5-1

CHAPTER 5

Transportation Economics

Highlights• Thedemandfortransportationgrew3.8

percentfrom2014to2015,downfrom4.2percentfrom2013to2014.

• Freighttransportationservices,asmeasuredbythefreightTransportationServicesIndex(TSI),continuetoleadtheeconomy,includingtwoeconomicaccelerationsfollowingtherecession—thefirstfromJune2009toDecember2012andthesecondfromJuly2013toDecember2014.

• OfthetransportationmodesincludedinthefreightTSI,railintermodalgrewthefastestfromJune2009(theendoftheeconomicrecession)toDecember2016,rising50.6percent.

• Employmentinfor-hiretransportationandtransportation-relatedindustriesrosesteadilyfrom2011to2015,to13.6million,exceedingthe2007pre-recessionlevelof13.5million.Employmentthendeclinedin2016to13.0million.

• Totalnationalexpendituresontransportationaccountedforroughly$1,196billionofallpersonalexpenditures,makingitthefourthlargestexpenditurecategory(excludingother)afterhealthcare,housing,andfood.

• Totalgovernmenttransportationrevenuescontinuetofallshortofgovernmenttransportationexpenditures.In2014governmenttransportationrevenuescovered56.7percentofexpenditures.Thegapbetweentransportationrevenuesandexpenditureshasdeclinedsince2009,whenrevenuescovered52.5percentofexpenditures.

• Thetotalcostsfacedbyproducersoftransportationservicesdeclinedduringthe2007to2009recession,andthenclimbedsteadilythrough2014.Theaveragepriceofair,rail,andtrucktransportationservicesdeclinedbetween2014and2016,whilewatertransportationservicepricesrosein2015beforefallingbelowtheir2014levelin2016.

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Chapter 5: Transportation Economics

Transportation Economics TransportationplaysavitalroleintheAmericaneconomy;itmakeseconomicactivitypossibleandservesasamajoreconomicactivityinitsownright,contributingdirectlyandindirectlytotheeconomy.Households,businesses,andthegovernmentdirectlyconsumetransportationgoods(e.g.,vehiclesandmotorfuel)andservices(e.g.,passengerandfreightairtransportation).Transportationindirectlycontributestotheeconomybyenablingtheproductionofgoodsandservices(e.g.,byconnectingproducerstotherawmaterialsforbakingbread,etc.)andemployingworkersintransportationoccupationsinboththetransportationindustryandnon-transportationindustries.Public(government)andprivateexpendituresontransportationfacilities,infrastructure,andsystemscontributetotheeconomybyenablingthemovementofbothpeopleandgoodsdomesticallyandinternationally.Transportationnotonlyenablesinternationaltradebutalsoisamajorgoodandservicetraded.Thefullscopeoftransportation’sroleintheeconomyisavailableinBTS’sTransportation Economic TrendsReport.

Transportation’s Contribution and Role in the Economy

Transportation’s Contribution to GDP

Transportation’scontributiontotheeconomycanbemeasuredbytransportation’scontributiontogrossdomesticproduct(GDP).GDPisaneconomicmeasureofallgoodsandservicesproducedandconsumedinthecountry.ThetransportationcomponentofGDPcanbemeasuredintermsofinvestments

madeandtransportationgoodsandservicesconsumed(collectivelyknownasthedemandfortransportation)orintermsofthetransportationservicesproduced.

In2015thedemandfortransportation($1,477.9billion)included:

1. personalconsumption,suchasvehicleandmotorfuelpurchases($1,020.7billion,69.1percentoftransportationdemand),

2. privatedomesticinvestmentintransportationstructuresandequipment($314.4billion,21.3percent),

3. governmentpurchasesoftransportationgoodsandservices($289.1billion,19.6percent),and

4. netexports(exportsminusimports)relatedtotransportationgoodsandservices(-$146.3billion,-9.9percent)(asmeasuredinchained2009dollars)(figure5-1).

Altogether,thedemandfortransportationaccountedfor9.0percentofU.S.GDP.

Thedemandfortransportationgrewmoreslowly(3.8percent)from2014to2015thanitdidfrom2013to2014(4.2percent),whenthedemandfortransportationreacheditshighestannualgrowthsincetheendoftheDecember2007toJune2009economicrecession.Growthfrom2014to2015fellfromthe2013to2014levelasimportsincreased.Importsoftransportationrelatedgoodsandservicesrosefrom$436.2billionin2014to$467.4billionin2015,whilenetexportsoftransportationrelatedgoodsandservicesfellfromadeficitof$112.1billiontoadeficitof$146.3billion(asmeasuredinchained2009dollars)(figure5-1).

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Transportation Statistics Annual Report

Transportation’s Role in Production

Thecontributionoftransportationtotheeconomyalsocanbefoundbyexaminingtransportation’sroleinproduction.Thetransportationservicesusedtomovewheatfromfarmstomills,flourfrommillstobakers,andbreadfrombakerstogrocerystores,exemplifyhowtransportationenablestheproductionandsaleofnearlyeverythingmadeandconsumedintheUnitedStates.TheU.S.BureauofEconomicAnalysis(BEA)produces

theU.S.Input-Output(I-O)accounts,whichshowtheinputseachindustryusestoproduceoutput,thetypeofoutputproducedbyeachindustry,andthetypesofproductspurchasedbyfinalconsumers.

Withregardstotransportation,theI-Oaccountsshowtheindustriesusingtransportationservicesprovidedbytransportationfirmsonafeebasis,calledfor-hiretransportation,andthecontributionoffor-hiretransportationfirmstotheeconomy.In2016for-hiretransportation

FIGURE 5-1 U.S. Gross Domestic Product (GDP) Attributed to Transportation-Related Final Demand: 1999–2015 (billions of chained 2009 dollars)

-$400

-$200

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

1999 2001 2003 2005 2007 2009 2011 2013 2015

Trans portation services Personal consumption expenditures

Net exports of transportation-related goods and services

Government transportation-related purchases

Private domestic investment

Motor vehicle fuels, lubricants, and �uids

Motor vehicles and parts

NOTES: Total transportation-related final demand is the sum of total Personal consumption of transportation, total Gross private domestic investment, Net exports of transportation-related goods and services and total Government transportation-related purchases. Net exports is exports minus im-ports of civilian aircraft, engines, and parts; automotive vehicles, engines, and parts; and transport. Federal purchases and state and local purchases are the sum of consumption expenditures and gross investment. Defense-related purchases are the sum of transportation of material and travel. The Bureau Economic Analysis has changed the reference year for chained dollar estimates from 1999 onward as part of the comprehensive revision of the national income and product accounts in 2014.

SOURCE: U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts Tables, tables 1.1.6, 2.3.6, 2.4.6, 3.11.6, 3.15.6, 4.2.6, 5.4.6, and 5.5.6, available at http://www.bea.gov/National/nipaweb/SelectTable.asp?Selected=N as of May 2017.

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Chapter 5: Transportation Economics

(includingwarehousing)contributed$562.9billion(3.0percent)toU.S.GDP(currentdollars)[USDOCBEA2017a].Whilefor-hiretransportationcontributeslesstotheeconomythanotherindustries,for-hiretransportationdeliverstherawmaterialsotherindustriesneedtoproducefinishedproductsanddeliverfinishedproductstowholesaleandretailoutlets.

Inadditiontousingfor-hiretransportationservices,manynon-transportationindustriesalsoundertaketransportationactivitiesfortheirownpurposes(calledin-housetransportation),whichtheI-Oaccountsdonotexplicitlyshow.BTSdevelopedtheTransportationSatelliteAccounts(TSAs)toexplicitlyshowin-housetransportationoperationsandtherebyestimatethefullcontributionoftransportationtotheeconomy.1TheTSAsalsoshowthecontributionoftransportationcarriedoutbyhouseholdsthroughtheuseofahouseholdvehicle.

In2015,thelatestyearforwhichcomprehensivedataareavailable,transportation’stotalestimatedcontributionwas$1,033.3billion.For-hiretransportationcontributed$543.2billion(3.0percent)totheU.S.GDPof$18.4trillion.2Transportationservices(air,rail,truck,andwater)providedbynon-transportationindustriesfortheirownuse(in-housetransportation)contributedanadditional$169.9billion(0.9percent).Total

1FormoreinformationabouttheTransportationSatelliteAccounts,seeU.S.DepartmentofTransportation,BureauofTransportationStatistics,Transportation Economic Trends,chapter2,availableat:https://www.bts.gov/con-tent/transportation-economic-trendsasofNovember2017.2TheGDPvalueintheTSAsislargerthantheGDPvaluepublishedintheNationalAccountsbecauseitincludesthecontributionofhouseholdtransportation.Householdtransportationcoverstransportationprovidedbyhouse-holdfortheirownusethroughtheuseofanautomobile.

householdtransportation,measuredbythedepreciationassociatedwithhouseholdsowningmotorvehicles,contributed$320.2billion(1.7percent).Totalhouseholdtransportation’scontributiontoGDPwaslargerthananyoftheothertransportationmodes.Truckingcontributedthesecondlargestamount,at$281.4billion.In-housetrucktransportationoperationscontributed$138.4billion,whilefor-hiretrucktransportationservicescontributed$143.0billion(figure5-2).

