U.S.-North American Trade & Freight Transportation Highlights

U.S.-North American Trade & Freight Transportation Highlights

Transborder Freight Data

June 2005

In 2004, the value of U.S. merchandise trade with Canada and Mexico rose 13 percent over the previous year's total to an all-time high of $712 billion. Using chained 2000 dollars to adjust for inflation, this trade grew by 8 percent from 2003 to 2004 (table 1 and box 1). Once again, U.S.-North American trade amounted to nearly one-third of total U.S.-international merchandise trade, which reached an historic high of $2.3 trillion in 2004.

This growth in U.S. merchandise trade with Canada and Mexico highlights the growing demands on infrastructure and transportation facilities at key land gateways and the expansion of major transportation corridors traversing our northern and southern borders. In the 10 years following the 1994 inception of the North American Free Trade Agreement, growth in the value of U.S.-NAFTA trade has more than doubled in both current dollars and inflation-adjusted terms (table 1). Last year, land modes (truck, rail, and pipeline) moved freight shipments worth $634 billion across our shared borders with Canada and Mexico, comprising 89 percent of our trade with these two countries (figure 1). Water and air accounted for the rest.

U.S. transborder goods trade, moved by all transportation modes, continues to rebound from the sharp year-on-year declines in 2001 and 2002 (figure 2) triggered by the terrorist attacks of September 11, 2001.

In 2004, both goods trade and gross domestic product (GDP) grew in inflation-adjusted terms. During the past decade, U.S. trade with Canada and Mexico had greater yearly percentage fluctuations than U.S. GDP, in part because of U.S. trade's dependence on economic activity in those countries (figure 2). Since 1990, the value of the freight moved among the three countries averaged over 8 percent per year in both current and inflation-adjusted terms compared with about 7 percent for U.S. goods trade with all countries (table 1).

NOTE: From this point forward in this report all dollars are expressed in current dollars only. For a detailed explanation, please refer to box 1.

Top Trading Partners

Canada has been our number one trading partner for several decades, and Mexico became number two when it surpassed Japan in 1999. Canada and Mexico accounted for 31 percent of all U.S. goods trade in 2004, a decline of almost 1 percentage point from 2003 but up nearly 5 percentage points over 1990 (table 1). Canada accounted for about 19 percent of the value of all U.S. freight trade in 2004 while Mexico accounted for about 12 percent.

U.S. goods trade with Canada in 2004 was up 13 percent - with imports rising by 14 percent and exports by about 12 percent. U.S. goods trade with Mexico grew at a similar pace (13 percent) as imports increased by nearly 13 percent and exports by almost 14 percent. See appendix table A-1.

Modal Perspective

In 2004, land modes of transportation carried the majority (89 percent) of U.S. goods trade with Canada and Mexico, a proportion that has remained stable since 1990 (table 1). Remaining goods were carried by sea, about 6 percent, and by air, 5 percent.

In value terms, land transborder freight increased by 13 percent in 2004 compared to a 4 percent increase in 2003 (figure 3). The value of U.S. land trade with Canada reached $409 billion in 2004, a 13 percent increase compared to a 4 percent increase in 2003. Land trade with Mexico increased to $224 billion in 2004, a 12 percent increase after remaining steady the two previous years.

  • Trucks carried over $453 billion in 2004, up about 12 percent from 2003 (figure 4). Goods exported by truck grew 11 percent while imports by truck grew 14 percent over 2003 totals. Trucks moved more U.S. exports to Canada ($136 billion) than U.S. imports from Canada ($133 billion). By contrast, trucks moved less U.S. exports to Mexico ($79 billion) compared to U.S. imports ($105 billion). Truck exports to Canada rose over 9 percent and to Mexico by 13 percent. Truck imports from Canada grew 14 percent and truck imports from Mexico grew 13 percent.
  • Rail transborder freight climbed to $108 billion in 2004, a 13 percent increase from the previous year. The value of rail exports to Canada grew 12 percent and imports grew by 16 percent. The value of rail exports to Mexico grew 21 percent compared to a growth of 11 percent in 2003. Imports from Mexico grew modestly at just over 2 percent after a decline of 5 percent in 2003.
  • Pipelines carried $39 billion worth of commodities in 2004, a 19 percent rise over 2003. This growth was largely due to a rise in petroleum products trade with Canada. Imports from Canada rose by 17 percent, though less than the 44 percent increase in 2003. Petroleum products trade with Mexico carried by pipelines continued to decline as waterborne vessels carried more of these products.
  • Air cargo trade with Canada and Mexico grew 13 percent in 2004 after declines in 2002 and 2003 (appendix table A-1). Air carriers flew over $32 billion in U.S.-NAFTA trade, handling more exports than imports. In 2004, air trade grew by 11 percent with Canada and 19 percent with Mexico. Exports to Canada by air increased 18 percent in 2004 after a slight increase of 0.4 percent in 2003. Air exports to Mexico rose by 16 percent in 2004 after a decline of similar percentage in 2003. Imports from Mexico by air climbed 23 percent in 2004 after a decline of 14 percent in 2003.
  • Maritime vessels transported over $46 billion in U.S. waterborne imports and exports with Canada and Mexico in 2004, rising by 21 percent from 2003. Over $32 billion of this trade was with Mexico and about $14 billion with Canada. Exports to Canada increased by 18 percent and to Mexico by 12 percent in 2004. Imports grew much faster than exports, increasing by 29 percent with Canada and by 21 percent with Mexico.

