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Demographic and Economic Trends | Goods Movement | Finance | Highway | Transit

Demographic and Economic Trends

The population over the age of 65 will comprise roughly 21 percent by 2050; which will double current population levels and impact travel demand for all modes.
Vehicle growth has far outpaced the growth in population, employment, and households, more than tripling in the last four decades. Together these changes have combined to fuel an immense growth in mobility.
On average, the typical American now travels about 14,500 miles annually including 4,900 miles on long-distance trips each year.
Over twenty-two percent of people aged 65 and older report having a transportation disability – meaning that they reduce their travel, need to ask others for rides, or limit driving to daytime. Nearly four percent of people below the age of 65 report having a transportation disability.
Immigration is at the highest level it has ever been in the U.S. Over fifteen million new immigrants have entered the U.S. since 1990. The immigrant population in the U.S. reached a new record of 35.2 million in 2005, over 12 percent of the population.
If current trends in immigration continue, by 2050 the current 658 billion person miles of travel generated by the immigrant population will increase to 2.1 trillion, and VMT would triple to just over 1 billion immigrant miles per year by 2050.
Nineteen percent of new immigrants do not have a household vehicle as compared to 13 percent of immigrants in the U.S. for 11 or more years. The average percentage of U.S.-born households without a vehicle is just under eight percent.
Texas, Florida, California, Arizona, Georgia and North Carolina will account for 63 percent of all projected added VMT by 2030.
California, Texas and Florida combined for 42 percent of the nation's numerical population increase between 2002 and 2003.
America faces the prospect of extensive population growth over the next 50 years, estimated to reach 420 million by the most current Census projections. Much of that growth will come about by the in-migration of adults of working age rather than births as in the previous half century, with therefore vastly different transportation demand attributes.
In 1960 America had 34 areas with populations over a million. That number grew to 50 million plus agglomerations in 2000 and to 53 in 2005. By 2020 it is estimated that there will be approximately 60 such areas and that they will house at least 60 percent of the nation’s population.
About one-third of “metropolitan” growth since 1980 has been in rural counties that are incorporated from the fringe of metropolitan areas.
Personal income influences travel behavior through vehicle ownership, mode choice, trip purpose, and the number and length of trips.
There are only about 25 percent of the households in the U.S. with a vehicle deficiency, that is, more adults in the household than vehicles. This may temper future growth in automobile ownership even as personal income levels continue to increase.
Historic trends show that while work travel has kept pace with the growth in employment, shopping and social/recreational travel has doubled in the last four decades.
Commuting contributes heavily to peak-period congestion. Eighty-five million workers – two-thirds of all commuters in the United States – usually leave for work between 6:00 and 9:00 am, and over 88 percent of these workers commute in private vehicles.
Commercial Vehicle Miles Traveled (VMT), freight and especially light-duty commercial vehicle travel, is increasing at a faster rate than household VMT. The distribution of e-commerce goods to households and businesses is poised to create a huge new demand on the transportation system.
Historically, enhanced communication with distant people and information about distant places has generally led to more travel. Growing Internet services to aid recreational activities, in addition to ticket purchase and travel/sightseeing planning are likely to induce greater recreational travel.