Transportationindirectlycontributestotheeconomybyenablingtheproductionofgoodsandservices.Industry Snapshots: Uses of Transportation summarizesthetransportationservicesandrelatedresourcesusedbythesevenmajornon-transportationsectorstoproducetheirgoodsandservices[USDOTBTS2017c].Somesectorsusemoretransportationthanothers.In2015thewholesaleandretailtradesectorusedthelargestamountoftransportationservicesat$270.7billion,followedbytheinformationandservicessectorat$246.7billion,themanufacturingsectorat$202.5billion,andthegovernmentsectorat$136.9billion(figure5-3).

Lookingattheamountoftransportationrequiredtoproduceonedollarofoutputshowshowmuchasectordependsontransportation.In2015thewholesaleandretailtradesectorrequiredmoretransportationservicestoproduceonedollarofoutputthananyothersector.Thewholesaleandretailtradesectorrequired9.0centsoftransportationservicestoproduceonedollarofoutput(4.7centsofin-housetransportationoperationsand4.3centsoffor-hiretransportationservices)in2015(figure5-4).

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Transportation Statistics Annual Report

FIGURE 5-2 Contribution of For-Hire, In-House, and Household Transportation to U.S. Gross Domestic Product (2015 Dollars)

Total for-hire2.96%

Total in-house0.93%

Household1.74% $18.0

$44.8

$95.7

$241.6

$143.0

$3.1

$0.4

$28.1

$138.4

$320.2

$0 $50 $100 $150 $200 $250 $300 $350

Households

Water

Rail

Air

Other

Truck

For-hire In-house Household

All other US GDP 94.37%

Total GDP = $18.4 trillion Total transportation contribution = $1,033.3 billion

NOTES: (a) In-house transportation consists of the services provided by non-transportation industries, including households, for their use. Business in-house transportation includes privately owned and operated vehicles of all body types, used primarily on public rights of way, and the supportive services to store, maintain, and operate those vehicles. Household transportation covers transportation provided by households for their own use through the use of an automobile. (b) For-hire transportation consists of the services provided by transportation firms to industries and the public on a fee-basis. (c) Other for-hire transportation includes: pipeline, transit and ground passenger transportation, including state and local government passenger transit; sightseeing transportation and transportation support; courier and messenger services; and warehousing and storage. (d) Gross domestic product (GDP) increased from value reported by the Bureau of Economic Analysis in I-O use table by total output from the household production of transportation services.

SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Satellite Accounts, available at www.bts.gov, as of May 2017.

FIGURE 5-3 Use of Transportation by Industry, 2015 (current dollars, billions)

Wholesale and retail trade

$270.0

Information and services

$246.7

Manufacturing$202.5

Construction$45.3

Utilities$20.5

Natural resourcesand mining

$38.2

Government$136.9

NOTES: In-house transportation consists of transportation services (air, rail, truck, and water) provided by non-transportation industries for their own use. For-hire transportation consists of the services provided by transportation firms to industries and the public on a fee-basis. Airlines, railroads, transit agencies, common carrier trucking companies, and pipelines are examples of for-hire transportation industries. “Other” for-hire transportation includes: Transit and passenger ground transportation (excluding State and local government passenger transit); Pipeline; Sightseeing transportation and transportation support; Parcel delivery, courier, and messenger services (excluding U.S. Postal Service); Warehousing and storage; and Other transportation and support activities.

SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Satellite Accounts, available at http://www.bts.gov as of May 2017.

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Chapter 5: Transportation Economics

Transportation and Economic Cycles

Transportationactivitieshaveastrongrelationshiptotheeconomy.BTSdevelopedtheTransportationServicesIndex(TSI)tomeasurethevolumeoffreightandpassengertransportationservicesprovidedmonthlybythefor-hiretransportationsector.3BTSresearchshowsthatchangesintheTSIoccurbeforechangesintheeconomy,makingtheTSIausefulpotentiallyleadingeconomic

3FormoreinformationabouttheTransportationServices,seeU.S.DepartmentofTransportation,BureauofTrans-portationStatistics,TransportationEconomicTrends,chapter1,availableat:https://www.bts.gov/content/trans-portation-economic-trendsasofNovember2017.

indicator[USDOTBTS2014].Thisrelationshipisparticularlystrongforfreighttraffic.

Figure5-5illustratestherelationshipbetweenthefreightTSIandthenationaleconomyfrom1970to2016.ThedashedbluelineshowsthefreightTSIdetrendedtoremovelong-termchanges.TheredlineshowsthefreightTSIdetrendedandsmoothedtoeliminatemonth-to-monthvolatility.Thegraybarsrepresenteconomicslowdowns,orperiodswheneconomicgrowthslowsbelownormalratesandunemploymentrisesasaresult.Themarkedpeaksandtroughsshowthatthefreight

FIGURE 5-4 Transportation Required per Dollar of Output by Sector, 2015

Average totalamount required

0

1

2

3

4

5

6

7

8

9

10

Wholesa

le and retail t

rade

Utilitie

s

Natura

l reso

urces a

nd mining

Government

Manufacturin

g

Constructio

n

Leisure and hospita

lity

Profess

ional/ business s

ervices

Other s

ervices

Inform

ation

Educatio

n and health se

rvice

s

Financial se

rvices

Cent

s req

uire

d pe

r dol

lar

outp

ut

In-house air, rail, truck, waterFor-hire air, rail, truck, waterOther for-hire

NOTES: In-house transportation consists of transportation services (air, rail, truck, and water) provided by non-transportation industries for their own use. For-hire transportation consists of the services provided by transportation firms to industries and the public on a fee-basis. Airlines, railroads, transit agencies, common carrier trucking companies, and pipelines are examples of for-hire transportation industries.“Other” for-hire transportation includes: Transit and passenger ground transportation (including state and local government passenger transit); Pipe-line; Sightseeing transportation and transportation support; Courier and messenger services; Warehousing and storage; and Other transportation and support activities.

SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Satellite Accounts, available at http://www.bts.gov as of May 2017

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Transportation Statistics Annual Report

TSIusuallypeaksbeforeagrowthslowdownbeginsandhitsatroughbeforeagrowthslowdownends.

BTSresearchshowstwoeconomicaccelerationsfollowedtheGreatRecession;thefirstfromJune2009toDecember2012andthesecondfromJuly2013toDecember2014[USDOTBTS2017e].ThefreightTSIleadbothoftheseaccelerations;however,therelationshipbetweenthefreightTSIandgrowthcycleschangedsomewhat.ThefreightTSIreachedapeakinDecember2011andturneddownwards12monthsinadvanceofaneconomicdecelerationthatbeganinDecember2012.AfterthepeakinDecember2011,thefreightTSIreachedatroughinOctober2012andturnedupwards.Thetroughinthefreight

TSIinOctober2012occurredbeforethegrowthcyclepeakedinDecember2012,whichmarkedthestartofaneconomicdeceleration.Historically,thefreightTSIhasnothitatroughandturnedupwardsbeforetheonsetofaneconomicdeceleration.TheeconomicdecelerationbeguninDecember2012endedinJuly2013.ThefreightTSIpeakedinDecember2014andturneddownwardsatthesametimeasthegrowthcycle.

TheGreatRecessionfromDecember2007toJune2009separatedtwodistinctperiodsinthegrowthoffreighttransportationservices.ThefreightTSIgrewwellabovethelong-termtrendfromthepre-recessionNovember2004peaktotheJanuary2008peak.Post-recessiongrowthfromtheDecember2011peaktothe

FIGURE 5-5 Detrended Freight TSI, Detrended and Smoothed Freight TSO and Growth Cycles: January 1979–December 2016

Detrended

Detrended and smooth

-15

-10

-5

0

5

10

15

Jan79

Jan82

Jan85

Jan88

Jan91

Jan94

Jan97

Jan00

Jan03

Jan06

Jan09

Jan12

Jan15

detrended and smoothed

Mar-81 Apr-84

Nov-82Oct-85 May-91 Sept-96

Dec-01

May-09

Nov-06

Jan-88

Dec-94

Dec-99

Nov-04Jan-08

Dec-11

Oct-12

Dec-14

NOTE: Shaded areas indicate decelerations in the economy (growth cycles). Detrending and smoothing refer to a statistical procedure that makes it easier to observe changes in upturns and downturns of the data. Detrending removes the long term growth trend and smoothing eliminates month to month volatility.

SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Services Index, available at www.bts.gov as of May 2017.

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Chapter 5: Transportation Economics

December2014peakexceededthelong-termtrendbutlesssignificantlyandshortofthefast-pacedgrowthpriortotherecession.Thistrendcontrastswiththegrowthpatternofgrossdomesticproduct,whichgrewjustasrapidlyfromDecember2011toDecember2014(acompoundannualgrowthrateof2.1percent)asitdidfromNovember2004toJanuary2008(acompoundannualgrowthrateof2.0percent).Thevaryingtrendssuggestthattransportationhasrecoveredmoreslowlythantheeconomyasawhole[USDOTBTS2017f].

