48-49 Transportation and Warehousing in The US Industry Report

INDUSTRY REPORT 48-49
Transportation and Warehousing in the

US
In transit: Increasing online sales will likely keep sector demand high
Dan Cook | July 2021
IBISWorld.com 1-800-330-3772 [email protected]

Transportation and Warehousing in the US July 2021
Contents
COVID-19 (Coronavirus) Impact Update.............................3 COMPETITIVE LANDSCAPE.......................... 24
ABOUT THIS INDUSTRY.................................. 5 Market Share Concentration............................................. 24
Key Success Factors........................................................24
Industry Definition................................................................5 Cost Structure Benchmarks............................................. 25
Major Players...................................................................... 5 Basis of Competition......................................................... 28
Main Activities..................................................................... 5 Barriers to Entry............................................................... 29
Supply Chain....................................................................... 6 Industry Globalization........................................................ 29
INDUSTRY AT A GLANCE................................ 7 MAJOR COMPANIES...................................... 30

Executive Summary............................................................ 9 Major Players.................................................................... 30
INDUSTRY PERFORMANCE..........................10 OPERATING CONDITIONS............................ 37

Key External Drivers.........................................................10 Capital Intensity................................................................. 37
Current Performance........................................................ 11 Technology & Systems......................................................38
Revenue Volatility..............................................................39
INDUSTRY OUTLOOK.................................... 14 Regulation & Policy........................................................... 40
Industry Assistance........................................................... 41
Outlook.............................................................................. 14
Industry Life Cycle............................................................. 15 KEY STATISTICS............................................ 43
PRODUCTS & MARKETS............................... 17 Industry Data..................................................................... 43

Annual Change..................................................................43
Supply Chain..................................................................... 17 Key Ratios......................................................................... 43
Products & Services.......................................................... 17
Demand Determinants...................................................... 19 ADDITIONAL RESOURCES............................44
Major Markets....................................................................20
Business Locations........................................................... 22 Additional Resources........................................................ 44
Industry Jargon..................................................................44
Glossary............................................................................ 44
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COVID-19 IBISWorld's analysts constantly monitor the industry impacts of current events in real-time – here is an update of
(Coronavirus) how this industry is likely to be impacted as a result of the global COVID-19 pandemic:
Impact Update · Revenue for the Transportation and Warehousing sector has been adjusted to reflect a decline in 2020, due to
reduced demand for sector services as a result of the COVID-19 (coronavirus) pandemic. For more detail, refer to
the Current Performance chapter.
· Passenger transportation, such as cruise ship operators and airlines, encountered drastic revenue and profit
declines in 2020. For more detail, refer to the Products and Services chapter.
· Numerous major companies in the sector encountered sharp revenue and profit declines in 2020. For more detail,
refer to the Major Companies chapter.
Note: The content in this report is currently being updated to reflect the trends outlined above.
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About This Industry

Industry Definition This sector is primarily concerned with the transportation of passengers or cargo by air, rail water and road.
Operators that supply associated support services are also included in this sector. It is important to note that
operators that are primarily engaged in providing travel agent services that support transportation and other
operators, such as hotels, businesses and government agencies, are excluded from this sector.
Major Players USPS
United Parcel Service Inc.
FedEx
American Airlines Group Inc.
Delta Air
UAH
BNSF
Kinder Morgan Inc.
Main Activities The primary activities of this industry are:
Air transportation
Rail transportation
Water transportation
Road transportation
Transit and ground passenger transportation
Pipeline transportation
Road transportation
Support activities for transportation
Postal, courier and messengers
Warehousing and storage
The major products and services in this industry are:
Air transportation
Rail, transit and ground passenger transport
Water transportation
Truck transportation
Pipeline transportation
Support activities
Postal services, couriers and messengers
Warehousing, storage and other services
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Supply Chain
SIMILAR INDUSTRIES
Wholesale Trade in the US Management Consulting in the Travel Agencies in the US Tourism in the US
US
RELATED INTERNATIONAL INDUSTRIES
Freight Forwarding Brokerages & Global Deep-Sea, Coastal & Freight Road Transport in the UK
Agencies in Mexico Inland Water Transportation
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Industry at a Glance
Key Statistics Key External Drivers % = 2016–21 Annual Growth
$1.3tr 6.6% 0.2%

Revenue World price of crude oil Industrial production index
Annual Growth Annual Growth Annual Growth