Modal Roles by Value and Weight

The modal shares of overall U.S.-NAFTA freight vary depending on the value or weight of the traded goods. In terms of value, trucks transported about two-thirds (64 percent) of the goods in U.S.-NAFTA total trade in 2004 (figure 5). Trucks moved $453 billion ($215 billion of exports and $238 billion of imports) of this trade. Trucking was followed by rail, water, pipeline, and air. Trucks were more dominant in U.S. trade with Mexico, accounting for 69 percent of the value, than in U.S. trade with Canada, accounting for 60 percent of the value.

The relative modal roles are different when U.S.-NAFTA trade is measured by the weight of the transported goods (figure 5). In 2004, water transportation carried more trade in terms of tonnage than any other mode. An estimated 246 million tons traveled over water, accounting for about 39 percent of the weight. Water transportation was followed by truck, rail, pipeline, and air. Water is more dominant in terms of weight because it moves heavy bulk products (e.g., grains and crude petroleum), while higher value-per-ton commodities (e.g., fresh flowers, electrical machinery) are more often moved by air, truck, and rail. Trucks moved an estimated 176 million tons of traded goods with Canada and Mexico, accounting for about 28 percent of the weight of U.S.-NAFTA trade. Modal shares by weight vary by imports and exports. In 2005, trucks moved 21 percent of import tonnage compared with an estimated 45 percent of exports.

Relative roles by weight also vary for U.S.-Canada and U.S.-Mexico trade. For example, in 2004, rail transported about 23 percent of the weight of U.S. trade with Canada but just 16 percent of U.S.-Mexico trade. Water transportation dominated U.S.-Mexico trade with 67 percent of the weight, compared to 26 percent of U.S.-Canada trade -tonnage.

Land Freight by State and Port

The distribution of U.S. trade with Canada and Mexico and the movement of this trade continue to impact the U.S. transportation network, particularly the major border entry points and north-south highway corridors. In 2004, Michigan was the top state for surface trade with about $94 billion followed by Texas with $92 billion and California with $66 billion (table A-2). Together, these top three states accounted for 40 percent of the value of U.S. transborder surface trade - a decrease of 2 percent from the 2003 share.

As mentioned, Michigan and Texas were the border states that handled the most surface freight by value in 2004. And two of the five largest U.S. land ports are in Michigan - Detroit and Port Huron (table A-3). For 2004, these two ports combined handled almost $180 billion of surface trade. This is greater than Michigan's $94 billion of surface trade because these ports serve as trade gateways for all states nationwide.

Texas' three border-crossing ports, Laredo, El Paso, and Hidalgo, also serve as national gateways with $148 billion worth of exports and imports crossing their thresholds on their way to and from Mexico and the 50 states in 2004.

Michigan experienced a growth in the value of trade activity at its two major surface ports and saw a nearly 3 percent increase in trade activity statewide in 2004, after a decrease in trade by the state in 2003. Texas had an increase of 16 percent at the state level in 2004 compared to an increase of just under 3 percent in 2003. Trade passing through Texas' largest port, Laredo, saw an increase of almost 14 percent in 2004 after a decline in trade activity in 2003.

Overall surface trade in 2004 declined in two states, Delaware by a little more than 1 percent and Utah by just over 4 percent, compared to a decline in nine states in 2003. The decline of trade value by the state of Utah was due to a 9 percent decline in Utah-Canada trade. The decline in Delaware can be attributed to a 45 percent decline in trade with Mexico.

Freight Shipments by Commodity and Mode

Just 10 commodities, with shipments valued at $454 billion, accounted for 72 percent of all surface freight in 2004 (table A-4). These top 10 commodities increased 12 percent in value from 2003.

Top Commodities

Ranked by value, motor vehicles and parts was the leading commodity group moved by surface modes in 2004 (figure 6). Over $1 out of every $5 (21 percent) of surface freight shipments between U.S and NAFTA partners involved motor vehicles and parts. Totaling $132 billion, $98 billion (74 percent) was traded with Canada, and $34 billion was traded with Mexico. The dominance of motor vehicles and parts reflects the continued integration of automotive production across the borders of the three countries.