Figure5-6showsthechangesinfreightmovementbythetransportationmodesincludedinthefreightTSI.Railintermodal,trucking,andpipelineallhavegrownsteadilysinceJune2009,whereasairfreightandwaterborneshowlittlegrowthafterinitial

recovery.Railintermodal4grewthefastest,rising50.6percentfromJune2009(theendoftheeconomicrecession)toDecember2016.Competitivepricing,trackupgrades,andinvestmentinrailintermodalterminalsandotherinfrastructureallcontributedtotherapidgrowthofrailintermodaltraffic[AAR2016].Truckinggrewthesecondfastestat37.8percent,followedbypipelineat29.6percent,waterborneat23.2percent,andairfreightat21.7percent.Railcarloadsdeclined0.8percentfromJune2009toDecember2016.DatafromRailroads and Coalsuggeststhattheweaknessinrailcarloadshipmentsisduetoaweaknessincoalshipments.TotalcoalshippedbyClassIrailroadspeakedin2008at878.6milliontonsanddroppedto491.7milliontonsin2016 [AAR2010and2017].

4Railintermodalisthetransportingofshippingcontain-ersandtrucktrailersonrailroadflatcars.

FIGURE 5-6 Freight TSI Modal Data, January 2000–December 2016

Air freight

Trucking

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Inde

x va

lue

(bas

e ye

ar 2

000

= 1) Rail intermodal

Rail carloads

Pipeline

Waterborne

NOTE: Data are seasonally adjusted and indexed

SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, seasonally adjusted transportation data, available at www.bts.gov as of May 2017.

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Transportation Statistics Annual Report

Transportation-Related Employment and Wages

Thetransportationandwarehousingsectorandrelatedindustriesemployover13.0millionpeopleinavarietyofroles,fromdrivingbusestomanufacturingcarstobuildingandmaintainingportsandrailroads.Figure5-7showsthenumberandpercentageofworkersemployedbyfor-hiretransportationandtransportation-relatedindustriesintheUnitedStatesfrom1990to2016.In1990,12.3millionworkerswereemployedinfor-hiretransportationandtransportation-relatedindustries.Employmentrosetoahighof13.9millionworkersin2000butdeclinedto13.2millionin2003duetotheMarchtoNovember2001economicrecessionandtotheaftermathofSeptember11,2001.Employmentdeclined

furthertoalowof12.1millionin2010duetothe2007to2009recession.Employmentrosesteadilyfrom2011to2015,risingto13.6millionin2015toexceedthe2007pre-recessionlevelof13.5million.Employmentdeclinedto13.0in2016becausethedeclineintransportationrelatedemploymentmorethanoffsetincreasedemploymentintransportationindustries.ThepercentageofAmericanworkersemployedinfor-hiretransportationandtransportation-relatedindustries,however,hascontinueditsdeclinefrom11.3percentoftheU.S.laborforcein1990to9.0percentin2016.[USDOTBTS2017d]

Thefor-hiretransportationsector(transportationserviceprovidersandwarehousing)isamajorsourceofemploymentintheUnitedStates,employing5.0million

FIGURE 5-7 Employment in Transportation and Transportation-Related Industries in the United States: 1990–2016

Percent of labor force

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

2016

Mil

lion

s

Employment in transportation-related industries

Employment in transportation and warehousing

Percent of total U.S.labor force

SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, National Transportation Statistics, Table 3-23, available at www.bts.gov as of May 2017.

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Chapter 5: Transportation Economics

in2016(figure5-7).Thesector’slaborforcedeclinedduringthe2007to2009recessionandcontinuedtofallthrough2010,afterwhichitrosesteadily.Thesector’slaborforceroseabovethe2007levelin2014andreachedanall-timehighof5.0millionin2016[USDOTBTS2017d].Additionalpersonsworkasindependentcontractorsforprivatetransportationproviders,suchasdriversforindependent,on-demandride-services(e.g.,UberandLyft)butarenotcountedinthetotals(seebox5-A).

Transportationalsoleadstoemploymentinrelatedindustriesthatprovidethegoodsandservicesneededtoproducetransportation.Thesetransportationindustriesincludemotorvehicleandpartsdealers,transportationequipmentmanufacturing,gasolinestations,andpetroleumandcoalproductsmanufacturing.Anotableshiftintransportation-relatedemploymentoccurredbetween1990and2016.From1990through2001,transportationequipmentmanufacturingwasthelargesttransportation-relatedindustry.However,employmentintransportationequipmentmanufacturingdeclined9.0percentduringthisperiod,whileemploymentin

themotorvehicleandpartsdealersindustrygrew24.1percent.Thisledtomotorvehicleandpartsdealersbecomingthelargesttransportation-relatedemployerin2002.Employmentinmotorvehicleandpartsdealersoverallgrewby32.6percentfrom1990to2016,whileemploymentintransportationequipmentmanufacturingdeclined23.9percent(figure5-8).

Workerswithtransportationoccupationsoverallearned,at$30,730,alowermedianwagethanworkersofalloccupations($37,040)in2016[USDOLBLS2017b].Annualwagesearnedbytransportationandtransportation-relatedworkersvarywidelyacrosstransportationoccupations.Forexample,airtrafficcontrollers,airlinepilots,andaerospaceengineersearnedanannualmedianwageofmorethan$100,000in2016,whilethelargesttransportation-relatedoccupation,heavyandtractor-trailertruckdrivers,earnedanannualmedianwageof$41,340.Thetop-fivehighestwagetransportation-relatedoccupationscollectivelyemployfewerworkers(294,660),whilethelowest-fivewageoccupationsemploy3.6timesmoreworkers(1.0million).(figure5-9)

Box 5-A Independent, On-Demand Ride Services EmploymentThelaunchandspreadofindependent,on-demandride-services(seebox2-A),suchasUberandLyft,hascreatednewemploymentopportunitiesintransportation.Personswhoproviderideservicesareconsideredindependentcontractors.IndependentcontractorsarenotcountedinofficialU.S.jobcounts.In2005theBureauofLaborStatistics(BLS)estimatedthere

were403,000independentcontractorsinthetransportationandmaterialmovingoccupationsascomparedto7.8millionworkerswithtraditionalarrangements[USDOLBLS2005].BLSplanstoincludetheContingentWorkerSupplementinthe2017CurrentPopulationSurveytocaptureon-demandservicesemployment.

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Transportation Statistics Annual Report

FIGURE 5-8 Employment in Selected Transportation-Related Industries, 1990 to 2016

0.0

0.5

1.0

1.5

2.0

2.5

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Empl

oym

ent

(mil

lion

s)

Petroleum and coal products manufacturing

Transportation equipment manufacturing Motor vehicle and

parts dealers

Gasoline stations

NOTE: Shaded areas indicate U.S recessions, as defined by the National Bureau of Economic Research.

SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, National Transportation Statistics, Table 3-23, available at www.bts.gov as of May 2017.

FIGURE 5-9 Employment and Wages in Select Transportation and Transportation-Related Occupations, 2016

$89,190$93,350

$109,650$122,410$127,820

$21,730$22,220$22,420$22,830$23,850

$30,150$38,470

$31,180$30,580

$41,340

81,52023,24068,510

8,120113,270

17,300

348,770109,790

426,310

146,350

676,990647,380

858,710

515,020

1,704,520

Transportation, storage, and distribution managersMarine engineers and naval architects

Aerospace engineersAir tra�c controllers

Airline pilots, copilots, and �ight engineers

Parking lot attendantsCleaners of vehicles and equipment

Automotive and Watercraft Service AttendantsDriver/sales workers

Ambulance drivers and attendants, except emergency…

Bus drivers, schoolAutomotive service technicians and mechanics

Shipping, receiving, and tra�c clerksTruck drivers, light or delivery servicesTruck drivers, heavy and tractor-trailer

Top 5 largest employers

Bottom 5 lowest wage

Top 5 highest wage

Number employed Median wage

KEY: SOC = Standard Occupational Classification

NOTE: Transportation and transportation-related occupations from U.S. Department of Transportation, Bureau of Transportation Statistics, National Transportation Statistics, Table 3-24, available at www.bts.gov

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment and Wages, available at http://www.bls.gov/oes as of May 2017.

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Chapter 5: Transportation Economics

Transportation Productivity

Thesizeofthetransportationworkforcedependsonthedemandfortransportationandonfirms’utilizationoftheworkforcerelativetootherinputs,suchascapital,energy,materials,andservices.Economistsmeasurehowefficientlyfirmsuseinputsthrougheconomicproductivity.Economicproductivityistheratiooftotaloutputtotheinputsusedintheproductionprocess.

Productivityincreaseswhenabusinessproducesthesameoutputusingfewer(orlower-cost)inputs.Thebusinessmaythenchoosetoproducemoreoutput,lowerprices,investinthebusiness,orreturnincometoshareholders.