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Goods Movement

The growth in international trade has greatly strained the country's domestic transportation system, especially sections of the highway and rail systems that were built over 50 years ago.
In terms of volume, international trade is handled through a limited number of gateway seaports, located mostly in congested urban areas. Capacity at these ports is becoming severely constrained.
Since 1970 the U.S. economy has seen exports double. Imports, measured against the value of Gross Domestic Product, tripled.
On a typical day, about 43 million tons of goods, valued at about $29 billion, moved nearly 12 billion ton-miles on the nation's interconnected transportation network.
Between 1980 and 2002, the number of freight trucks in the U.S. increased from 5.8 million to 7.9 million, and the average distance traveled by commercial trucks increased from 19,000 miles per truck to 27,000 miles per truck.
In 2005, the nation’s freight railroads operated 140,810 miles of rail lines, employed 182,000 people, and reported $47.88 billion in revenue.
The demand for freight rail service has grown steadily over the last decades and is projected to increase 69 percent by tonnage and 84 percent by ton-miles between 2005 and 2035.
The U.S. freight-rail system has four tiers of freight railroads: Class I railroads are railroads having 2005 revenues at or greater than $319.3 million. The Class II regional railroads operate at least 350 miles and have annual revenues greater than $40 million, but less than the Class I threshold. Class III railroads are all railroads not qualifying as Class I or II railroads. They include short line railroads providing local line-haul services, and switching and terminal operations railroads.
Today’s railroad system is about half the size of system that existed in the early 1900s. Many railroads have cut back the number of track-miles they operate—mostly through abandonment and spin-offs of low-volume and less profitable lines to short line railroads—to create a core system that can be maintained and operated profitably.
From 1995 through 2004, the rail industry reinvested 17.8 percent of revenue into capital spending, compared to an average of 3.5 percent for all other United States industries.
Recent cargo growth projections for container ports anticipate a doubling or tripling of throughput growth in the next 15 to 20 years.
Electronic, electrical, and office equipment was the leading commodity, comprising 11 percent of all freight shipped, up from 9 percent in 1993. An estimated $948 billion worth of this top commodity group was shipped, and an 80-percent increase in this commodity group since 1993.
From 1993 to 2002, mixed freight shipments grew the fastest in value, increasing from $207 billion to $858 billion, at 17 percent annually. The next fastest was pharmaceuticals, which grew from $163 billion to $427 billion—an 11 percent annual rate.
Compared to other weight categories, smaller sized shipments (less than 500 pounds) increased the most (56 percent) by value between 1993 and 2002. This faster growth of smaller shipments supports efficient just-in-time inventory systems, which reduce inventory carrying costs and overall logistics costs.
Large-size shipments (over 50,000 pounds) comprised nearly two-thirds (65 percent) of the ton-miles of Commodity Flow Survey shipments in 2002. Because of their weight, these shipments placed high demand on the transportation network, generating more than 2 trillion ton-miles.
In 2002, trucks hauled about 64 percent of the value, 58 percent of the tonnage, and 32 percent of the ton-miles of total shipments. Measured by ton-miles, trucking was followed by rail at 28 percent and water and pipeline with 16 percent each. In general, trucking dominated shipment distances of less than 500 miles while rail dominated the longer distance shipments.
From 1993 to 2002, value of goods moved by truck increased to $6.7 trillion—up from $4.7 trillion. During this same period, truck ton-miles grew by 56 percent while rail ton-miles increased by 30 percent and water declined by 7 percent.
Air freight is growing rapidly as U.S. businesses seek timely delivery of valuable goods, creating greater demand for truck and intermodal services as well. Air's share of all commercial freight activity in the United States for 2002: Value—7.4%; Weight—0.1%; Ton-miles—0.3 percent. In 2002, air freight shipments were valued at over $770 billion, nearly double the $395 billion total for 1993.
Rail carries bulk goods, perishables, and time-sensitive goods such as machinery, automobiles, and parts and over long distances. Rail's share of all commercial freight activity in the United States for 2002: Value—3.7%; Weight—12.0%; and Ton-miles—27.8%. The relatively low value of shipments made by rail compared to other transportation modes reflects the large quantities of low value-per-ton goods like coal, ores, and grains.
Pipeline transportation is critical to the U.S. economy because energy derived from piped crude and petroleum products is consumed at nearly every stage of goods and services production. Pipeline's share of all commercial freight activity in the United States for 2002: Value—2.7%; Weight—10.5%; Ton-miles—16.7%. The role of pipelines is likely to remain critical as freight transportation demand increases.
Maritime transportation carries over three-quarters of the weight of all U.S. international freight. Water's share of all commercial freight activity in the United States for 2002: Value 8.3%; Weight—14.8%; Ton-miles—16.3%.
Imports from Asia through all coasts and borders are forecasted to increase from 114 million tons worth $351 billion in 2002 to 484 million tons worth $2.6 trillion in 2035.
The possible shift of Asian imports from West Coast to East Coast due to increased trade with India would place additional demands on eastern ports and congested freight facilities, but provide only modest relief to western ports.
Current truck size and weight regulations are a complex combination of Federal and State regulations. Federal law controls maximum gross vehicle weights and axle loads for trucks operating on the Interstate System. Current Federal weight limits are 80,000 pounds gross vehicle weight, 20,000 pounds on a single axle, and 34,000 pounds on a tandem axle group.
Overloaded trucks contribute to the wear and tear of highway infrastructure and to the costs of maintaining infrastructure in a good State of repair.
The Railroad Rehabilitation and Improvement Financing Program authorizes the Federal Railroad Administration to approve up to $35 billion in loans and loan guarantees for freight rails roads to acquire, improve, or rehabilitate intermodal and rail facilities, refinance outstanding debt, or develop new intermodal or railroad facilities, with up to $7 billion reserved for projects benefiting freight railroads other than Class I carriers.