Motor vehicles and parts were the leading commodity in U.S.-Canada surface trade in 2004 and the third leading commodity for U.S.-Mexico surface trade.

Electrical machinery and equipment was the top commodity group traded with Mexico in 2004$57 billion compared to $23 billion with Canada. About 37 percent of this trade with Mexico was exports and 63 percent imports. The reverse is true for U.S.-Canada trade in these goods68 percent was exports and 32 percent imports.

Trucks transported a total of $73 billion of U.S.-NAFTA trade in motor vehicle and parts in 2004. Of this amount, $59 billion was with Canada, and this was almost evenly split between exports and imports. The remaining $14 billion in motor vehicle and parts trade hauled by truck was with Mexico. About 39 percent of this was exports and 61 percent was imports.

Rail hauled a total of $57 billion of automotive goods between the United States and the NAFTA partners. Canada accounted for a total of $37 billion of the rail shipments of which 21 percent were exports and 79 percent were imports. Rail transported a larger share ($20 billion) of the U.S.-Mexican trade in automotive goods than that moved by trucks ($14 billion).

In terms of weight, the top 10 commodities transported by surface modes made up about 67 percent of the tonnage for all land freight trade with Canada and Mexico. The leading commodity by a significant margin is mineral fuels, oils, and waxes (HS 27), which accounted for approximately 29 percent of the freight tonnage moved by land modes between the United States. and NAFTA partners (figure 7).

Motor vehicles and parts is the second most traded commodity by weight with about 7 percent of North American tonnage moved in 2004. Approximately 70 percent of this motor vehicles and parts tonnage is transported on trucks; the remainder is moved by rail.

Commodity by Mode

Truck

Electrical machinery is the leading commodity group by value moved by trucks in U.S.-NAFTA surface trade. Trucks hauled about $56 billion of these goods in U.S.-Mexico trade and about $21 billion in trade with Canada.

While several goods are traded between the United States and the NAFTA partners, just a few commodity groups account for the bulk of the transborder shipments that cross our borders. For example, the top 10 commodities transported by trucks in U.S.-NAFTA trade - with shipments valued at $321 billion - accounted for 71 percent of the total U.S.-NAFTA truck trade. The 10 leading commodities moved by truck in U.S.-Canada trade were valued at $184 billion and represented 69 percent of all U.S.-Canada truck trade. The top 10 commodities traded with Mexico by truck totaled $142 billion or 77 percent of U.S. Mexico truck trade (appendix table A-5-Truck).

Rail

The top 10 commodities moved by rail amounted to $93 billion and accounted for 85 percent of all commodities transported by rail (appendix table a-5-Rail). The top 10 commodities traded with Canada and transported by rail were worth $65 billion while that traded with Mexico were valued at about $30 billion.

Pipeline

Pipelines transported about $39 billion worth of goods in U.S.-NAFTA trade, nearly all of which were mineral fuel and products (appendix table a-5-Pipeline). The majority of this trade was mostly imports from Canada - valued at about $37 billion and weighing 82 million short tons. In contrast, pipelines moved only $87 million in U.S.-Mexico trade and nearly all were exports.

U.S.-NAFTA trade in mineral fuels, oils, and related products (HS 27), transported mostly by pipelines, increased 19 percent overall to $46 billion. This increase was primarily due to imports from Canada, which account for 81 percent of the value of U.S. trade in this commodity with Canada and Mexico.

Air

In 2004, about 70 percent ($23 billion) of the U.S.-NAFTA trade transported by air was with Canada and 30 percent ($9 billion) was with Mexico (appendix table A-5-Air). Similar to the concentration of commodities moved by surface modes, few goods account for the majority of U.S.-NAFTA air cargo. The top 10 commodities moved by air, valued at $30 billion, accounted for 92 percent of air cargo trade. The top commodities traded by air with Canada and Mexico by value were electrical machinery and equipment (HS 85); nuclear reactors, boilers, machinery and parts; and measuring and testing instruments. By weight, the leading commodity group was nuclear reactors, boilers, machinery and parts with about 91,000 short tons.

Vessel

Maritime vessels play a critical role in U.S.-NAFTA trade, carrying over $46 billion worth of trade in 2004. Of this, trade with Mexico ($32 billion) is more than twice that with Canada ($14 billion), particularly for U.S. imports (appendix table a-5-Vessel). Vessel trade remains important for trade in bulk commodities in the Gulf of Mexico, especially petroleum-related products. The top commodity traded by vessel with both Canada and Mexico both in terms of value and weight was mineral fuel, oils, and waxes (HS 27) valued at $32 billion and weighing 157 million short tons.

For Additional Information

More detailed information on the data presented here can be found on the BTS website under International Transportation. To access additional data and documentation from the Transborder Freight Database, including monthly and annual data please visit the following link: http://www.bts.gov/transborder. Other BTS international transportation reports and datasets are available at: http://www.bts.gov/itt.