2.4% 1.4%
Consumer spending Total trade value
2016–2021 2021–2026 2016–2026
2.7%
-0.2% 4.2% Freight transportation services
index
$82.1bn Industry Structure

Profit
Annual Growth Annual Growth POSITIVE IMPACT

2016–2021 2016–2021 Concentration Industry Globalization
-8.4% Low Low / Increasing
MIXED IMPACT
Life Cycle Capital Intensity
Mature Medium
6.5%
Profit Margin Regulation & Policy Technology Change
Medium / Steady Medium
Annual Growth Annual Growth
NEGATIVE IMPACT
2016–2021 2016–2021
Revenue Volatility Industry Assistance
-3.5pp High Low / Steady
Barriers to Entry Competition
Low / Decreasing High / Increasing
3m
Businesses
Annual Growth Annual Growth Annual Growth Key Trends

2016–2021 2021–2026 2016–2026
 Sector performance is dependent on numerous key
10.3% 7.9% macroeconomic conditions, including consumer spending
 Higher oil prices and strong industrial and trade performance

boosted sector revenue
8m  The rise in nonemployers has driven an expansion in the

Employment number of sector enterprises
Annual Growth Annual Growth Annual Growth  In line with improving domestic and global economic
condition, US manufacturing output and trade are also
2016–2021 2021–2026 2016–2026
expected to grow
2.9% 4.9%
 Rapid enterprise growth relative to employment growth
stems from the combination of nonemployer growth
 An increase in fuel costs would pressure profit for operators

$360.1bn that are unable to pass along higher costs to customers
Wages
 Volatile fuel prices have affected the sector, as fuel
Annual Growth Annual Growth Annual Growth surcharge fees have fluctuated in line with fuel costs
2016–2021 2021–2026 2016–2026
1.1% 3.4%
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Products & Services Segmentation
Major Players SWOT
STRENGTHS
High Profit vs. Sector Average

Low Customer Class Concentration
Low Product/Service Concentration
High Revenue per Employee
WEAKNESSES
High Capital Requirements
OPPORTUNITIES
High Revenue Growth (2021-2026)

High Performance Drivers
THREATS
Low Revenue Growth (2005-2021)

Low Revenue Growth (2016-2021)
Low Outlier Growth
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Executive Summary In transit: Increasing online sales will likely keep sector demand high
Operators in the Transportation and Warehousing sector are key to the United States economy, transporting freight,
commodities and passengers using trucks, trains, pipelines, ships and aircraft. The sector also includes
transportation facilities operators, such as port and warehouse owners, and logistics service providers, such as
freight forwarders. As the sector moves most goods and passengers in the US, its performance follows that of the
overall economy. Sector revenue has fallen at an annualized rate of 0.2% to just short of $1.3 trillion over the five
years to 2021, hampered by an 18.1% decline in 2020. The COVID-19 (coronavirus) pandemic affected operations
significantly last year. The pandemic halted travel plans for consumers and businesses, with services such as
passenger cruises yet to resume. It also disrupted supply chains, reducing demand for services from both
consumers and downstream industries. Furthermore, numerous industry operators received reduced fuel surcharges
or had to reduce their own fees as crude oil prices plummeted. Sector revenue is expected to rise 8.8% in 2021 as
the US and global economies recover.
As the US economy improved and trade volumes rose between 2016 and 2019, sector revenue followed. High
consumer confidence meant high demand for sector services from both commercial and consumer markets. Higher
tourism spending benefited demand for passenger air, water, car service, rail and public transit services. Booming e-
commerce spending also enabled the sector's parcel and courier delivery services to grow, while rideshare
applications enabled nonemployers to join the taxi and limousine industry (IBISWorld report 48533) rapidly. US and
global economic expansion also drove trade volumes and industrial output higher, further expanding freight
volumes. However, volatile fuel prices have also affected the sector, as fuel surcharge fees have risen and fallen in
line with fuel costs, affecting industry profitability and revenue.
Sector revenue is expected to climb an annualized 4.2% to nearly $1.6 trillion over the five years to 2026. Renewed
growth in consumer spending, manufacturing output and trade should drive sector performance. Increasing online
sales and supply chain complexity will also likely keep demand for innovative logistics and courier services high.
Commodity price volatility, changing US economic performance and regulatory or green energy initiatives will likely
affect this industry over the next five years.
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Industry Performance
Key External Consumer spending