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Finance

The Federal motor fuel tax was implemented in 1932. Initially receipts accrued to the General Fund, and were appropriated by Congress. With the passage of the Federal-Aid Highway Act and Highway Revenue Act of 1956, Federal motor fuel tax revenues were earmarked for roadway spending only.
The Federal Highway Trust Fund (HTF) was established by the Highway Revenue Act of 1956 for the direct purpose of funding the construction of an Interstate System and aiding in the financing of primary, secondary, and urban routes. At the time, this Act increased the tax on gasoline. Each time the Congress has extended the HTF, it has also extended the Federal excise tax on gasoline.
The Federal motor fuel tax remained at four cents per gallon from 1960 to 1982, when Congress passed the Surface Transportation Act. This legislation raised the gas tax to nine cents per gallon and split receipts into two accounts. One cent of the gas tax as placed in the newly established Mass Transit Account and the remainder directed to the Highway Trust Fund.
Total Federal highway Trust Fund receipts in 2001 were $32.7 billion, received from the following sources: gasoline tax 61.5%, diesel and special motor fuel taxes 24.8%, gasohol 6.4%, trucks and trailers 4.6%, heavy vehicle use 1.8%, tires 0.9%.
After many years of steady growth Federal and State gas tax, receipts reach a plateau in the late 1990s. Federal gas tax revenues rose from $125 million in 1932 to a high of $21.2 billion in 1999. That level declined to $21.0 billion in 2000 and $20.6 billion in 2001.
According to American Association of State Highway and Transportation Officials (AASHTO), a 10 cent increase in the Federal fuel tax would merely restore the purchasing power of the Federal fuel tax to its 1993 level.
Since 1992, the state of Florida has annually adjusted its gas tax according to the percentage change in the average of the Consumer Price Index issued by the U.S. Department of Labor.
Oregon became the first state to enact a gas tax in 1919. By 1929 all other U.S. states followed suit. Since 1933 state fuel tax revenues have risen from $518 million to approximately $31.8 billion in 2001.

Current Federal fuel taxes and rates are as follows in 2007

Fuel	Tax Rate
Gasoline	18.4 cents / gallon
Diesel	24.4 cents / gallon
Special fuels	18.3 cents / gallon
Gasohol	18.4 cents / gallon
Liquefied petroleum gas	13.6 cents / gallon
Liquefied natural gas	11.9 cents / gallon
M85 (from natural gas)	9.25 cents / gallon
Compressed natural gas	48.54 cents / thousand cubic feet

