentially impacts the profitability and purchase decisions of transportation sectors, the transportation costs for transportation users, and/or prices in other sectors that use transportation services, such as wholesale, retail, and warehousing and storage industries.

Transportation fuel prices also impact the price of freight and passenger transportation and the demand for transportation. An increase in fuel prices, for instance, may reduce the demand for transportation modes reliant on that fuel and shift demand to transportation modes that use less costly fuels. Average annual fuel prices for all classes of transportation fuels, except aviation gasoline and railroad diesel fuel, peaked in 2012 and have since declined. The average annual fuel price for gasoline peaked at $3.70 in 2012 and declined 32.1 percent to $2.51 in 2015 (figure 5-19). The most recent data for aviation gasoline and railroad diesel fuel show little change in price since 2012 (the most recent year for which data are available).

Costs Faced by Purchasers of Transportation Services

The prices that transportation companies charge for transportation impact freight shippers’ and travelers’ transportation decisions. Despite periods of modest decline, businesses purchasing transportation services saw an overall increase in the relative prices for air, rail, truck, water, and pipeline transportation services between 2004 and 2015. During that time, the costs faced by businesses to purchase rail services grew by 58.2 percent; more rapidly than that for any other transportation mode, except pipeline which grew 124.3 percent. The costs faced to purchase truck, water, and air transportation services also increased, with trucking services growing at a slightly slower rate (28.3 percent) than water (37.9 percent) and air (36.4 percent) transportation services. Transportation service prices declined during the 2007 to 2009 recession after which they climbed steadily through 2014. The average price of air, rail, and truck transportation services declined between 2014 and 2015, while water transportation service prices rose (figure 5-20).

Costs Faced by Households

The costs households face for transportation services (e.g., air travel) and transportation inputs (e.g., motor vehicle fuel) impact households’ spending decisions. Most passenger travel in the United States is by personal motor vehicle. The cost of owning and operating personal motor vehicles impacts household travel behavior—what mode households choose, how often they travel, and how far.

The cost of owning and operating a personal motor vehicle includes insurance, license, registration, taxes, depreciation, and finance charges (ownership costs) as well as gasoline, tires, and maintenance (operating costs). Ownership costs accounted for nearly three-fourths of the total annual cost of owning and operating a personal motor vehicle on a cents per mile basis in 2014. Ownership costs in 2014, however, accounted for a smaller share of the total annual cost than in 1990, while operating costs accounted for a larger share. Looking at operating costs, the cost of both gasoline (the largest operating cost) and maintenance grew from 1990 through 2014, while the cost of tires rose from 1990 through 2003, declined in 2004, and then increased slightly between 2008 and 2014. Looking at the most recent years, the average total cost of gasoline per mile has fallen from a high of 14.5¢ per mile in 2012. In 2014 the average total cost of operating a personal motor vehicle (assuming 15,000 vehicle miles per year) was 58.0¢ per mile (figure 5-21).

According to the Consumer Price Index for Urban Consumers (CPI-U),5 the average price of owning and operating a personal motor vehicle (private transportation in the CPI-U) rose (63.0 percent) between 1990 and 2015, albeit less than for all goods and services (81.3 percent). Of personal motor vehicle ownership and operating costs, motor vehicle insurance prices increased the most between 1990 and 2015, growing 158.9 percent. The average price of new vehicles grew the least, increasing only 21.2 percent over the same period. [USDOL BLS 2016a]

The total average price of owning and operating a personal motor vehicle grew less than public transportation. Between 1990 and 2015, public transportation prices increased 88.4 percent [USDOL BLS 2016a]. The rise in airfare and intracity transportation prices drove the growth in public transportation prices between 1990 and 2015 (figure 5-22).

Transportation as a Component of International Trade

Transportation and Trade

Transportation enables the export of American goods and services and connects U.S. businesses to sources of raw materials and consumers to imported goods. An efficient and reliable domestic transportation system with good connections to the international transportation system supports the United States in the global marketplace. Transportation not only enables international trade but also is a major good and service traded.

The value of goods traded (the total value of exports and imports) was $3.8 trillion in 2015 (current dollars). After accounting for inflation, the real value of goods traded grew from 2000 to 2015, despite a slight decline during the 2007 to 2009 recession. Exports account for an increasing share of the total value of goods traded, but imports in goods continue to exceed exports. In 2015 the goods deficit (exports minus imports) was $775.7 billion in current dollars [USDOC BEA 2016e].

In 2015, 18.2 percent ($690.0 billion) of all goods traded internationally were related directly to transportation.6 Fuel oil comprised an additional 1.8 percent of all goods traded in 2015 [USDOC BEA 2016d]. Across all goods traded related to transportation, new and used passenger cars accounted for the largest share. In 2015 imports of transportation-related goods exceeded exports except for civilian aircraft, aircraft engines and parts, and fuel oil7 (figure 5-23).

Transportation services are used to move goods from and to the United States. In 2015, $1.8 trillion (15.1 percent) of all services traded were related directly to transportation [USDOC BEA 2016c]. The value of transportation services traded captures the following:

  1. passenger fares paid by U.S. residents (foreign residents) to airline carriers and vessel operators of other countries (of the United States),
  2. the freight charges for moving goods from and to the United States, and
  3. the expenses that transportation companies incur in foreign ports (i.e., goods and services procured by foreign carriers in U.S. ports and by U.S. carriers in foreign ports) [USDOC BEA 2016f]

The fares and fees paid to move goods and people to foreign countries exceeds the fares and fees received by foreign carriers bringing goods and people to the United States. However, since 2007 the amount received by foreign carriers for bringing goods and people to the United States accounts for an increasing share of total fares and fees paid to move goods and people to and from the United States [USDOC BEA 2016c].