Drivers
Increased consumer spending means that more goods are bought and sold. The increase in sales requires more
freight to be shipped to retailers, distributors and producers move goods to market. Consumer spending is expected
to rise in 2021, representing a potential opportunity for the sector.
Freight transportation services index
The freight transportation services index measures the transportation sector's output. The index is composed of ton-
miles of freight, or tons when ton-miles are not available, generated by for-hire trucking, railroad, inland waterway,
pipeline and air freight carriers. An increase in the volume of freight moved signifies increases demand for sector
services. The freight transportation services index is expected to increase in 2021.
Total trade value
The import and export of goods rely on sector services ranging from trucking and water transport, to infrastructure,
such as port and warehouse facilities. As a result, demand for sector services increases in tandem with trade. Total
trade value is expected to rise in 2021.
World price of crude oil
One of the largest costs for the sector comes from fuel expenses. Consequently, when the price of oil climbs,
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increasing fuel costs, sector costs also rise. Typically, operators are able to pass on these costs to customers,
increasing revenue. The world price of crude oil is expected to rebound in 2021, having plummeted last year. The
unpredictable volatility of oil prices represents a persistent threat to this sector.
Industrial production index
The industrial production index measures the output from the mining, manufacturing, electric and gas industries.
When the industrial production index increases, relevant sectors are more likely to demand industry services that
arrange and complete transportation and storage of goods, commodities and manufacturing inputs. The industrial
production index is anticipated to grow in 2021.
Current Prior to 2020, the Transportation and Warehousing sector expanded in

Performance line with the United States economy over the five years to 2021, despite
mixed operating conditions.
Companies in the sector transport goods, commodities and passengers using cars, trucks, trains, ships, aircraft and
other equipment. Other operators run transport infrastructures, such as airports, ports and warehouses. The sector
also incorporates service providers, such as vehicle maintenance companies, freight forwarders and brokerages,
cargo-handling companies and inspection services. By providing all of these services, the sector is responsible for
facilitating the flow of most of the goods and passengers in the United States, making it the lifeblood of the
economy. When the economy performs well, more goods are transported and people take more trips, stimulating
higher demand for sector services.
Sector revenue has fallen an annualized 0.2% to less than $1.3 trillion over the five years to 2021. However, the
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sector had demonstrated growth during the period prior to 2020, trending in line with United States GDP, positive
increases in US trade activity and growing consumer spending. Sector revenue growth was subdued by the
COVID-19 (coronavirus) pandemic in 2020, which culminated in a revenue decline of 18.1% in 2020, alone. Due to
the coronavirus pandemic, the world price of crude oil also collapsed last year, while the total value of US trade and
consumer spending each declined sizably as well. Fortunately, as vaccination efforts are ramped up and the US and
global economies recover, industry revenue is expected to increase 8.8% in 2021.
MACRO TRENDS AND PERFORMANCE
Sector performance is dependent on numerous key macroeconomic

conditions, including consumer spending, industrial production and
trade.
Consumer spending has increased an annualized 2.1% over the five years to 2021, despite a 3.9% drop last year.
Consequently, more goods have been purchased, increasing the need for manufacturers, retailers and distributors
to move cargo, thereby increasing demand for industry services. US manufacturing is heavily consumer-oriented, so
rising consumer spending prompts greater demand for the transportation of all goods, including raw materials,
intermediate goods and finished products. Moreover, these improved conditions have prompted more people to
travel across the United States and internationally, driving demand for airline, cruise and passenger rail services.
Consumers also have had more money to spend on local transportation services, such as taxis, buses and public
transit. However, alongside declines in consumer spending, the number of domestic trips by US residents fell a
remarkable 59.5% in 2020. These declines come as a result of the coronavirus pandemic, which significantly
hindered industry demand, stimulating overcapacity in both commercial and consumer markets and thereby
reducing industry profitability. Profit, measured as earnings before interest and taxes, accounts for 6.5% of sector
revenue in 2021, on average, down from 9.8% in 2019 and down from 10.0% in 2016. In 2020, sector profit margins
fell to a record low of 4.0%.
As the value of US trade expands, more goods are moved through the various domestic facilities involved,
expanding demand for transportation and warehousing services. Altogether, total trade value has expanded an
annualized 1.5% over the five years to 2021, limited by a 10.9% decline in 2020 due to the pandemic. The freight
transportation services index, a measure of the output (i.e. revenue ton miles) of the Transportation and
Warehousing sector and represents the overall growth in freight volume, has grown an annualized 2.6% over the
five years to 2021. The freight transportation services index declined 4.7% in 2020.
OIL PRICES INFLUENCE PERFORMANCE
Although the sector performed well in years prior to 2020 and is

