Increasing U.S. export volumes is being viewed in many quarters as critical to reviving the nation’s economy in the long run, and truckers should stand to benefit handsomely from such a trend.
“In my view, global trade is the quickest and surest way to accelerate global growth, create new jobs and improve living standards,” noted Scott Davis, chairman and CEO of United Parcel Service, in a recent before the American Competitiveness Forum in Atlanta, a city that is also home to UPS’ global headquarters.
“In the halls of Congress, compelling arguments for trade get overwhelmed by noisy heated attacks on globalization,” he added. “[But] a boost in exports is the catalyst that the U.S. economy needs to rebound. We’ll have to regain prosperity the old fashioned way, not by household borrowing and spending but instead by earning it through innovation, increased production and aggressive marketing in other countries.”
More than 95% of the world’s potential customers are located outside the U.S., David stressed, and he urged U.S. businesses to be more vocal in demanding better access to what he termed a “huge wave” of global consumers.
Yet the flow of exports is growing, albeit slowly, especially in terms of cross-border shipments between the U.S., Mexico and Canada.
U.S. merchandise trade with Canada and Mexico – the nation’s two largest trading partners – rose by more than $24 billion or 3.3% in the five years between 2004 and 2009 despite the global economic downturn, according to data compiled by the Bureau of Transportation Statistics (BTS), an arm of the U.S. Dept. of Transportation.
As a result, the value of freight shipments moving between the three countries grew at an average rate of 0.7% per year between 2004 and 2009. However, the total value of U.S. freight shipments with Mexico grew 14.6% or 2.8% annually, while the value of goods shipped in trade with Canada declined 3.5% or 0.7% annually
Goods valued at more than $735 billion crossed the U.S. border in trade with Canada and Mexico in 2009, 23.7% lower than the record high set in 2008, according BTS. Trucks carried 62% of this freight measured by value – some $455 billion in 2009 – while rail carried 13%, followed by maritime (8%), pipeline (7%) and air (5%).
Altogether, some 9.3 million commercial trucks entered the U.S. from the trading partners in 2009, BTS noted, compared to just 31,509 trains.
Despite those traffic numbers, trucking also suffered the greatest loss in freight value due to the global economic recession in terms of cross-border freight, as it recorded the largest modal decrease in shipment value from 2008 to 2009 of over $100 billion, followed by rail (down $45 billion), and pipeline (down $39 billion).