Transportation Economic Trends
Transportation Productivity:
Total Factor Productivity
2021 Year-in-Review
- Total factor productivity (TFP) for transportation and warehousing and 3 (out of 8) other sectors fell from 2020 to 2021. Transportation and warehousing experienced the smallest decline (0.1 percent), while agriculture experienced the largest (5.4 percent) decline in TFP.
- Not all transportation modes experienced the same rate of change. Air, rail, pipeline, and transit transportation experienced an increase in TFP from 2020 to 2021. Their TFP increased because the real output increased at the same or higher rate than one or more of their inputs. Air transportation TFP saw the largest increase, at 33.2 percent, from 2020 to 2021 due to a 70.9 percent increase in real output. The large increase in output follows from persons returning to air travel after COVID-19 stay-at-home orders and concerns about contracting the virus greatly reduced air travel in 2020.
- Water, truck, and warehousing transportation experienced a decrease in TFP in 2021, falling by 9.6 percent, 3.0 percent, and 1.7 percent, respectively. The TFP of these three 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, water's TFP decreased by 9.6 percent because despite the 4.4 percent increase in real output, intermediate inputs increased faster (16.8 percent) and labor inputs increased at an even faster rate (20.7 percent) than real output.
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.
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.