anticipated to return to growth in 2021, there have been multiple
headwinds.
Most of the vehicles used by the sector, including cars, trucks, aircraft and ships, primarily use fuels derived from oil.
When oil prices rise, operators often pass these costs to customers in form of fuel surcharges or higher shipping
rates and increased ticket prices. Therefore, when the price of oil fell in 2016, 2019 and 2020, revenue generated
from fuel surcharges dropped. Conversely, as fuel prices rallied in 2017 and 2018, revenue growth surged in the
sector.
Oil prices directly affect US production of oil and gas, therefore determining the volume of related commodities being
shipped. For example, rail transportation was hit hard by less oil being transported during oil price declines.
Moreover, as natural gas has replaced coal, the shipment of coal declined. The beginning of the period was also
bad for manufacturing. An appreciating dollar and lower commodity prices caused industrial production to stall. As a
consequence of lower oil prices and tempered industrial and trade performance, sector revenue declined 0.2% in
2016, alongside the industrial production index. Nevertheless, between 2017 and 2019, growth in consumer
spending, higher oil prices and strong industrial and trade performance boosted sector revenue. Another
consequence of the coronavirus pandemic in 2020 was plummeting oil prices, which culminated in lower demand
from several key markets, as well as lower fuel surcharge fees for numerous transportation industries.
INTERNAL DYNAMICS AND KEY STATISTICS
Globalization, integrated supply chains and technology have all had great
effects on the sector over the past five years.
As the global supply chain has expanded and become more integrated and complex, the in-house transportation
operations of companies outside the sector have struggled to keep up. To maintain efficiency, retailers,
manufacturers and other shippers have opted to outsource their logistics operations to specialists that are more up-
to-date. Consequently, demand for third-party logistics services, such as consulting, freight forwarding and supply
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chain management, has grown.
The continued surge in e-commerce has provided another driver for certain sector segments. As more goods are
sold online, the volume and frequency of small package shipments rises. Furthermore, since online retailers typically
limit their physical locations, including logistic centers, they often require logistics outsourcing. All of this has driven
demand for third-party logistics service operators and express courier and warehousing services.
Despite an estimated 8.0% employment drop due to the pandemic in 2020, the number of sector employees
increased an annualized 2.9% to over 8.3 million people over the five years to 2021. Participatory expansion has
been driven by the introduction of transportation network companies, such as Uber Technologies Inc., which enable
passengers to order a car using their smartphone. The convenience and popularity of these services has stimulated
a surge in nonemploying operators entering the sector.
Accordingly, the rise in nonemployers has driven an expansion in the number of sector enterprises, which are
expected to climb at an annualized rate of 10.3% to nearly 3.3 million companies over the five years to 2021. The e-
commerce-backed expansion of labor-intensive sector segments, such as couriers and warehousing, has also
contributed to employment growth. Nonetheless, many operators have sought to invest in automation and robotics
technology to cut down the cost of labor over the past five years. The most significant factor contributing to
employment growth has been the rise of independent contractors, particularly in the Taxi and Limousine Services
industry (IBISWorld report 48533), which accounts for almost half the estimated growth in the labor force for this
sector. In 2020, total sector employment and wages declined as operators scrambled to reduce costs in lieu of the
coronavirus pandemic.
Historical Performance Data

