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.

2020 Year-in-Review
  • 6 of 9 sectors experienced a loss in TFP in 2020. Of the sectors experiencing a loss, the transportation and warehousing sector decreased the most by 8.1 percent.
  • While TFP for transportation and warehousing declined in 2020, not all modes experienced a decline. Water, transit, and truck transportation experienced an increase in TFP in 2020, growing 2.4 percent, 1.8 percent, and 0.2 percent, respectively. The TFP of these three modes increased because one or more of their inputs decreased at a higher rate than their real output – making the mode more productive in utilizing inputs despite the decline in output. For example, transit's TFP increased by 1.8 percent because despite the 32.7 percent decline in real output, intermediate inputs declined faster (38.3 percent) and labor inputs fell at roughly the same rate as real output (32.3 percent). 
  • Air, pipeline, rail transportation, and warehousing experienced a decline in TFP from 2019 to 2020. Their TFP fell because the real output decreased at the same or higher rate than one or more of their inputs. Air transportation TFP saw the largest decrease, at 52.6 percent, from 2019 to 2020 due to a 60.2 percent decrease in real output but lesser declines in intermediate and labor inputs (43.0 percent and 13.4 percent, respectively). Air and rail transportation TFP fell to its lowest level in the past 20 years while pipeline TFP fell to roughly its 2009 level. Stimulus funding through the Coronavirus Aid, Relief and Economic Security (CARES) Act and other supplemental bills that prevented employee furloughs as a condition for receipt likely played a role in labor inputs falling less than real output. For more information on the CARES Act, see: https://data.bts.gov/stories/s/2cyr-4k8j

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 fifth 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 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

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U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Economic Trends, available at www.bts.gov/product/transportation-economic-trends.


Bureau of Transportation Statistics
The Bureau of Transportation Statistics, part of the U.S. Department of Transportation, is the preeminent source of statistics on commercial aviation, multimodal freight activity, and transportation economics, and provides context to decision makers and the public for understanding statistics on transportation.