Looking at individual modes, air passenger transportation accounted for the largest share of the total fares and fees paid to move goods and people to and from the United States, followed by sea freight transportation. For all modes except sea freight transportation, the fares and fees paid to move goods and people to foreign countries nearly equaled the fares and fees received by foreign carriers bringing goods and people to the United States. For goods moved by sea, the fares and fees received by foreign- operated vessels to bring goods to the United States exceeded the fares and fees paid to move goods to foreign countries (figure 5-24).

References

American Association of Railroads (AAR):

—2016a. Railroad Intermodal Keeps America Moving, May 2016. Available at https://www. aar.org/BackgroundPapers/Rail%20Intermodal. pdf as of October 2016.

—2016b. Class I Railroad Statistics, May 2016. Available at https://www.aar.org/ Documents/Railroad-Statistics.pdf as of May 2016.

—2015. Railroads and Coal, July 2015. Available at https://www.aar.org/ BackgroundPapers/Railroads%20and%20Coal. pdf as of May 2016.

—2010. Class I Railroad Statistics, May 2010. Available at http://ntl.bts. gov/lib/33000/33400/33488/AAR_ Stats_2010_0524 as of May 2016.

U.S. Department of Commerce (USDOC), Bureau of Economic Analysis (BEA).

—2016a. GDP-by-Industry. Value Added by Industry. Interactive, Annual. April 21, 2016 release. Available at http://www.bea.gov/ iTable/index_industry_gdpIndy.cfm as of May 2016.

—2016b. GDP and Personal Income. Personal Consumption Expenditures by Type of Product, table 2.5.5U. Interactive, Annual. April 29, 2016 release. Available at http://www.bea.gov/ iTable/index_nipa.cfm as of May 2016.

—2016c. International Services. Table 3.1 U.S. Trade in Services by Type of Service. Interactive, Annual. Available at http://www. bea.gov/itable/ as of May 2016.

—2016d. International Transactions (ITA). Table 2.1 U.S. International Trade in Goods. Interactive, Annual. Available at http://www. bea.gov/itable/ as of May 2016.

—2016e. National Income and Product Accounts (NIPA). Table 1.1.5 Gross Domestic Product; Table 1.1.6 Real Gross Domestic Product, Chained Dollars. Interactive, Annual. Available at http://www.bea.gov/itable/ as of May 2016.

—2016f. U.S. International Economic Accounts: Concepts and Methods. Available at http://www.bea.gov/international/concepts_ methods.htm as of May 2016.

U.S. Department of Commerce (USDOC), Census Bureau (CENSUS). Value of Construction Put in Place, Not Seasonally Adjusted (2002-2015), available at http://www. census.gov/ as of May 2016.

U.S. Department of Labor (USDOL), Bureau of Labor Statistics (BLS):

—2016a. Consumer Price Index (CPI-U). All urban consumers, U.S. city average, current series (series ID CUUS0000SAT). CPI Databases. 2016. Available at http://www.bls. gov/cpi/ as of May 2016.

—2016b. Employment by Occupation. 2016. Available at http://www.bls.gov/oes/ as of June 2016.

—2016c. Industry Productivity. Labor Productivity and Costs Databases. 2016. Available at http://www.bls.gov/lpc/ as of June 2016.

—2005. Contingent Worker Supplement to the Current Population Survey, 2005. Available at http://www.bls.gov as of June 2016.

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

—2016a. Government Transportation Financial Statistics 2014. Available at http:// www.bts.gov as of December 2016.

—2016b. Transportation Satellite Accounts (TSA). Available at http://www.bts.gov as of May 2016.

—2016c. Industry Profiles: Uses of Transportation. Available at http://www.bts. gov as of October 2016.

—2016d. National Transportation Statistics, Table 3-23. Available at http://www.bts.gov as of May 2016.

—2014. Transportation Services Index and the Economy Revisited, December 2014. Available at http://www.bts.gov as of May 2016.

1 As of 2014, Class I railroads are defined as line-haul freight railroads with annual operating revenues of $475.75 million or more.

2 As measured by the producer price index (PPI).

3 Real dollars are chained dollar estimates, which remove the effects of inflation. Values are converted to chained dollars using the chain-type price index of government transporta- tion consumption and gross investment from the Bureau of Economic Analysis’ National Income and Product Accounts Tables.

4 The Bureau of Labor Statistic’s Producer Price Index (PPI) for transportation equipment (which includes indexes for automobile and light motor vehicles, aircraft, railroad rolling stock, heavy duty trucks, ships and boats, and all transportation equipment) reflects changes in transportation equipment prices faced by transportation service providers. The actual prices transportation service providers pay may differ from the prices sellers receive for the transportation equipment they sell because of government subsidies, sales and excise taxes, and distribution costs.

5 The Consumer Price Index for Urban Consumers (CPI-U) measures the change in prices paid by urban consumers for par- ticular goods and services, such as ones related to transportation.

6 Includes automotive vehicles, parts, and engines; civilian air- craft, engines, and parts; and other transportation equipment.

7 Fuel oil is a petroleum product used, for example in engines.

Updated: Tuesday, June 27, 2017