Source: Office of Highway Policy Information, FHWA

While the Federal government plays an important role in highway funding, States own and operate all federally funded roads.
In 2004, $145.3 billion was generated for all Federal, State, and local government spending on highways and bridges. Approximately $83 billion (57.1 percent) was attributable to highway-user charges, such as motor-fuel taxes, motor-vehicle taxes and fees, and tolls. The remaining $62.3 billion (42.9 percent) came from a number of sources, including property taxes and assessments, other dedicated taxes, general funds, bond issues, investment income, and other miscellaneous sources.
Highway-user charges including motor-fuel taxes, motor-vehicle taxes and fees, and tolls differ widely among the different levels of government. In 2004, highway-user charges accounted for 92.4 percent of highway revenue at the Federal level, 70.8 percent at the State level, and only 6.9 percent at the local government level.
Transit funding comes from two major sources: public funds allocated by Federal, State, and local governments; and system-generated revenues earned for the provision of transit services. In 2004, $39.5 billion was available from all sources to finance transit investment and operations. Federal funding was $7.0 billion, State funding was $7.8 billion, local funding was $13.7 billion and system-generated revenues were $11.1 billion.
Federal funding for transit comes from the general revenues of the U.S. Treasury and fuel tax revenues deposited to the Mass Transit Account (MTA) of the Highway Trust Fund (HTF). Eighty-two percent of the transit funds authorized for transit by SAFETEA-LU ($37.2 billion) will be derived from the MTA.
In 2004, 51.8 percent of highway capital outlay went for system rehabilitation, while 39.1 percent went for system expansion.
Highway Statistics 2005 reported that the Highway Trust Fund had a balance of $12.5 billion at the end of FY 2005, a $9.7 billion decline from 2002.
As a result of recent Federal revenue and expenditure trends, the Highway Account of the Highway Trust Fund is projected to reach a negative balance in 2009 and the Mass Transit Account balance begins to decline in 2008.
Between 2001 and 2004, outlays from the Highway Trust Fund exceeded receipts by two to four billion dollars each year.
In 2004, approximately 49 percent of transportation bonds issued by state governments were backed by highway user revenues, 20 percent were backed by future Federal proceeds, 13 percent by motor-fuel and vehicle taxes, 12 percent by tolls (including some also blended with fuel tax), and 7 percent by other sources such as oil company taxes and personal income taxes.
Total highway expenditure needs are estimated at $4.9 trillion through 2020; $10.0 trillion through 2035; and $18.3 trillion through 2055, stated in constant 2005 dollars.
Total transit needs on a cumulative basis in constant 2005 dollars are estimated to be $1.1 trillion through 2020, $2.4 trillion through 2035 and $4.4 trillion through 2055. These estimates are the sum of the constant dollar estimates for each year.

