Transportation Economic Trends
Transportation Productivity:
Total Factor Productivity
Productivity measures answer important questions about the performance of the transportation sector. This page discusses total factor productivity (TFP). Data and discussion about labor productivity are also available.
2022 Year-in-Review
- Total factor productivity (TFP) for transportation and warehousing fell from 2021 to 2022. Across all sectors, 7 out of the 9 sectors fell from 2021 to 2022. Transportation and warehousing experienced the second smallest decline at -2.8% (tied with utilities) while mining experienced the largest (-8.8%) decline in TFP. Services (1.3%) and information (0.3%) sectors increased in TFP.
- Not all transportation modes experienced the same rate of change. Air (14.2%), rail (2.3%), and transit (2.2%) TFP increased. TFP increased because the real output increased at the same or higher rate than one or more inputs. From 2021 to 2022, air transportation TFP saw the largest increase, at 14.2%, due to a 33.1% increase in real output. The largest increase in air TFP on record (51.3%) occurred from 2020 to 2021 (with records beginning in 1990) when real output had the largest increase on record (71.0%) due to increased air travel after COVID-19 stay-at-home orders and concerns about contracting the virus greatly reduced air travel in 2020.
- Pipeline (-0.2%), truck (-4.7%), and water (-6.2%), as well as warehousing (-7.7%), experienced a decrease in TFP in 2022, respectively. The TFP of these four modes decreased because one or more of their inputs increased at a higher rate than their real output – making the mode less productive in utilizing inputs despite the increase in output. For example, warehousing's TFP decreased by -7.7% because despite the 1.6% increase in real output, intermediate inputs such as purchased services and materials increased faster (7.5% and 4.1%, respectively) and labor inputs increased at an even faster rate (13.0%) than real output.
Total Factor Productivity | Total Factor Productivity by Transportation Mode | Components of Transportation Total Factor Productivity by Mode
Total Factor Productivity
TFP, also known as Multifactor productivity (MFP), measures output per unit as a weighted average of multiple factors, including capital, labor, and intermediate inputs (e.g., fuel and materials). Unlike labor productivity,
which is a single-factor measure of productivity, changes in TFP reflect the
combined effect of multiple inputs. TFP better captures the effect of new technologies,
regulatory, and organizational changes than labor productivity.
TFP is available for all sectors, enabling comparisons across sectors. The most recent data shows that the transportation and warehousing sector has the sixth-highest TFP out of the nine listed sectors.
Gains in transportation and warehousing TFP can result from increases in output per unit of one or the weighted inputs over time. Inputs include:
- Capital: the cumulative value of the services rendered from the use of physical assets such as equipment, structures, and software over time
- Labor: combined effect of hours worked and the effort and skills of the workers
- Intermediates: fuels, materials (e.g., tires), and purchased services.
Total Factor Productivity | Total Factor Productivity by Transportation Mode | Components of Transportation Total Factor Productivity by Mode
Total Factor Productivity by Transportation Mode
Transportation modes and warehousing experience different TFP - unique to the inputs, new technologies, and regulations each faces.
Total Factor Productivity | Total Factor Productivity by Transportation Mode | Components of Transportation Total Factor Productivity by Mode
Components of Total Factor Productivity by Transportation Mode
Recommended citation
U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Economic Trends, available at www.bts.gov/product/transportation-economic-trends.