Therearetwomainmeasuresoftransportationproductivity:labor(single-factor)productivityandmultifactorproductivity(MFP).Laborproductivitymeasurestheoutputperunitoflabor

FIGURE 5-10 Labor Productivity Indices for Selected Transportation Industries: 1990–2014 Index, 1990 = 100

50

100

150

200

250

300

19901992

19941996

19982000

20022004

20062008

20102012

2014

Gross output

Labor productivity

Labor hours

Air

50

100

150

200

250

300

19901992

19941996

19982000

20022004

20062008

20102012

2014

Gross output

Labor productivity

Labor hours

Rail

50

100

150

200

250

300

19901992

19941996

19982000

20022004

20062008

20102012

2014

Gross outputLabor productivity

Labor hours

Water

50

100

150

200

250

300

19901992

19941996

19982000

20022004

20062008

20102012

2014

Gross output

Labor productivity

Labor hours

Truck

50

100

150

200

250

300

19901992

19941996

19982000

20022004

20062008

20102012

2014

Gross output

Labor productivity

Labor hours

Transit

50

100

150

200

250

300

19901992

19941996

19982000

20022004

20062008

20102012

2014

Gross output

Labor productivity

Labor hours

Pipeline

NOTE: Data in this figure are not comparable to the data published in previous editions due to change in data used. Labor hours is the total number of number of hours worked by all workers in a sector to produce gross output. Gross output is the total value of goods and services produced by the sector. Gross output includes the value of the goods and services used to produce the sector output. Labor productivity measures a sector’s output per unit of labor input.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics, Major Sector Productivity, http://www.bls.gov as of May 2017.

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Transportation Statistics Annual Report

input,whileMFPmeasurestheoutputperunitasaweightedaverageofmultiplefactors,suchasfuel,equipment,andmaterials.

WhileMFPisamorecomprehensivemeasureofeconomicperformance,laborproductivityiseasiertomeasureandcontinuestohaveabroadappeal.Figure5-10illustrateschangesinlaborproductivityforselectedtransportationsectorsfrom1990to2014.Airtransportationexperiencedthelargestincreaseinlaborproductivityamongall,increasing160.5percent(figure5-10).Airtransportation’slaborproductivitygrewmostnotablybetween2001and2008.Thegainsduringthisperiodcomefromlegacycarriersadoptingaggressivelabor-savinginitiativesandfromlargeoutputgainsamonglow-costcarriers[USDOLBLS2017c].Railtransportationexperiencedthesecondlargestgainsinlaborproductivity,increasingby116.3percent.Thesegainsaretheresultoflabor-savingtechnologiesautomatingoperationalandadministrativetasks[Kriem].Labor-savinginitiativesinairandrailresultedinadeclineinthelaborhoursrequiredtoproduceadollar

ofairandrailtransportationservicesfrom1990to2014.Duringthesameperiod,smallerlaborproductivityincreasesoccurredintruck(32.1percent)andwater(28.9percent).Laborproductivityinpipelinetransportationgrew9.5percentdespitedecliningfrom2000through2014.Laborproductivityintransittransportationdeclined3.0percentduetothetotalamountofhoursrequiredtoproduceoutput(laborhours)risingfasterthanoutput.

Fromtheperspectiveofoutputperunitofmultipleinputs(e.g.,fuel,equipment,andmaterials),airtransportationhadthelargestincreasefrom1990to2014,growing103.5percent(figure5-11).Thegaininairtransportationreflectsan80.1increaseinoutputandan11.5percentdeclineincombinedinputs.Combinedinputsfell,despiteanincreaseincapitalservices,becauseofdeclinesinlaborinputsandintermediateinputs.Theincreaseincapitalservicesandthedeclineinlaborfollowfromtheairtransportationsectoradoptinglabor-savingtechnologies,suchasself-servicekiosks.

FIGURE 5-11 Multifactor Productivity Indices for Selected Transportation Sectors, 1990 to 2014

80

100

120

140

160

180

200

220

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

2014

Mul

tifac

tor p

rodu

ctiv

ity in

dex

(199

0 =

100

)

Air

Rail

Water

Transit

Truck

Pipeline

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics, Major Sector Productivity, http://www.bls.gov as of May 2017.

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Chapter 5: Transportation Economics

WatertransportationexperiencedthesecondlargestincreaseinMFP,growing49.3percentfrom1990to2014,despitedeclining15.2percentfrom1997to2003(figure5-11).TheMFPofrailtransportationgrewsteadilyovertheentireperiodbutmoreslowly,increasing34.2percent.MFPinpipelinetransportationhadasmallerincreaseof31.9percentoverthesameperiodandshowedmoreyear-to-yearvariationthanothermodes.Trucktransportation’sMFPgrewmarginallyat9.8percent,whilethetransitsectorexperiencedadeclineof7.2percent.

Theimpactofproductivityontransportationcompaniescanbeseenthroughchangesinthepricechargedperunitofoutput.Forfor-hirepassengertransportation,theunitofoutputispassenger-miles,andthemeasureofwhattravelerspayistheaveragerevenueperpassenger-mile.Forfor-hirefreighttransportation,theunitofoutputiston-miles,andthemeasureofwhatfreightshipperspayistheaveragefreightrevenueperton-mile.Formodeswhereusersdonottypicallypayperuse,likedrivingapersonalvehicle,completedataaredifficulttoobtain.Increasesinproductivityoftenreducebusinesscosts,whichallowtransportationcompaniestoofferlowerprices.

Figure5-12showsnominalchangesinrevenueperpassenger-milerelativetotheindexforallconsumerexpenditures(CPI)forthreeindustries:domesticaircarriers,commuterrail,andAmtrak/intercityrail.NominalchangesthataregreaterthanchangesintheCPIindicaterealincreasesinrevenue.Amtrak/intercityrailexperiencedthelargestgrowthinrevenueperpassenger-mile,increasing165.8

percentfrom1990to2015(latestavailableyear),whilecommuterrailincreased95.9percentfrom1990to2016.BothAmtrak/intercityrailandcommuterrailexperiencedsteadygrowth.Incontrast,domesticaircarrierrevenueperpassenger-milefellaftertheSeptember2001terroristattacks,begantoriseafterreachingalowin2002,andthenfellagainduringtheGreatRecessiontoits2002levelin2009.Between2009and2014,domesticaircarrierrevenueperpassenger-milerose21.0percentbutthenfell7.3percentbetween2014and2016.

Theincreasesinrevenueperpassenger-milearepartlyduetoanincreaseintheoverallpriceofgoodsandservices.TheCPI,whichmeasuresoverallchangesinprices,increasedby83.6percentfrom1990to2016,indicatingthatAmtrak/intercityandcommuterrailweretheonlyindustrieswithrealincreasingrevenueperpassenger-mileduringtheperiod.

Figure5-13showstheaveragefreightrevenueperton-mileforair,truck,rail,andpipeline.Nominalfreightrevenueperton-mileincreasedforallfreightmodes.Domesticaircarriersexperiencedthelargestincreaseinrevenueperton-mile,increasing145.9percentfrom1990to2014beforefalling11.6percentfromthe2014levelbetween2015and2016.ClassIrailroadsexperiencedasmallerincreaseinrevenueperton-mileof50.1percentinthesameperiodduetoaninitialdecline.

Sources of Economic Growth

TheBEA/BLSIntegratedProductionAccountsshowthecontributionoflabor,capital,andMFPtoeconomicgrowth.Basedontheaccounts,transportation’scontributionhas

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Transportation Statistics Annual Report

FIGURE 5-12 Revenue per Unit of Output for Passenger Transportation Modes: 1990–2016

0

50

100

150

200

250

300

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Pass

enge

r re

venu

e in

dex

(bas

e ye

ar 1

990

= 10

0)

Domestic air carrier

Intercity/Amtrak

Commuter rail

Consumer Price Index

NOTE: Shaded areas indicate U.S recessions, as defined by the National Bureau of Economic Research.