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Highway

On an average day, American drivers spend more than 81 minutes behind the wheel.
In 2006, the Dwight D. Eisenhower National System of Interstate and Defense Highways, commonly known as the Interstate System, turned 50 years old. The Interstate System consists of 46,747 route miles and includes 55,512 bridges and 82 tunnels. In 2004, Americans traveled a total of 727 billion vehicle miles on the Interstate System.
The United States has 3.9 million miles of roadway, of which 3 million miles are rural roads. The Interstate System accounts for only 1.2% of total mileage but carries 24.1% of total travel.
The 2001 National Household Travel Survey (NHTS) found that there is nearly one vehicle (0.97) for every person 16 years and older in the U.S. The NHTS also found that 87 percent of daily trips were taken by personal vehicle.
According to the 2006 Conditions and Performance Report, there were almost 4 million miles of public roads in the United States in 2004, of which 3.0 million miles were in rural areas. Local governments operated 76.5 percent of total highway miles in 2004; States controlled 20.4 percent; and the Federal government owned 3.1 percent.
According to the 2006 Conditions and Performance Report, there were 594,101 bridges in excess of 6 meters (20 feet) in total length on public roads in the United States in 2004. While 76.8 percent of bridges are located in rural areas, 72.6 percent of the daily traffic on bridges is carried by the urban structures.
The Surface Transportation Assistance Act of 1982, increased the Federal gas tax by a nickel (4 cents for highways, 1 cent for transit) to restore the condition of aging Interstate and other roads and bridges: This represented a shift in orientation of the highway program away from new construction to repair, resurfacing, and reconstruction.
The Interstate System has had four statutory names. The Federal-Aid Highway Act of 1944 called it the National System of Interstate Highways. The Federal-Aid Highway Act of 1956 amended the name to: National System of Interstate and Defense Highways. Public Law 101-427, signed by President George H. W. Bush on October 15, 1990, renamed the Interstate System the Dwight D. Eisenhower System of Interstate and Defense Highways. Section 1005 of the Intermodal Surface Transportation Efficiency Act of 1991 amended the name by restoring the word "National" after the former President's name. As a result, the official name of the Interstate System is: the Dwight D. Eisenhower National System of Interstate and Defense Highways.
The longest Interstate highway is I-90, stretching 3,085 miles from Boston, Massachusetts, to Seattle, Washington. The Nation's longest road is U.S. 20, a 3,365-mile route from Boston, Massachusetts, to Newport, Oregon.
Over half of the 41,000-mile Interstate System, or 21,185 miles, was open by the end of 1965. By 1968, when Congress authorized designation of an additional 1,500 miles, approximately 65 percent of the Interstate System (more than 27,600 miles) had been opened.
Out of nearly four million miles of public roads in the United States, a total of about 96,712 miles is eligible for Federal-aid highway funds. The Interstate System totals 4.8 percent of mileage eligible for Federal-aid.
The Interstate Highway System carries about 721.4 billion vehicle miles of travel (VMT) a year. Of these, approximately 91.3 billion (12.7 percent) are made by heavy single-unit and combination trucks. The Interstate System carries 40.3 percent of single and combination-unit truck travel on all public roads in the United States.
The Interstate System includes 106.24 miles of toll bridges and tunnels.
I-90 has more turnpike mileage, 760.2 miles, than any route on the Interstate System, exclusive of toll bridge and tunnel mileage. Turnpikes comprise about 25 percent of I-90, which totals 3,020 miles.
At 91.2 percent, the vast majority of personal trips in the United States are made by private vehicles. 2.1 percent of personal trips are made by public transportation and 3.4 percent by airplane. 3.3 percent are made by other means including taxis, school buses, bicycle and walking.
Road and street mileage in the U.S. increased by 2.4 percent between 1980 and 2000. However, the number of vehicles using those facilities increased by 39.8 percent and vehicle mile of travel increased by 81.2 percent.
The National Highway System (NHS) is the network of nationally significant highways approved by Congress. It includes the Interstate Highway System and over 100,000 of arterial and other roads. The designation of he NHS was completed in November 1995 when the National Highway System Designation Act was signed. The NHS represents approximately 4 percent of the nation’s total public road miles and 7 percent of its lane miles, but carries over 44 percent of vehicle miles traveled.
Twenty-nine percent of the nations 585,500 bridges are deemed structurally deficient or functionally obsolete. Structurally deficient bridges are safe, but often restricted to light vehicle traffic only. Functionally obsolete bridges have older design standards that prevent them from accommodating current traffic volumes and modern vehicle sizes and weights.
Average Daily Percent of Vehicle Miles Traveled (VMT) under congested conditions has increased from 25.9 percent in 1995 to 31.6 percent in 2004, but the rate of increase has slowed in recent years.
By 2004, the highway system in the Nation consisted of a network of 4.0 million miles of public roads with 594,101 bridges serving 3.0 trillion vehicle miles of travel to meet the mobility needs of the American people.
While urban mileage constituted only 24.9 percent of total mileage, these roads carried 64.1 percent of the total Vehicle Miles Traveled (VMT) in the United States for 2004.
The Average Daily Percent of VMT under Congested Conditions is an indicator of the portion of daily traffic on freeways and other principal arterials in an urbanized area that moves at less than free-flow speeds. Free-flow speed is the average speed a vehicle would travel under normal conditions without restrictions due to roadway alignment, weather conditions, or congestion from other vehicles.
The percentage of average daily percent of Vehicle Miles Traveled (VMT) occurring under congested – less than free-flow speeds – conditions increased from 25.9 percent in1995 to 31.6 percent in 2004.
In 2004, the average annual delay experienced by the peak period travelers for all urbanized areas was 45.7 hours, up slightly from 45.4 hours in 2002.
The National Highway System (NHS) has five components: (1) the Interstate System, (2) selected other principal arterials deemed most important for commerce and trade, (3) the Strategic Highway Network (STRAHNET), (4) STRAHNET connectors, and (5) intermodal connectors that provide access between major intermodal passenger and freight facilities and other NHS components. There are currently 162,158 route miles on the NHS.
Over the last four decades, highway lane miles have increased by 6 percent while Vehicle Miles of Travel (VMT) has increased by 194 percent, placing a greater and greater demand on the highway system.
Total Vehicle Miles Traveled (VMT) for 2050 is estimated at 4,834 billion miles, an increase of 46 percent from 2000 VMT (3,305 billion). For every one person, there will be roughly 11,513 vehicle miles generated.

