Chapter 7 - Economic Growth

Chapter 7 - Economic Growth

Introduction

Transportation is a vital component of the U.S. economy. It not only enables most economic activity, but is a sizable portion of the country's Gross Domestic Product. As such, transportation employs millions of people and consumes a large amount of the economy's goods and services. About one-fifth of household spending is on transportation. Transportation is also an important element of federal, state, and local government revenues and expenditures. For instance, the federal government's motor fuel tax collected about $19 billion from households in 1999, an average of $185 per household. In addition to discussing the size of transportation in the economy, transportation employment, fuel taxes, and transportation spending by households, this chapter presents data on labor productivity, gasoline prices, highway capital stocks, and international trade.

Demand for transportation-related goods and services represents more than one-tenth of the U.S. economy and supports one in eight jobs. These goods and services encompass a whole range of activities from vehicle production and automobile insurance to road building and public transportation. The amount of goods and services produced by each worker, measured in dollars per hour of work (labor productivity), has increased markedly in most sectors of transportation over the past 45 years. In the rail industry, productivity gains have been particularly strong since deregulation in 1980. On average, a worker in the rail industry now produces more than three times as much as in 1980. This increased labor productivity has made transportation less expensive for consumers.

Households spent on average $7,400 on transportation in 2000, nearly 20 percent of that year's average household expenditures. This amount is second only to the amount they spent on housing. The vast majority of household spending on transportation goes for vehicle purchase, operation, and maintenance. Transportation expenditures have not increased as fast as vehicle-miles traveled per household. Household spending on transportation, of course, varies according to a number of factors, including age and location. For example, people in the western states spent more than those in any other region.

International trade is a growing part of the U.S. economy. The lowering of trade tariffs via the Free Trade Agreement of 1989 with Canada and the North American Free Trade Agreement (NAFTA) of 1993 have contributed to the increasing importance of North American trade. Canada has been and remains the top trading partner of the United States. In 1999, Mexico surpassed Japan to become America's second largest trading partner. Still, trade with other countries remains very important. About 67 percent of foreign trade in 2000 was with countries other than Canada and Mexico. The vast majority of these goods are transported by ship. International waterborne trade has, therefore, grown along with international trade, while domestic waterborne transportation over the past 15 years has stayed relatively constant.

Transportation Demand in GDP Growth

Purchases of transportation-related goods and services accounted for 10.7 percent of the Gross Domestic Product (GDP) in 2000, or $1,054 billion (table 1) [1]. This broad measure, called transportation-related final demand, reflects all consumer and government purchases of goods and services and exports related to transportation. The list of purchases is diverse and extensive, including vehicles, parts, engines, fuel, maintenance, and auto insurance.

The share of transportation-related final demand in GDP has fluctuated slightly between 10.5 percent and 11.0 percent from 1975 through 2000. Only housing, health care, and food accounted for greater shares of GDP in 2000 (figure 1).

Source
1. U.S. Department of Transportation, Bureau of Transportation Statistics, 2001, based on data in U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current Business (Washington, DC: Various issues).

Transportation-Related Employment by Industry

Employment is an important indicator of economic growth and social well-being. At the beginning of 2001, more than 10 million people were employed in for-hire transportation, vehicle manufacturing, and related industries, such as automobile sales and repair. These jobs accounted for about 7.4 percent of total civilian employment. By the end of 2001, however, these jobs accounted for 7.3 percent (see box). The automotive dealers and service station industry has been the largest employer among transportation-related industries since the late 1980s, followed by transportation equipment manufacturing, trucking and warehousing, air transportation, and auto repair and parking services (figure 1).

Transportation-related industry employment data, how.ever, do not include transportation occupations in nontransportation industries, such as truck drivers working for wholesale and retail stores. Based on data from the U.S. Department of Labor's Bureau of Labor Statistics, the Bureau of Transportation Statistics estimated that in 2000 nontransportation industries employed about 2.7 million people in transportation occupations, such as truck drivers, bus drivers, and driver/sales workers; about 2.2 million in transportation-supporting occupations, such as travel agents, cargo and freight agents, and transit and rail police; and about 3.8 million in material-moving occupations, such as freight movers, truck loaders, and longshoremen. When these components are included, total transportation and related employment in 2000 would have accounted for 14 percent of employment, or one out of every seven U.S. civilian jobs [1].

