The Freight Story: A National Perspective on Enhancing Freight Transportation

Efficient, safe, and secure freight transportation helps form the foundation upon which our nation's economic strength rests. Improvements in the efficiency and reliability of freight transportation have been the engine of prosperity and competitive advantage. The cost of moving freight dropped from 16.1 percent of U.S. Gross Domestic Product (GDP) in 1980 to approximately 10.0 percent in 2000 (Figure 1) (Cass Information Systems and ProLogis). Business and consumers benefit from these savings. Every corporate dollar saved in logistics expenditures is available for plant and equipment upgrades, worker training to adapt to changing global markets, basic and applied research and development, and increased equity value. The Journal of Commerce estimates that American households, the ultimate beneficiaries of system improvements, have saved an average of $1,000 annually since 1980 because of reductions in freight logistics costs.

Although efforts to improve freight transportation efficiency and reliability have been successful, the U.S. transportation system is now facing challenges that, unless addressed, may jeopardize its reliability. Allowing transportation system reliability to erode would add additional pressure to U.S. companies operating in an increasingly competitive international market and place more burdens on communities seeking to sustain their economic base and quality of life. Improved logistics has thus far been able to address the corrosive effects of the loss of system reliability. Unfortunately, the ability of logistics to provide additional offsetting savings appears to be nearing its limit, as are the savings attributable to deregulation. Unless these challenges are addressed, more discretionary income will be devoted to moving materials and products, businesses will be constrained in their adoption of innovative strategies to maintain global competitiveness, quality of life—as measured by congestion—will suffer, and safety and security could be jeopardized.

Figure 1. Business Logistics Expenditures as a Percent of U.S. Gross Domestic Product (GDP)

View the data for figure 1 [HTML, Excel 20KB]

These outcomes are not inevitable. The U.S. system of governance, technical know-how, and ability to respond when national goals are threatened are strengths that can be mobilized to address a set of compelling, but manageable, problems.

This report summarizes three years of work conducted by the Federal Highway Administration (FHWA), in cooperation with the U.S. Department of Transportation's (USDOT's) other modal administrations, and the Secretary's Office of Intermodalism. This work involved the development of an integrated freight data and analytical system, called the Freight Analysis Framework (FAF), and extensive outreach to freight stakeholders aimed at improving the understanding of the nature of freight movement, identifying challenges to improving freight productivity and security, and developing strategies to increase freight productivity. This report is not a definitive federal document describing specific approaches to be undertaken or policies to be adopted. Rather, it is a point of departure for further examination of policies, programs, and initiatives that might be undertaken by decisionmakers at all levels of government, in cooperation with the private sector, to meet the challenge of sustaining system reliability and the promise it holds for the nation's future.

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