SOURCES: U.S. Department of Transportation, Bureau of Transportation Statistics, National Transportation Statistics, Table 3-20, available at www.bts.gov as of November 2017Air carrier, domestic, scheduled service (passenger): Domestic air carrier revenue includes baggage fees and reservation changes fees.U.S. Department of Transportation, Bureau of Transportation Statistics, Office of Airline Information, TranStats Database, T1: U.S. Air Carrier Traffic and Capacity Summary by Service Class, available at http://www.transtats.bts.gov/DL_SelectFields.asp?Table_ID=264&DB_Short_Name=Air%20Carrier%20Summary as of Aug. 31, 2015 and Air Carrier Financial Reports, Schedule P-1.2, available at http://www.transtats.bts.gov/databases.asp?Mode_ID=1&Mode_Desc=Aviation&Subject_ID2=0 as of November 2017.Commuter rail: 1990-2001: American Public Transportation Association, 2011 Public Transportation Fact Book (Washington, DC: 2011), tables 2 and 42 (passenger fares / passenger-miles).2002-14: U.S. Department of Transportation, Federal Transit Administration, National Transit Database, Data Tables 19 and 26 (Washington, D.C.: Annual reports), available at https://www.transit.dot.gov/ntd as of November 2017.2015-16: U.S. Department of Transportation, Federal Transit Administration, National Transit Database, Annual Data Tables: Service and Annual Database: Fare Revenue, available at https://www.transit.dot.gov/ntdhtm as of November 2017.Intercity / Amtrak: 1990-2002: National Passenger Rail Corporation (Amtrak), Amtrak Annual Report, Statistical Appendix (Washington, DC: Annual Issues) (transportation revenues / passenger-miles).2003-13: Association of American Railroads, Railroad Facts (Washington, DC: Annual Issues), p. 77 and similar pages in previous editions (passenger revenue/revenue passenger-miles).2014-15: Amtrak, Monthly Performance Review for September 2015 (November 13, 2015), Tables A.2-2, A4-2, available at https://www.amtrak.com/ccurl/322/821/Amtrak-Monthly-Performance-Report-September-2015-Preliminary-Unaudited.pdf as of Mar. 28, 2017.Consumer Price Index: U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index-Urban, U.S. All Items Indexes, available at http://www.bls.gov/cpi/ as of November 2017.

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Chapter 5: Transportation Economics

FIGURE 5-13 Revenue per Unit of Output of Freight Transportation Modes: 1990–2016

0

50

100

150

200

250

300

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Frei

ght r

even

ue in

dex

(bas

e ye

ar 1

990

= 10

0)

Domestic air carrier

Class I Rail

Oil pipeline

Truck

NOTE: Shaded areas indicate U.S recessions, as defined by the National Bureau of Economic Research.a For 1990 and later, air carriers that did not report both financial data and all months of traffic data for a given period were excluded from the calcula-tions. Cargo revenue includes both scheduled and charter property revenue and mail revenue.b General freight common carriers, most of which are LTL (less-than-truckload) carriers.

SOURCES: Air carrier, domestic, scheduled service (freight): U.S. Department of Transportation, Bureau of Transportation Statistics, TranStats Database, T-1, Schedule P-11, and Schedule P-12 data, available at http://www.transtats.bts.gov/ as of Sep. 1, 2015, special tabulation.Truck: 1990-2003: Eno Transportation Foundation, Inc., Transportation in America (Washington, DC: 2007), p. 46.2004-07: U.S. Department of Commerce, U.S. Census Bureau, 2009 Transportation Annual Survey (Washington, DC: January 2011), Table 2.1, available at http://www.census.gov/services/ as of Aug. 9, 2011, special tabulation.Class I rail: Association of American Railroads, Railroad Facts (Washington, DC: Annual Issues), p. 34 and similar pages in previous editions.

beensmallerthanothersectors.Priortothe2007to2009economicrecessionandbetween2003and2007,transportation—withanaverageannualgrowthrateof0.14percent—contributedsignificantlylessthanthemanufacturing,service,andfinance—whichallhadaverageannualgrowthratesinexcessof0.50percent(figure5-14).Duringthatperiod,theU.S.economygrewonaverage2.73percentperyear.Duringthe2007to2009economicrecession,almostallsectors,includingtransportation,experiencednegativegrowth.Sincetherecession,transportationhascontributedpositivelytoeconomicgrowth.However,transportation’saverageannualcontributiontoeconomicgrowthof0.06percentfrom2009to2014(thelatestavailable

year)isbelowits2003-2007pre-recessionlevelof0.14percent.

Transportation Expenditures and Revenues

Household Spending

In2016totalnationalexpendituresontransportationbyandonbehalfofU.S.householdsamountedto$1,196billion,makingitthefourthlargestexpenditurecategory(excludingother)afterhealthcare,housing,andfood(figure5-15).Ninety-onepercentofpersonaltransportationexpenditureswenttothepurchase,operation,andupkeepofpersonalvehicles[USDOCBEA2017b].

Between2000and2016,householdtransportationexpendituresincreased42.7

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Transportation Statistics Annual Report

FIGURE 5-14 Sources of Economic Growth: Average Annual Growth Rate by Industry

Total (all industry) 1.79%Services 0.59%

Finance 0.31%Trade 0.26%

Manufacturing 0.20%Information 0.14%

Mining 0.11%Government 0.07%

Agriculture 0.02%Utilities 0.02%Construction 0.01%

Transportation 0.06%

Finance 0.58%Services 0.56%

Manufacturing 0.51%Information 0.32%

Government 0.28%Trade 0.28%

Trans portation 0.14%Mining 0.07%

Utilities 0.02%Agriculture 0.00%

Construction -0.03%

Total (all industry) 2.73%

Government 0.17%Mining 0.17%

Agriculture 0.09%Finance 0.03%Information 0.03%

Utilities -0.05%Transportation -0.11%

Services -0.12%Construction -0.48%

Trade -0.61%

Total (all industry) -1.56%

2007−2009 (Economic Recession)

Manufacturing -0.66%

2003−2007

2009−2014

NOTES: Finance includes: Finance and insurance and Real estate rental and leasing. The service sector includes: Professional and business ser-vices; Education and health services; Leisure and hospitality; and Other services (NAICS 54-81).

SOURCE: U.S. Department of Commerce, Bureau of Economic Analysis, Integrated Industry-Level Productivity Account, http://www.bea.gov as of May 2017.

percent,from$838billionto$1,196billion.Thegrowthintotalexpendituresoutpacedthegrowthintransportationexpenditures,increasing88.8percent,from$6.79trillionto$12.82trillionoverthesameperiod.Expendituregrowthforhealthcare(145.6

percent),housing(93.5percent),andfood(83.5percent)outpacedexpendituregrowthfortransportation.Asaresult,thepercentageoftotalexpendituresfortransportationdeclinedfrom12.3percentin2000to9.3percentin2016.[USDOCBEA2017b]

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Chapter 5: Transportation Economics

FIGURE 5-15 Total National Household Expenditures (major expenditure categories), 2016

$3.18 tri l l ion (24.8%)

$2.73 tri l l ion (21.3%)

$2.35 tri l l ion (18.3%)

$1.48 tri l l ion (11.6%)

$1.20 trillion (9.3%)

$1.14 tri l l ion (8.9%)

$411 bill ion (3.2%)

$342 bill ion (2.7%)

Other expenditures

Health

Housing

Food

Transportation

Recreation

Apparel and services

Insurance and pensions

Expenditures ($12.8 trillion)

NOTES: “Other expenditures” include alcoholic beverages purchased for off-premises consumption; furnishings, household equipment, and routine household maintenance; education; accommodations; financial services (excluding pension funds); other goods and services; net foreign travel and expenditures abroad by U.S. residents; and final consumption expenditures of nonprofit institutions serving households.

SOURCE: U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts Tables, Table 2.5.5, 2.4.5U, available at http://www.bea.gov/iTable/index_nipa.cfm as of August 2017.

Public and Private Sector Expenditures and Revenue

Expenditures

Mostgovernmentspendingontransportationtakesplaceatthestateandlocallevels,althoughstateandlocalcapitalexpendituresareoftenpaidforinpartwithfederalfunds(figure5-16).In2014theFederalGovernmentspent$32.8billionontransportation(excludingfederalgrantstostates),andstateandlocalgovernmentsspent$291.2billion(includingexpenditurespaidwithfederalgrants).Inreal2009dollars,transportationexpendituresatalllevelsofgovernmenthaveincreasedsince2007.From2007to2014,realdirectfederalexpendituresincreasedby10.4percent(from$25.6billionto$28.2billion).Realfederaltransferstostatesincreased10.7percent(from

$48.8billionto$54.1billion),whilerealstateandlocalexpenditures(excludingexpenditurespaidforwithfederalfunds)increasedbyonly1.7percent(from$204.3billionto$207.8billion).Governmentsincreasedtransportationspendingfollowingthe2007to2009recessiontostimulatetheeconomy.In2009theFederalGovernmentenactedtheAmericanRecoveryandReinvestmentActof2009,whichauthorized$48.1billionintransportationstimulusspending.Asaresult,transportationexpendituresbytheFederalGovernment(directfederalexpendituresandfederaltransferstostates)reachedapeakin2010at$85.2billion.