Source
1. U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Indicators (Washington, DC: April 2002).

For-Hire Transportation Industry

The for-hire transportation industry contributed $314 billion to the U.S. economy in 2000 (table 1). Its share in the Gross Domestic Product (GDP), however, has declined from 4.4 percent in 1960, to 3.6 percent in 1975, to 3.2 percent in 2000 (measured in current dollars) [1]. Many factors may explain this change, including the growth of in-house trucking services by companies that are not in the transportation business (e.g., grocery store chains) and a U.S. economy that is becoming increasingly service oriented.

Of all for-hire transportation industries, trucking and warehousing and air transportation contributed the largest share to U.S. GDP. In 2000, trucking and warehousing and air transportation contributed $126 billion and $93 billion, respectively. Together, they accounted for more than two-thirds of transportation GDP. Not surprisingly, air transportation had the highest growth rate followed by transportation services over the 1960 to 2000 period (figure 1). The trucking and warehousing industry experienced considerable growth from 1975 to 1985. While its growth rate declined from 1986 to 1995, it has picked up again since 1996 [1].

Source
1. U.S. Department of Commerce, Bureau of Economic Analysis, "Gross Domestic Product by Industry," available at http://www.bea.doc.gov/bea/dn2.htm, as of November 2001.

Transportation Labor Productivity

For the last 25 years, transportation has been one of the leaders in U.S. productivity growth. As shown in figure 1, U.S. business sector productivity, measured in real output per employee, grew 46 percent between 1975 and 1999. In contrast, several transportation modes had much higher growth rates over this period. For example, between 1975 and 1999, railroad labor productivity grew 294 percent; for-hire trucking grew 105 percent; air transportation grew 95 percent; and pipeline grew 65 percent. In recent years, however, labor productivity growth in the trucking industry and air transportation flattened out. When compared with the economy as a whole, labor productivity in the railroad and pipeline industries continues to increase at a faster rate, while the bus mode fluctuates from year to year [1]. Data for water transportation are not available, because the Bureau of Labor Statistics (BLS) does not currently produce this series. The Bureau of Transportation Statistics is working with BLS to initiate data collection for this mode.

Deregulation, technological change, and labor force reductions have all contributed to higher labor productivity in transportation. Specifically, air transportation labor productivity increased .because of the introduction of larger and faster aircraft, computerized passenger reservation systems, the hub-and-spoke flight network, and changes in requirements for flight personnel. In the railroad industry, consolidation of companies, more efficient use of equipment and lines, increased ton-miles, and labor force reductions have played a role.

Source
1. U.S. Department of Labor, Bureau of Labor Statistics, Office of Productivity and Technology, "Historical Indexes of Output per Employee, All Published Industries, Productivity Trends for Transportation Industries," available at ftp://ftp.bls.gov/pub/special.requests/opt/dipts/oaehaiin.txt, as of October 2001.

Consumer Prices for Transportation

Improvements in transportation labor productivity have made transportation less expensive for consumers. Since 1978, transportation prices increased less than those for other major consumer expenditure categories. For example, the price for the same amount of goods or services increased 172 percent for housing and 322 percent for health care between 1978 and 2000 (figure 1). By comparison, the overall price of trans.portation increased 148 percent. In more recent years, from 1994 to 2000, price inflation for transportation was the lowest among the four major consumer expenditure categories.

Within transportation, the price for consumer-operated transportation (e.g., private passenger car transportation) increased more slowly than for purchased transportation services. Between 1978 and 2000, the price of consumer-operated transportation increased 139 percent, while the price of purchased transportation services increased 307 percent (figure 2).

