What is the Transportation Services Index and How is it a Transportation Economic Indicator?
The Bureau of Transportation Statistics’ (BTS’) Transportation
Services Index (TSI) measures the volume of freight and passengers moved. BTS
produces three indexes: a freight index, a passenger index, and a combined
index. The indexes incorporate monthly data from multiple for-hire
transportation modes. The TSI includes only domestic "for-hire"
transportation operated on behalf of or by a company that provides freight or
passenger transport services to external customers for a fee. Not included in
for-hire passenger transportation are taxi, paid ride services in personal
motor vehicles (e.g., Uber and Lyft), intercity bus services, and noncommercial
passenger travel (e.g., trips in the household car). For-hire transportation
also does not include transportation services carried out by firms for their
own purposes, known as in-house transportation (e.g., goods moved by trucks
owned and operated by a firm). The for-hire transportation services covered in
the TSI constitutes slightly more than half of all transportation services
(excluding noncommercial passenger travel).
Each TSI index shows the month-to-month change in for-hire
transportation services. BTS seasonally adjusts the monthly data for each transportation
mode and then combines to produce the three indexes. The passenger index is a
weighted average of data for passenger aviation, transit, and passenger rail.
The freight index is a weighted average of data for trucking, freight rail, waterborne,
pipeline, and air freight. The combined index is a weighted average of all
these passenger and freight modes. These indexes serve both as multimodal
monthly measures of the state of transportation and as indicators of the U.S.
that changes in the freight TSI occur before changes in the economy, making the
freight TSI a useful economic indicator. The TSI commonly is cited along with the Dow Transportation Index and the Cass Freight Index as an economic indicator. All three reflect the responses of transportation providers to the economy’s demands for moving freight and/or passengers. Economic growth reflects increases in the production and demand for goods and services. To produce more goods and deliver them to consumers, industries require additional freight transportation services, both for finished products and for raw material and intermediate goods all along the supply chain. Because the earlier stages of production can be particularly transportation intensive, transportation has been seen as an indicator of economic growth (and decline). The table below describes each of these indexes and shows the differences among them. Further detail can be found in the technical brief What the Transportation Services Index, Dow Transportation Index, and Cass Freight Index Tell Us