Mostfederalspending(excludingfederalgrantstostates)isforaviation($16.9billionin2014,or51.7percent)followedbywater($8.3billion,or25.3percent)andhighways($3.2

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Transportation Statistics Annual Report

billion,or9.7percent)(figure5-17).Inreal2009dollars,federalhighwaypeakedin2011withtherecessionstimulusspending,andthendeclined.[USDOTBTS2017a]

In2014,moststateandlocalspending(includingexpenditurespaidforwithfederalgrants)ontransportationwenttohighways($203.9billion,or70.0percent)andtransit($59.6billion,or20.5percent)(figure5-18).Inreal2009dollars,bothstateandlocalhighwayandtransitexpenditureshaveincreasedfrom2007to2014—highwaysby2.2percentandtransitby12.0percent.Highwayandtransitspendingpeakedin2009asaresultoftransportationstimulusspending.[USDOTBTS2017a]

In2016privateandpublicspendingontransportationconstructiontotaled$133.2billion(figure5-19).Thepublicsectoristhemajorfundingsourcefortransportationinfrastructureconstruction,especiallyforstreetsandhighways.In2016thevalueofgovernment-funded(public)constructionunderwayaccountedfor90.8percent($120.9billion)oftotalspendingontransportationconstruction,andprivatetransportationconstructionaccountedfortheremaining9.2percent($12.2billion).Approximatelythree-quartersofgovernment-fundedinvestmentwasforhighways($90.5billion);theremaindersupportedtheconstructionofair,land,andwatertransportationfacilities($30.4billion).Investmenthasbeengrowingsince2002

FIGURE 5-16 Federal, State, and Local Government Expenditures, 2007 to 2014 (billions of chained 2009 dollars)

$0

$50

$100

$150

$200

$250

$300

$350

2007 2008 2009 2010 2011 2012 2013 2014

Billi

ons o

f cha

ined

200

9 do

llars

State and local from own funds

Direct federal expenditures

Federal transfers to states

NOTES: Shaded area indicates economic recession.net foreign travel and expenditures abroad by U.S. residents; and final consumption expenditures of nonprofit institutions serving households.

SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, Government Transportation Financial Statistics, available at www.bts.gov.

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Chapter 5: Transportation Economics

FIGURE 5-17 Federal Transportation Expenditures by Mode: 2014 (billions)

$16.92

$8.29

$3.17

$2.81

$1.37

$0.14

$0.06

Air

Water

Highway

Railroads

General support

Transit

Pipeline

Total Federal Transportation Expenditures = $32.7 billion

NOTES: Federal expenditure includes direct federal spending, excluding grants to state and local governments. State and local expenditure includes outlays from all sources of funds including funds from Federal grants.

SOURCE: US Department of Transportation, Bureau of Transportation Statistics, Government Transportation Financial Statistics 2017, available at www.bts.gov as of December 2017.

FIGURE 5-18 State and Local Expenditures by Mode: 2014 (billions)

$203.95

$59.56

$21.65

$6.01

$0.04

$0.02

Highway

Transit

Air

Water

Pipeline

General support

Total State and Local Transportation Expenditures = $291.2 billion

SOURCE: US Department of Transportation, Bureau of Transportation Statistics, Government Transportation Financial Statistics 2017, available at www.bts.gov as of December 2017.

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Transportation Statistics Annual Report

despiteaslightdeclinein2011associatedwiththeterminusofAmerican Recovery and Reinvestment Act of 2009(Pub.L.111–5)stimulusspendingontransportationandaslightdeclinein2016($1.8billiondecreasefrom2015).[USDOCCENSUS2017]

Revenue

Governmenttransportationrevenuecomesfromusertaxesandfees,suchasgasolinetaxesandtolls,airtickettaxesandfees,andgeneralrevenues,aswellasincomefrominvestingtransportationfundsandreceiptsfromfinesandpenalties.In2014governmentrevenuecollectedanddedicatedtotransportationprogramstotaled$355.7billion.Aportionofthisrevenue($183.6billion,or51.6percent)comesfromtaxesandchargesleviedontransportation-relatedactivities,while$172.1billion(48.4percent)comesfromnon-transportation-relatedactivitiesbutsupportstransportationprograms(e.g.,stateorlocalsalesorpropertytaxesusedtofinance

transportationprojects).Inreal2009dollars,totalrevenuecollectedbythegovernmentanddedicatedtotransportationprogramsincreasedby9.9percentfrom2007to2014.[USDOTBTS2017a]

Highwayandairtransportation,whichhavetrustfundssupportedbydedicatedtaxes,accountedfor97.6percentoffederaltransportationrevenuein2014.TheFederalGovernmentcollected$39.1billion(72.1percent)inhighwayrevenues(fromtheHighwayTrustFund)and$13.8billion(25.5percent)inaviationrevenues(almostentirelyfromtheAirportAirwayTrustFund),aswellas$1.3billion(2.4percent)inwatertransportationrevenuesand$0.02billion(0.03percent)inpipelinerevenues (figure5-20).Inreal2009dollars,HighwayTrustFundrevenuesdecreasedby16.9percentfrom2007to2014[USDOTBTS2017a].TheFederalGovernmenthasnotincreasedthefederaltaxesforgasolineanddiesel—18.4centspergallonforgasolineand24.4centspergallon

FIGURE 5-19 Value of Transportation Infrastructure Construction Put in Plan (current dollars): 2002–2016

0

20

40

60

80

100

120

140

160

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Billi

ons

of d

olla

rs

Transportation Construction(Private)

Air, Land, and Water Transportation Construction(Public)

Highway and Street Construction(Public)

SOURCE: U.S. Department of Commerce, Census Bureau, Value of Construction Put in Place, Not Seasonally Adjusted (2002-2016), available at http://www.census.gov/ as of May 2017.

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Chapter 5: Transportation Economics

FIGURE 5-20 Federal Own-Source Revenue by Mode: 2014 (billions)

$39.08

$13.81

$1.29

$0.02

Highway

Air

Water

Pipeline

Total Federal Own-Source Revenue = $54.2 billion

NOTE: Own-source refers to taxes and charges levied on transportation-related activities and used specifically for transportation purposes.

SOURCE: US Department of Transportation, Bureau of Transportation Statistics, Government Transportation Financial Statistics 2017, available at www.bts.gov as of December 2017.

fordiesel—sinceOctober1997,causingrealrevenuestodecline.Revenuesalsodeclinedbecausevehiclegasmileageimprovedoverthelasttwodecadesandbecausevehicle-milestraveleddeclinedduringthe2007to2009recession.

Stateandlocalgovernmentscollected$247.3billionofthe$355.7billiongovernmenttransportationrevenues.Ofthisrevenue,thestateandlocalgovernmentscollected$129.4billionfromtransportation-relatedactivities,mostofwhichisfromhighwayrevenuesources($86.7billion,or67.0percentoftransportationrevenuein2014),whichincludefueltaxes,motorvehicletaxes,andtolls(figure5-21).Aviation-relatedrevenue($19.1billion,14.8percent)comesfromlandingfees,terminalarearentals,andseveralothersources.Transitrevenue($18.8billion,14.6percent)isalmostentirelyfromfares.

Revenuecollectedfromtransportation-relatedactivityanddedicatedtotransportation

programscontinuestofallshortofgovernmenttransportationexpenditures.In2014transportationrevenuescovered56.7percentofexpenditures.Thegapbetweentransportationrevenuesandexpenditureshasdeclinedsince2009and2010,whenrevenuescovered52.5percentofexpenditures[USDOTBTS2017a].Whenrevenuesdonotcoverexpenditures,generaltaxreceipts(e.g.,fromsalesandpropertytaxes),trustfundbalances,andborrowingareneededtocovershortages.

Cost of TransportationThemovementofgoodsandpeoplerequirestheuseofresources—labor,equipment,fuel,andinfrastructure.Theuseoftheseresourcesisthecostoftransportation.Producersandusersoftransportationservicespayfortheresources.Usersoftransportationservicesincludebusinesses,government,andhouseholds.Businessespayfortransportationtoacquireinputsforthegoodstheymakeandtodeliverfinalproductstoconsumers.Households

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Transportation Statistics Annual Report

FIGURE 5-21 State and Local Own Source Revenue by Mode: 2014 (billions)

$19.1

$18.8

$4.7

State fuel tax$36.8

State vehicle tax$28.5

State and local tolls

$15.5Other$5.8

Highway

Air

Transit

Water

$86.7

Total State and Local Own-Source Revenue = $129.4 billion

NOTE: Own-source refers to taxes and charges levied on transportation-related activities and used specifically for transportation purposes.

SOURCE: US Department of Transportation, Bureau of Transportation Statistics, Government Transportation Financial Statistics 2017, available at www.bts.gov as of December 2017.

purchaseresources,suchasmotorvehiclesandmotorvehiclefuel,fortravelbyautomobile.

Costs Faced by Producers of Transportation Services

Therearetwotypesoftransportationservicesprovided:freighttransportationservicesprovidedtoproducersofgoodsandservice(e.g.,truckingandairfreight);andpassengertransportationservicesprovidedtobothproducersandhouseholdconsumers.Themajorinputstoproducetransportationservicesincludetransportationequipment,fuel,labor,othermaterialsandsupplies,aswellasthedepreciationofitemslikeairplanes,trucks,railroadlocomotivesandfreightcars,truckingterminals,andrailroadtrackandotherinfrastructure.Thepriceoftheseinputsimpactsthepriceoffor-hirefreightandpassengertransportationservices.