Gasoline Prices

Fuel prices tend to fluctuate, affecting both individual consumers and industry. The average price of motor gasoline in the United States peaked in 2000 at $1.67 per gallon in June but hit a low of $1.56 in August. In 2001, the average price peaked at $1.81 in May. Although these fuel prices were far below record highs in real terms, the rapid rises attracted consumer attention and affected the profitability of transportation industries, whose profit margins, on average, have been less than 7 percent in the past few years [1].

One important factor underlying the volatility of motor gasoline price in the United States is the relative insensitivity of consumption to price changes (figure 1).1 Thus, the price of motor gasoline is almost completely, at least in the short run, dependent on supply. A small shortage in supply would cause a large increase in price, while a small surplus in supply would cause a large decrease in price.

In the latter half of 2001, due to the already slowing U.S. economy and particularly the reduction in some travel after the September terrorist attacks, demand for gasoline fell short of its anticipated level. This, in turn, resulted in a short-run gasoline supply surplus. Gasoline prices reacted instantly, falling from $1.61 per gallon in September to $1.44 per gallon in October 2001.

The Bureau of Transportation Statistics has developed a method for measuring the impact of fuel price changes on the transportation industry. This analysis, based on fuel cost per dollar of net output, shows that higher fuel prices in 2000 impacted the railroad, transit, air, and trucking modes more than they did water transportation and pipelines. For instance, higher prices in 2000 cost railroads and transit an estimated additional 11 cents to produce $1 of net output, while the additional costs for water transportation and pipelines were 3 and 0.5 cents, respectively (figure 2) [2, 3, 4].

1A Bureau of Transportation Statistics analysis in 2000 concluded that the price of motor gasoline has to increase 14 percent for a 1 percent reduction in motor gasoline consumption to occur in the United States.

Sources
1. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current Business, various issues.
2. ____. "Gross Domestic Product by Industry," October 2000.
3. U.S. Department of Transportation, Bureau of Transportation Statistics, estimates based on U.S. Department of Energy, Energy Information Administration, "Energy Consumption by Transportation Sector," monthly reports, 2001.
4. ____. U.S. Transportation Satellite Accounts for 1996, data, available at http://www.bea.doc.gov/bea/dn2. htm, as of May 2001.

Household Spending on Transportation

Households spend more money, on average, on transportation than any other expenditure category except housing. In 2000, households spent about $7,400 on transportation, or 19.5 percent of their total spending (table 1). This share was about the same as in 1984 (the first year for which data are available). Roughly 94 percent of household transportation expenditures in 2000 went to purchase, maintain, and operate cars and other private vehicles. Purchased transportation services, including airline, intercity train and bus, and mass transit, accounted for less than 6 percent of household transportation expenditures that year (table 2).

Measured in constant 1982 dollars, household transportation expenditures increased almost 17 percent between 1984 and 2000 (figure 1). During the same period, vehicle-miles traveled per household increased about 28 percent, indicating that transportation has become cheaper to consumers.

Household transportation expenditures vary by region (table 3). Households in the western part of the country spent more on transportation in 2000 than did households in the three other regions.1 However, five years earlier, households in the Midwest were spending more. Transportation expenditures in the Northeast have always been the lowest both in terms of total amount and share of household spending. A reason for this phenomenon is that households in the Northeast are more reliant on public transportation. In 2000, for instance, households in the Northeast spent an average of $600 or 9 percent of their transportation expenditures on public transportation. This compares with $283 (4 percent) in the South, $403 (5 percent) in the Midwest, and $527 (7 percent) in the West [1].

Spending on transportation differs among rural and urban households as well. During much of the 1990s, rural households, on average, spent more on transportation than urban households. In 2000, for instance, average urban household transportation expenditures were $7,410, while those of rural households were $7,467 [1].