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Transit

Passenger miles traveled on transit increased at an average annual rate of 2.3 percent between 1995 and 2004, growing from 38 billion miles in 1995 to 46.5 billion in 2004.
In 2004, there were 640 transit systems operating in urbanized areas in the United States. Of these 600 are public agencies. These agencies operated a total of 468 motorbus systems, 14 heavy rail systems, 19 commuter rail systems, and 27 light rail systems, 438 demand response systems, 43 vanpool systems, 17 ferryboat systems, 4 trolleybus systems, 3 automated guideway systems, 3 inclined plane systems, and 3 jitney systems.
Transit provides basic mobility to people with limited incomes and without cars. The 2001 National Household Travel Survey (NHTS) found that 43 percent of nationwide transit riders live in households with incomes of less than $20,000 and that 44 percent come from households without cars.
Americans made 9.6 billion individual transit trips were taken in 2004. Of theses 59.9% were made by bus, 28.7% by heavy rail, and 11.4% by all other transit modes combined.
Of the 8.085 billion transit trips made in the United States in 2004, 41.9 percent (3.384 billion) were made in metropolitan New York City. Los Angeles boasted the second highest number of trips for any metropolitan area with 606 million trips, or 7.4 percent of the annual total.
Up to 80 percent of the total capital cost of transit projects may be Federally-funded. The balance is typically paid for by a combination of state and local funds; many state and local governments provide more than the required minimum 20 percent of matching funds. In some cases, capital projects are financed solely by state and local funds.
In 2004, 39.0% of capital funding for transit projects in the United States came from the Federal government, 13.9% from state governments, 18.2% from local governments, and 28.9% was raised by transit agencies from directly-levied taxes, advertising, interest income, and other sources.
Transit vehicles traveled 4.4 billion miles and for 302.8 million hours in 2004. Buses operated 55.3% of vehicle miles, commuter rail 6.6%, paratransit 19.9%, heavy rail 14.4%, and light rail 1.5%.
In 2004, transit vehicles operated for 302.8 million hours. Buses accounted for 62.6% of vehicle hours, commuter rail 3.1%, paratransit 20.3%, heavy rail 10.8%, and light rail 1.5%.
Capital investment in transit in the United States totaled $13.2 billion in 2004. Of this amount, 27.8% was spent for rolling stock, 57.0% for transit facilities, guideways, stations and administrative buildings, and, 15.2% for other expenses.
In 2004, capital investment in transit in the United States totaled $13.2 billion. Among the transit modes, 28.3% used for bus projects, 19.5% for commuter rail, 28.7% for heavy rail, 18.4% for light rail transit.
Fifty-four percent of the transit trips made by Americans in 2004 were work trips; 15% school trips; 9% shopping trips; 5.5% medical trips and 9% social trips.
Twenty-seven percent of transit trips in 2004 were made by those with family incomes below $15,000, 55% were made by this with family incomes of $15,000 to $50,000 families, and 17% of transit trips were made those with family incomes over $50,000.
Public transportation's popularity has been affected by changing social and economic forces. During World War II, public transportation was the dominant mode on the transportation landscape. Ridership peaked in 1946, when Americans took 23.4 billion trips on trains, buses and trolleys.
After World War II, transit ridership experienced a decline due to inexpensive fuel and government policies favoring low density suburban development and the sprawl created by the new interstate highway system. By 1960, ridership dropped to 9.3 billion trips, and continued to decline to a low of 6.5 billion trips in 1972.
Since 1973, transit ridership has increased, reaching 9.6 billion trips in 2004. Some of the reasons for this increase are increasing fuel costs, the strong economy, improved transit, and higher levels investment in public transportation.
On September 22, 1969, the reversible express lanes in the median of the Henry G. Shirley Memorial Highway (I-95, now I-395) in Northern Virginia were restricted to buses in the morning peak period. It was the first time in the country that lanes were reserved for buses. In December 1973, the bus lanes were opened to carpools with four or more occupants.
Eighty-seven percent of transit investment requirements are concentrated in urban areas with populations of over one million.
Annual investment needs for transit are estimated to be $15.8 billion to maintain the conditions and performance of the system at its 2004 level.

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