Thecostsfacedbyproducersoftransportationservicesforpurchasingtransportationequipmentincreasedcontinuouslybetween2004and2016,exceptforautomobilesand

light-dutymotorvehicles(figure5-22).5Thecostsfacedwhenpurchasingautomobilesandlight-dutyvehiclesdeclinedbetween2004and2006,roseslightlyin2008and2009(butremainedbelowits2004level),leveledoffin2010,andfinallyincreasedin2011through2016.Thecostsfacedforrailroad,aircraft,heavy-dutytruck,andshipandboatmanufacturingincreasedmorethanforalltransportationequipmentcombined.Thisincreaseinequipmentpricespotentiallyimpactstheprofitabilityandpurchasedecisionsoftransportationsectors,thetransportationcostsfortransportationusers,and/orpricesinothersectorsthatusetransportationservices,suchaswholesale,retail,andwarehousingandstorageindustries.

5TheBureauofLaborStatistic’sProducerPriceIndex(PPI)fortransportationequipment(whichincludesindexesforautomobileandlightmotorvehicles,aircraft,railroadrollingstock,heavy-dutytrucks,shipsandboats,andalltransportationequipment)reflectschangesintransportationequipmentpricesfacedbytransportationserviceproviders.Theactualpricestransportationserviceproviderspaymaydifferfromthepricessellersreceiveforthetransportationequipmenttheysellbecauseofgovernmentsubsidies,salesandexcisetaxes,anddistributioncosts.

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Chapter 5: Transportation Economics

Transportationfuelpricesalsoimpactthepriceoffreightandpassengertransportationandthedemandfortransportation.Anincreaseinfuelprices,forinstance,mayreducethedemandfortransportationmodesreliantonthatfuelandshiftdemandtotransportationmodesthatuselesscostlyfuels.Averageannualfuelpricesforallclassesoftransportationfuels,exceptaviationgasolineandrailroaddieselfuel,peakedin2012andhavesincedeclined.Theaverageannualfuelpriceforgasolinepeakedat$3.70in2012anddeclined40.4percentto$2.20in2016(figure5-23).Themostrecentdataforaviationgasolineandrailroaddieselfuelshowlittlechangeinpricebetween2012and2014(themostrecentyearforwhichdataareavailable).

Costs Faced by Purchasers of Transportation Services

Thepricesthattransportationcompanieschargefortransportationimpactfreightshippers’andtravelers’transportationdecisions.Despiteperiodsofmodestdecline,businessespurchasingtransportationservicessawanoverallincreaseintherelativepricesforair,rail,truck,water,andpipelinetransportationservicesbetween2004and2016.Duringthattimethecostsfacedbybusinessestopurchaserailservicesgrewby54.7percent,morerapidlythanthatforanyothertransportationmode,exceptpipeline,whichgrew128.1percent.Thecostsfacedtopurchasetruck,water,andairtransportation

FIGURE 5-22 Average Price Change in Purchasing Transportation Equipment Faced by Transportation Providers: 2004–2016

80

90

100

110

120

130

140

150

2004 2006 2008 2010 2012 2014 2016

Inde

x (2

004=

100)

All transportation equipment

Heavy duty truck

Railroad rolling stock

Ship and boat building

Aircraft

Automobile and light truck

NOTE: Annual averages. Rebased to 2004. 2016 data are preliminary and subject to revision. Aircraft are civilian aircraft only. Shaded areas indicate U.S recessions, as defined by the National Bureau of Economic Research.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics, Producer Price Index Industry Data, available at http://www.bls.gov as of May 2017.

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Transportation Statistics Annual Report

FIGURE 5-23 Sales Price of Transportation Fuel to End-Users (dollars/gallon): 1990–2016

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1990 1991 1992 1994 1995 1996 1998 1999 2000 2002 2003 2004 2006 2007 2008 2010 2011 2012 2014 2015

Curr

ent c

dolla

rs p

er g

allo

n

Motor gasoline (all types)

Jet fuel keroseneRailroad fuel (diesel)

Diesel no. 2

Aviation gasoline

NOTE: Aviation and railroad fuel data through 2014. Shaded areas indicate U.S recessions, as defined by the National Bureau of Economic Research.

SOURCE: All data except railroad fuel: U.S. Department of Energy, Energy Information Administration, Monthly Energy Review (Washington, DC: April 2016), tables 9.4 and 9.7, available at http://www.eia.doe.gov/emeu/mer/prices.html as of May 2017.Railroad fuel: Association of American Railroads, Railroad Facts (Washington, DC: Annual Issues), p. 61.

servicesalsoincreased,withtruckingservicesgrowingataslightlyslowerrate(27.4percent)thanwater(29.9percent)andair(33.9percent).Transportationservicepricesdeclinedduringthe2007to2009recession,afterwhichtheyclimbedsteadilythrough2014.Theaveragepriceofair,rail,andtrucktransportationservicesdeclinedbetween2014and2016,whilewatertransportationservicepricesrosein2015butthendeclinedbelowthe2014levelin2016(figure5-24).

Costs Faced by Households

Thecostshouseholdsfacefortransportationservices(e.g.,airtravel)andgoodsusedfortransportation(e.g.,motorvehiclefuel)impacthouseholds’spendingdecisions.MostpassengertravelintheUnitedStatesisbypersonalmotorvehicle.Thecostofowning

andoperatingpersonalmotorvehiclesimpactshouseholdtravelbehavior—whatmodehouseholdschoose,howoftentheytravel,andhowfar.

Thecostofowningandoperatingapersonalmotorvehicleincludesinsurance,license,registration,taxes,depreciation,andfinancecharges(ownershipcosts)aswellasgasoline,tires,andmaintenance(operatingcosts).In2015itcost57.1¢permiletoownandoperateapersonalmotorvehicle.Ownershipcostscontinuetoaccountfornearlythree-fourthsofthetotalannualcostofowningandoperatingapersonalmotorvehicleonacents-per-milebasis.Lookingatoperatingcosts,thecostofbothgasoline(thelargestoperatingcost)andmaintenancegrewfrom1990through2015,whilethecostoftiresrosefrom1990through2003,declinedin2004,andthenincreased

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Chapter 5: Transportation Economics

FIGURE 5-24 Average Changes to Transportation Prices Faced by Businesses Purchasing Transportation Services: 2004–2016

80

100

120

140

160

180

200

220

240

2004 2006 2008 2010 2012 2014 2016

Inde

x (2

004=

100)

Air

Truck

Rail

Water

Pipeline

NOTE: Annual averages. Rebased to 2004. Shaded areas indicate U.S recessions, as defined by the National Bureau of Economic Research.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics, Producer Price Index Industry Data, available at http://www.bls.gov as of May 2017.

slightlybetween2008and2015.Inthemostrecentyears,theaveragetotalcostofgasolinepermilefellfromahighof14.5¢permilein2012to8.5¢in2015.Thisdeclinecontributedsignificantlytothesteadydeclineintheaveragetotalcostofowningandoperatingapersonalmotorvehicle(assuming15,000vehicle-milesperyear),whichpeakedat60.8¢in2012andfellto57.1¢permilein2015(figure5-25).

AccordingtotheConsumerPriceIndexforUrbanConsumers(CPI-U)6,theaveragepriceofowningandoperatingapersonalmotorvehicle(privatetransportationintheCPI-U)

6TheConsumerPriceIndexforUrbanConsumers(CPI-U)measuresthechangeinpricespaidbyurbanconsumersforparticulargoodsandservices,suchasonesrelatedtotransportation.

rose59.5percentbetween1990and2016,albeitlessthanforallgoodsandservices(83.6percent).Ofpersonalmotorvehicleownershipandoperatingcosts,motorvehicleinsurancepricesincreasedthemostbetween1990and2016,growing175.0percent.Theaveragepriceofnewvehiclesgrewtheleast,increasingonly21.4percentoverthesameperiod.[USDOLBLS2017a]

Thetotalaveragepriceofowningandoperatingapersonalmotorvehiclegrewless(at59.5percent)thantheaveragecostofpublictransportation(86.1percent)between1990and2016[USDOLBLS2017a].Theriseinairfareandintracitytransportationpricesdrovethegrowthinpublictransportationpricesbetween1990and2016(figure5-26).

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Transportation Statistics Annual Report

FIGURE 5-25 Average Cost of Owning and Operating an Automobile (assuming 15,000 vehicle-miles per year): 1990–2015

0

10

20

30

40

50

60

70

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Cent

s per

mile

(cur

rent

dol

lars

)

Ownership costs

Gasoline

Maintenance

Tires

NOTE: Figure reflects the average cost of operating a vehicle 15,000 miles per year in stop and go conditions. Ownership costs include insurance, license, registration, taxes, depreciation, and finance charges.

SOURCE: American Automobile Association, Your Driving Costs (Heathrow, FL: Annual Issues), available at http://www.aaapublicaffairs.com as of August 2016.

FIGURE 5-26 Average Changes to Transportation Prices Paid by Urban Consumers: 1990–2016

0

50

100

150

200

250

1990 1993 1996 1999 2002 2005 2008 2011 2014

Inde

x (1

990=

100)

Airline fare

Other intercityAll items

Intracity transportation

Personal motor vehicle

NOTE: Annual averages. Rebased to 1990. Shaded areas indicate U.S recessions, as defined by the National Bureau of Economic Research.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index (CPI-U) Data, available at http://www.bls.gov as of May 2017.