Not surprisingly, the age of the head of the household also has an impact on transportation spending (see figure 2). Household transportation expenditures rise as the age of the head of the household increases, peaking between 45 and 54 years of age and then decreasing. In 2000, for example, households in which the head of the household was between 45 and 54 years of age spent, on average, $8,827 on transportation, while households in the under 25 years of age bracket spent about 60 percent of that amount. Spending on transportation was lowest ($2,875) in households headed by people 75 years of age or older. However, transportation as a share of total household expenditures was highest in young households, averaging 23 percent. The percentage decreased gradually as age increased, reaching its lowest point at 13 percent for households in the 75 years and over age bracket.

Half of the transportation expenditures in young households were to purchase vehicles, compared with 39 percent for households in the oldest age group. Moreover, younger households spent a smaller share of transportation expenditures on purchased transportation services, such as air travel, mass transit, and taxi fares [1].

1The regional comparisons here and the following urban/rural and age group comparisons have not been tested for statistical significance.

Source
1. U.S. Department of Labor, Bureau of Labor Statistics, "Consumer Expenditure Survey," 2000, available at http://www.bls.gov, as of April 2002.

Government Transportation Revenues and Expenditures

Each year in the United States, federal, state, and local governments collect various transportation revenues-usually in the form of taxes-and spend these revenues to improve their transportation systems.1 In 2001, the Bureau of Transportation Statistics (BTS) concluded a study of government transportation financial statistics covering fiscal years 1985 to 19992 [1].

According to the BTS study, the inflation-adjusted transportation revenues of all governments totaled $118.9 billion in 19993 ($126.9 billion in current dollars), an increase of 64 percent since 1985 (table 1). Between 1985 and 1999, states collected most of the revenues (47 percent, on an annual average basis), followed by the federal government (34 percent) and local governments (19 percent). Revenues of the federal government, however, grew the fastest (90 percent). But much of this growth occurred from 1997 to 1999, partly a consequence of changes in federal management of transportation funds required by the Transportation Equity Act of the 21st Century. Between 1985 and 1999, local government revenues grew 69 percent and state revenues, 42 percent.

On a modal basis, revenues vary by mode and annually (figure 1). Highways, for instance, generated the most revenues between 1985 and 1999, while pipeline revenues made up less than 1 percent of the total. Federal and state motor fuel taxes and state motor vehicle taxes were the most important sources of revenues for the highway mode, averaging 80 percent of highway collections from 1985 through 1999. Federal passenger and local airport charges are the major sources of revenues for air, also averaging 80 percent. The bulk of transit revenues (56 percent) were raised through local transit charges, with 30 percent coming from the transit account of the Highway Trust Fund and 14 percent from state transit charges. Local government water charges (44 percent),4 federal water receipts (41 percent),5 and state water charges (15 percent) were the main sources of water mode revenues.

Railroad activity also generates government revenues, but because the revenues are not specifically earmarked to fund transportation programs, they are not treated as transportation-related revenues [1]. For instance, federal taxes on rail fuel are put into the U.S. general fund and hence are not treated as transportation revenues. In addition, state and local taxes on rail property (and the property of other modes) are not treated as transportation-related revenues, because the amount of these revenues that may be used for transportation projects is not known. Amtrak, the national passenger railroad service, is not an entity of the federal government; as such, its revenues are not considered government transportation revenues.

In 1999, transportation-related spending by all levels of government reached $144.9 billion ($154.8 billion in current dollars), an increase of 35 percent over 1985 (table 2). These transportation expenditures represented about 5 percent of total government spending. State and local spending (of their own funds) together amounted to $103.6 billion in 1999 and experienced higher growth (53 percent) than did federal spending from 1985 to 1999.

During the 1985 to 1999 period, almost two-thirds (61 percent, on average) of total government transportation spending was on highways (figure 2). Rail and pipeline, meanwhile, accounted for less than 1 percent each.

State and local governments' own transportation revenues are augmented annually by federal grants. Between 1985 and 1999, these grants remained almost constant, increasing only about 4 percent to $26.3 billion. A major share (76 percent, on average) of the federal grants went to highways, followed by transit (17 percent) and air (6 percent). Less than 1 percent of the federal grants were used for water, rail, and pipeline programs during the same period.

Per capita revenues and expenditures differ substantially at the state level. In 1999, for instance, per capita revenues fluctuated from $155 in South Carolina to $772 dollars in the District of Columbia, while per capita expenditures ranged from $288 in South Carolina to $2,054 in the District of Columbia (see map 1 and map 2). Most states raised more and spent more per capita on transportation activities in 1999 compared with 1985.

1Transportation revenues include money received by the government from transportation-related taxes, user charges, or fees earmarked to fund transportation-related expenditures. The following types of receipts are not counted as transportation revenues: 1) taxes collected from users of the transportation system that go into a general fund; 2) nontransportation-related general fund revenues that are used to finance transportation activities; 3) proceeds from borrowing, whether short term or long term; and 4) proceeds from the sale of investments and the payment of loans.

2 1999 is the latest year for which the data from all three levels of government were available.

3 The data presented here are in chained 1996 dollars, unless otherwise noted.

4 Local and state water charges include, for example, canal tolls and user fees for commercial or industrial water transport and port terminal facilities.

5 Federal water receipts include, for example, amounts received from harbor maintenance user fees, St. Lawrence Seaway toll charges, inland waterway fuel taxes, excise taxes, the Oil Spill Liability Trust Fund, the Offshore Oil Pollution Fund, and the Deep Water Port Liability Fund.

Source
1. U.S. Department of Transportation, Bureau of Transportation Statistics, Government Transportation Financial Statistics 2001, available at http://www.bts.gov, as of July 2002.

Fuel Tax Revenue

Over half of the revenue for the Highway Trust Fund (HTF), which provides funding for surface transportation, comes from federal motor fuel taxes paid by households (figure 1 and box). In 1970, for example, households paid $8.5 billion (chained 1998 dollars) in federal motor fuel taxes, accounting for about 50 percent of HTF revenue. By 1999, the share of federal motor fuel taxes paid by households increased to 58 percent of the HTF, or $18.8 billion.

Households paid an average of $185 each in 1999 in federal fuel taxes, nearly six times the amount they did in 1966, when measured in current dollars (figure 2a). However, when the effect of inflation is removed, federal motor fuel taxes paid by the average American household increased by only 31 percent between 1966 and 1999 (figure 2b), while household real disposable income rose by 64 percent. Hence, the share of federal motor fuel tax in household disposable income decreased from 0.37 percent in 1966 to 0.29 percent in 1999 (figure 3).

Improvements in automobile fuel economy were largely responsible for the slower growth of household motor fuel consumption and hence household expenditures on the motor fuel tax relative to the growth of household income and travel demand. Between 1966 and 1999, vehicle-miles traveled per household increased 77 percent, while motor fuel consumption per household increased only 21 percent.

Highway Capital Stocks

Through decades of public and private investment, the United States has developed a large and extensive transportation system that is an important component of our national wealth and a contributor to productive capacity. Currently, however, adequate economic data on transportation infrastructure and vehicle capital stocks are only available for highways, although an effort is underway to expand knowledge in this area (see box).

In 2000, the accumulated public capital stock in highways and streets was valued at $1.4 trillion (current dollars). From 1988 to 2000, the value (in chained 1996 dollars) of highway capital stock increased by 25 percent. More dramatic increases in the value of highway capital stock occurred between 1953 and 1971 when the Interstate system was under development. Figure 1 shows the growth pattern in public capital in highways and streets between 1925 and 2000. Since the early 1970s, the value of highway vehicle stocks has grown much faster than the value of highway capital stocks, indicating that highways support much more rolling stock today than they did 20 years ago.

International Trade

Continuing growth of international trade is influencing the development of transportation systems and services within the United States. Increased international merchandise trade has spurred the development of marine and air cargo facilities, land border crossings, and domestic access infrastructure to connect international gateways with domestic U.S. origins and destinations. New technologies, including intelligent transportation systems, facilitate lower transportation costs and higher levels of service and speed.