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Chapter 5: Transportation Economics

Transportation as a Component of International Trade

Transportation and Trade

TransportationenablestheexportofAmericangoodsandservicesandconnectsU.S.businessestosourcesofrawmaterialsandconsumerstoimportedgoods.AnefficientandreliabledomestictransportationsystemwithgoodconnectionstotheinternationaltransportationsystemsupportstheUnitedStatesintheglobalmarketplace.Transportationnotonlyenablesinternationaltradebutalsoisamajorgoodandservicetraded.

Thevalueofgoodstraded(thetotalvalueofexportsandimports)was$3.7trillionin2016(currentdollars).Afteraccountingforinflation,therealvalueofgoodstradedgrewfrom2000to2016,despiteaslightdeclineduringthe2007to2009recession.Exportsaccountfor

anincreasingshareofthetotalvalueofgoodstraded,butimportsingoodscontinuetoexceedexports.In2016thegoodsdeficit(exportsminusimports)was$749.9billionincurrentdollars[USDOCBEA2017e].

In2016,18.6percent($683.1billion)ofallgoodstradedinternationallywererelateddirectlytotransportation.7Fueloilcomprisedanadditional1.4percentofallgoodstradedin2016[USDOCBEA2017d].Acrossallgoodstradedrelatedtotransportation,newandusedpassengercarsaccountedforthelargestshare.In2016importsoftransportation-relatedgoodsexceededexportsexceptforcivilianaircraft,aircraftenginesandparts,andfueloil8(figure5-27).

7Includesautomotivevehicles,parts,andengines;civil-ianaircraft,engines,andparts;andothertransportationequipment.8Fueloilisapetroleumproductused,forexample,toheathomes.

FIGURE 5-27 U.S. Trade of Transportation-Related Goods: 2016

-200,000 -100,000 0 100,000 200,000

Fuel oil

Other transportation equipment

Aircraft engines and parts

Civilian aircraft, complete, all types

Other parts and accessories

Engines and engine parts

Trucks, buses, and special purpose vehicles

Passenger cars, new and used

Exports less imports

Exports

Imports

Total Export of Transportation-Related Goods = $276,169 billionTotal Import of Transportation-Related Goods = $406,944 billion

Millions of current dollars

SOURCE: U.S. Department of Commerce, Bureau of Economic Analysis, International Transactions (ITA), Table 2.1 U.S. International Trade in Goods. Interactive, Annual. Available at http://www.bea.gov/itable/ as of May 2017.

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Transportation Statistics Annual Report

TransportationservicesareusedtomovegoodsfromandtotheUnitedStates.In2016,$1.8trillion(14.5percent)ofallservicestradedwererelateddirectlytotransportation[USDOCBEA2017c].Thevalueoftransportationservicestradedcaptures:

1. passengerfarespaidbyU.S.residentstoforeignairlinecarriersandforeignvesseloperatorsaswellasthepassengersfarespaidbyforeignresidentstoU.S.airlinecarriersandU.S.vesseloperators,

2. thefreightchargesformovinggoodsfromandtotheUnitedStates,and

3. theexpensesthattransportationcompaniesincurinforeignports(i.e.,goodsandservicesprocuredbyforeigncarriersinU.S.portsandbyU.S.carriersinforeignports)[USDOCBEA2017f]

ThefaresandfeesreceivedbyU.S.carrierstomovegoodsandpeopletoforeigncountries

exceedsthefaresandfeesreceivedbyforeigncarriersbringinggoodsandpeopletotheUnitedStates.However,since2007theamountreceivedbyforeigncarriersforbringinggoodsandpeopletotheUnitedStatesaccountsforanincreasingshareoftotalfaresandfeespaidtomovegoodsandpeopletoandfromtheUnitedStates[USDOCBEA2017c].

AirpassengertransportationaccountedforthelargestshareofthetotalfaresandfeespaidtomovegoodsandpeopletoandfromtheUnitedStates,followedbyseafreighttransportation.Forallmodesexceptseafreighttransportation,thefaresandfeespaidtomovegoodsandpeopletoforeigncountriesnearlyequaledthefaresandfeesreceivedbyforeigncarriersbringinggoodsandpeopletotheUnitedStates.Forgoodsmovedbysea,thefaresandfeesreceivedbyforeign-operatedvesselstobringgoodstotheUnitedStatesexceededthefaresandfeespaidtomovegoodstoforeigncountries(figure5-28).

FIGURE 5-28 U.S. Trade of Transportation ServicesTotal Export of Transportation Services = $84,633 billionTotal Import of Transportation Services = $97,174 billion

Millions of current dollars-60,000 -40,000 -20,000 0 20,000 40,000 60,000

Other modes of transport

Air (port services)

Air (freight)

Air (passenger)

Sea (port services)

Sea (freight)

Exports less imports

Exports

Imports

NOTE: Port services are 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), excluding purchases of fuel which are counted in the goods exports and imports account.

SOURCE: U.S. Department of Commerce, Bureau of Economic Analysis, International Transactions (ITA), Table 3.1 U.S. International Trade in Goods. Interactive, Annual. Available at http://www.bea.gov/itable/ as of May 2017.

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Chapter 5: Transportation Economics

ReferencesAmericanAssociationofRailroads(AAR):

—2017.ClassIRailroadStatistics,May2017.Availableathttps://www.aar.org/Documents/Railroad-Statistics.pdfasofMay2017

—2016.RailroadIntermodalKeepsAmericaMoving,May2016.Availableathttps://www.aar.org/BackgroundPapers/Rail%20Intermodal.pdfasofOctober2016.

—2010.ClassIRailroadStatistics,May2010.Availableathttp://ntl.bts.gov/lib/33000/33400/33488/AAR_Stats_2010_0524asofMay2016.

U.S.DepartmentofCommerce(USDOC),BureauofEconomicAnalysis(BEA).

—2017a.GDP-by-Industry.ValueAddedbyIndustry.Interactive,Annual.April21,2017release.Availableathttp://www.bea.gov/iTable/index_industry_gdpIndy.cfmasofMay2017

—2017b.GDPandPersonalIncome.PersonalConsumptionExpendituresbyTypeofProduct,table2.5.5U.Interactive,Annual.April29,2017release.Availableathttp://www.bea.gov/iTable/index_nipa.cfmasofMay2017.

—2017c.InternationalServices.Table3.1U.S.TradeinServicesbyTypeofService.Interactive,Annual.Availableathttp://www.bea.gov/itable/asofMay2017.

—2017d.InternationalTransactions(ITA).Table2.1U.S.InternationalTradeinGoods.Interactive,Annual.Availableathttp://www.bea.gov/itable/asofMay2017.

—2017e.NationalIncomeandProductAccounts(NIPA).Table1.1.5GrossDomesticProduct;Table1.1.6RealGrossDomesticProduct,ChainedDollars.Interactive,Annual.Availableathttp://www.bea.gov/itable/asofMay2017.

—2017f.U.S.InternationalEconomicAccounts:ConceptsandMethods.Availableathttp://www.bea.gov/international/concepts_methods.htmasofMay2017.

U.S.DepartmentofCommerce(USDOC),CensusBureau(CENSUS).ValueofConstructionPutinPlace,NotSeasonallyAdjusted(2002-2015),availableathttp://www.census.gov/asofMay2017.

U.S.DepartmentofLabor(USDOL),BureauofLaborStatistics(BLS):

—2017a.ConsumerPriceIndex(CPI-U).Allurbanconsumers,U.S.cityaverage,currentseries(seriesIDCUUS0000SAT).CPIDatabases.Availableathttp://www.bls.gov/cpi/asofMay2017.

—2017b.EmploymentbyOccupation.Availableathttp://www.bls.gov/oes/asofMay2017.

—2017c.Russell,Matthew.“Economicproductivityintheairtransportationindustry:multifactorandlaborproductivitytrends,1990–2014,”MonthlyLaborReview,March2017.Availableathttp://www.bls.gov/asofMay2017.

—2005.ContingentWorkerSupplementtotheCurrentPopulationSurvey,2005.Availableathttp://www.bls.govasofJune2016.

U.S.DepartmentofTransportation(USDOT),

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Transportation Statistics Annual Report

BureauofTransportationStatistics(BTS):

—2017a.GovernmentTransportationFinancialStatistics2017.Availableathttp://www.bts.govasofDecember2017.

—2017b.TransportationSatelliteAccounts(TSA).Availableathttp://www.bts.govasofMay2017.

—2017c.IndustryProfiles:UsesofTransportation.Availableathttp://www.bts.govasofMay2017.

—2017d.NationalTransportationStatistics,

Table3-23.Availableathttp://www.bts.govasofMay2017.

—2017e.FreightbyModeSincetheRecession,NewsReleaseBTS39-17,August7,2017.Availableathttp://www.bts.govasofSeptember2017.

—2017f.Long-TermGrowthinFreightTransportationServices:MethodsandFindings,forthcoming.

—2014.TransportationServicesIndexandtheEconomyRevisited,December2014.Availableathttp://www.bts.govasofMay2017.