Between 1997 and 2000, U.S. international merchandise trade rose 28.2 percent to $2 trillion (current dollars). Canada continued as the number one overall trade partner of the United States in 2000, a position that country has held for decades. Meanwhile, Mexico held steady in the number two position for the year, after surpassing Japan in 1999. In 2000, 10 nations accounted for almost 70 percent of all U.S. merchandise trade, and 5 of these were Asian Pacific countries (figure 1). Despite the recession in East and Southeast Asia in 1997, the overall U.S. trade relationship with many countries in the Pacific region expanded between 1998 and 2000.1

In 2000, higher value manufactured goods dominated U.S. trade, accounting for $1,704 billion (85 percent) of the value of all merchandise trade. Motor vehicles, electrical machinery and appliances, office machines (including computers and other automated data processing equipment) were among the top U.S. import and export commodities when measured by value. Transportation equipment was one of the leading U.S. manufactured exports, accounting for $43 billion in 2000. Agricultural goods accounted for approximately 5 percent of the value of U.S. international trade, and Japan was the top market for U.S. agricultural exports. Canada and Mexico were also leading purchasers and suppliers of U.S. agricultural commodities. Mineral fuels accounted for about 7 percent of the value of U.S. international trade in 2000; the majority of this trade was U.S. imports of crude petroleum and related products. Canada was the leading supplier of petroleum products to the United States in 2000, followed by Venezuela and Saudi Arabia.

Between 1997 and 2000, the relative roles of the transportation modes in carrying U.S. international trade were in flux due to the continuing growth in trade within North America and internationally. During this period, the value of U.S. international trade carried by truck increased 33 percent to $429 billion, air freight expanded 37 percent to $593 billion, while waterborne trade grew by approximately 18 percent. Despite the smaller relative increase in waterborne trade during this time, about $740 billion of U.S. exports and imports moved by this mode in 2000, accounting for about 37 percent of the value of all U.S. international trade (table 1).

By value, Japan was the leading U.S. maritime trade partner in 2000, representing over one-sixth of all U.S. waterborne trade. The ports of Los Angeles and Long Beach accounted for the majority of West Coast trade and also represented in 2000 over one-quarter of the value of overall waterborne trade for the United States (table 2).

Waterborne trade accounts for a higher percentage of U.S. international trade tonnage compared with other modes. The top four U.S. maritime trade partners by weight-Mexico, Venezuela, Canada, and Saudi Arabia (table 3)-are also the top four crude oil suppliers to the United States. Other major crude oil suppliers-Nigeria, Colombia, and the United Kingdom-are also among the top 10 maritime trade partners by weight. Houston and other Gulf Coast ports accounted for the majority of U.S. international waterborne tonnage, a large component of which is the trade of bulk commodities and crude petroleum.

Growth in air cargo, especially of high-value, time-sensitive commodities, continued into 2000. Lower shipping costs and more frequent service have made air cargo a major factor in the way global business is conducted. Air cargo is carried both by all-passenger carriers as well as air freight carriers, including integrated express carriers, such as Federal Express, United Parcel Service (UPS), DHL, Airborne Express, CF/Emery, Burlington and others. Air freight accounted for approximately 30 percent (by value) of U.S. international trade in 2000. Japan was the leading trade partner for U.S. air freight, followed by the United Kingdom and Germany (figure 2). New York's John F. Kennedy (JFK) International Airport was the leading gateway for international air shipments, accounting for $132 billion in 2000. Following JFK were San Francisco, Los Angeles International Airport, and Chicago.2

See box for International Trade Data.

1U.S. overall merchandise trade with many Asian Pacific countries fell between 1997 and 1998 due to the region's recession. However, by 1999, trade with many of these same countries had risen to or exceeded the 1997 levels. Some of this trade growth was due to the expansion in imports from these countries, as these goods became relatively cheaper due to shifts in currency exchange rates.

2 San Francisco includes the San Francisco International Airport and other smaller regional airports. Chicago includes O'Hare, Midway, and other smaller regional airports.

NAFTA Trade

The United States, Mexico, and Canada have signed two free trade agreements: the Free Trade Agreement in 1989 and the North American Free Trade Agreement (NAFTA) in 1993. Both agreements have led to the gradual reduction of tariffs on goods. These agreements have brought the share of U.S. merchandise trade with Canada and Mexico, now our two largest trading partners, to about 33 percent-Canada accounts for 20 percent and Mexico, 12 percent-in 2000.

Since NAFTA went into effect, the value of U.S. trade with Canada and Mexico has risen 91 percent in current dollars, from $343 billion to $653 billion (figure 1). In addition to the trade agreements, several other factors contributed to this increase, including the sustained economic expansion in the United States, U.S./Canada and U.S./Mexico exchange rates, and changes in industry manufacturing and distribution patterns.

Motor vehicles, parts, and accessories dominate NAFTA trade by value, as North American automobile manufacturing is increasingly integrated across the three countries. Other leading commodities traded among NAFTA partners are consumer electronics, telecommunications equipment, petroleum and petroleum products, and aircraft equipment and parts [1, 2].

In 2000, trucks transported about 66 percent of the value of NAFTA merchandise trade, a share that has remained relatively constant since 1997. Rail accounted for about 14 percent of the share, and air and water modes accounted for approximately 7 and 5 percent, respectively. In recent years, trade by air has grown more rapidly than the other modes [3].

Six ports account for 64 percent of all North American trade by land, with Detroit, Michigan, and Laredo, Texas, handling the majority of trade on each U.S. border (figure 2). Trucks carry most of the trade at each of these ports, and the number of trucks entering at these border gateways has increased, in some cases, substantially (table 1). The origins and destinations of the trucks crossing at a particular port are often outside of the port state. For example, over 70 percent of the shipments that cross through the ports of Laredo and Buffalo have their respective origins or destinations outside of Texas or New York.

Ten U.S. states accounted for about two-thirds of the value of North American land trade in 2000 (table 2).1

1State origins and destinations are based on official U.S. international trade statistics. Because of the way these data are collected, some border state activity may be overrepresented.

Sources
1. U.S. Department of Commerce, U.S. Census Bureau, Foreign Trade Division, FT920 U.S. Merchandise Trade: Selected Highlights, December 1994 (Washington, DC: 1994).
2. ____. FT920 U.S. Merchandise Trade: Selected Highlights, December 1999 (Washington, DC: 1999).
3. U.S. Department of Transportation (USDOT), Bureau of Transportation Statistics (BTS), special tabulation, August 2001, based on the following: USDOT, BTS, Transborder Surface Freight Data; and Source 2 above.

U.S. Waterborne Trade

U.S. domestic waterborne trade was fairly stable from the mid-1980s until the 1990s, when U.S. coastal trade (i.e., domestic traffic over the ocean or the Gulf of Mexico) declined due to a decrease in Alaskan crude oil shipments. Internal U.S. trade, which occurs on U.S. rivers and waterways, varies monthly (figure 1). In 2000 when measured by tonnage, petroleum and petroleum product inland waterway shipments were down 5.3 percent and food and farm products were up 18.1 percent over 1999 levels. Coal shipments were down 1.7 percent over this period [1].

From 1999 to 2000, U.S. foreign waterborne trade increased 9.6 percent by value to total $737 billion and 2.4 percent by weight (to 1.2 billion metric tons) (figure 2). Liner service carried the largest share of this trade by value (65.7 percent) in 2000. However, by volume, tanker service had the largest share (51.9 percent) [2].

Sources
1. U.S. Army Corps of Engineers, Navigation Data Center, "Internal U.S. Waterway Monthly Tonnage Indicators," available at http://www.iwr.usace.army.mil/ndc/wcsc.htm, as of Oct. 30, 2002.
2. U.S. Department of Transportation, Maritime Administration, U.S. Foreign Waterborne Transportation Statistics, available at http://www.marad.dot.gov/statistics/usfwts/index.html, as of Sept. 7, 2001.