Freight
Domestic transportation
Revenue IVA Establishments Enterprises Employment Exports Imports Wages Demand services index
Year ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) ($m) (Index)
2012 1,184,332 465,509 1,280,076 1,199,231 5,993,506 N/A N/A 305,099 N/A 112
2013 1,209,749 495,706 1,320,995 1,240,467 6,071,775 N/A N/A 310,814 N/A 116
2014 1,268,156 528,461 1,468,805 1,386,418 6,320,990 N/A N/A 322,961 N/A 121
2015 1,276,207 550,837 1,750,334 1,666,031 6,790,263 N/A N/A 333,999 N/A 122
2016 1,273,454 558,982 2,087,232 2,002,010 7,235,465 N/A N/A 341,037 N/A 123
2017 1,313,038 577,515 2,365,757 2,278,518 7,542,286 N/A N/A 349,773 N/A 128
2018 1,386,630 602,828 2,660,447 2,634,929 7,837,082 N/A N/A 366,062 N/A 136
2019 1,416,706 608,088 2,907,597 2,877,806 8,254,772 N/A N/A 374,683 N/A 139
2020 1,160,779 460,770 2,753,868 2,696,135 7,593,468 N/A N/A 337,983 N/A 132
2021 1,262,423 523,901 3,302,554 3,265,164 8,339,946 N/A N/A 360,060 N/A 140
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Industry Outlook
Outlook The Transportation and Warehousing sector is anticipated return to
growth, largely in line with the United States economy, over the five years
to 2026.
As the economy is expected to recover from the multiple effects of the COVID-19 (coronavirus) pandemic in 2020,
rising consumer spending, industrial output and trade are each expected to increase demand for freight and
passenger transport services during the period. Similarly, greater demand for outsourced logistics and new
technologies will likely propel demand for the sector's logistics services. Altogether, sector revenue is projected to
increase at an annualized rate of 4.2% to nearly $1.6 trillion over the five years to 2026. Nonetheless, sector
revenue is not anticipated to surpass 2019 levels until 2023, demonstrating the substantial impacts of the
coronavirus pandemic.
ECONOMIC CONDITIONS AFFECTING GROWTH
The sector will likely benefit from improving macroeconomic conditions

over the next five years.
For example, consumer spending is anticipated to grow at an annualized rate of 2.5% over the five years to 2026,
rebounding from large declines in 2020. Increased spending will likely lead to greater demand for industry services,
with more goods and manufacturing inputs transported and stored by sector operators. Consumers are also
expected to spend more on vacations and travel, boosting demand for passenger transportation services. Operators
in the airline, passenger rail, cruise, car service and public transit segments of the sector stand to gain the most from
this trend, recovering from drastic declines in 2020 due to the coronavirus pandemic. In particular, the air
transportation subsector alone is expected to account for as much as one-fifth of sector revenue growth over the
next five years. In line with improving domestic and global economic condition, US manufacturing output and trade
are also expected to grow. The industrial production index and total trade value are projected to climb an annualized
1.0% and 4.2%, respectively, over the five years to 2026. Therefore, manufacturing, trade and distribution facilities
will likely require more freight transportation services. Furthermore, the freight transportation services index is
anticipated to increase an annualized 2.1% over the five years to 2026.
Although historically volatile, the world price of crude oil is anticipated to rise over the next five years, which will likely
boost fuel prices and sector fuel surcharge revenue. Fuel prices are particularly influential for this industry, with
steep declines reducing fuel-surcharge revenue and increases generating accelerated industry growth. Conversely,
an increase in fuel costs would pressure profit for operators that are unable to fully pass along higher operating
costs to customers. Lower fuel prices would have the opposite effect, enabling operators to expand profit as
operating expenses drop. Ultimately, industry profit is expected to rise over the next five years, gradually recovering
from the lasting effects of the coronavirus pandemic.
MORE CHANGES
The Transportation and Warehousing sector will likely continue to be

shaped by many of the same changes in the business environment
experienced over the five years to 2021.
For example, the percentage of services conducted online is projected to rise over the next five years. As a result,
more marketing and paperwork will likely be conducted electronically, reducing demand for mail delivery services
and affecting revenue for that industry. Conversely, growth in online sales will likely continue to fuel demand for
couriers, express delivery and outsourced logistics services. Further supply chain integration and complexity is also
expected to stimulate growing demand for third-party logistics. For example, growth in demand from the Freight
Forwarding Brokerages and Agencies industry (IBISWorld report 48851) is anticipated to outpace the rate of sector
growth over the next five years.
Similar to the previous period, greater accessibility offered by ride-sharing companies, such as Uber Technologies
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Inc. or Lyft Inc., are expected continue to support an influx of nonemployers operating in the Taxi and Limousine
Services industry (IBISWorld report 48533). Combined with the overall growth in the sector, sector employment is
expected to rise at an annualized rate of 4.9% to nearly 10.6 million workers over the five years to 2026. Meanwhile,
the number of enterprises is anticipated to climb an annualized 7.9% to 4.8 million companies during the same
period. Rapid enterprise growth relative to employment growth stems from the combination of nonemployer growth
and operators' investment in labor-saving technologies. For instance, warehouses and ports have increasingly
invested in automated cranes and robots that can handle freight.
The five years to 2026 may also bring further investment into fuel-efficient vehicles, such as electric cars, as
companies try to reduce fuel costs and respond to more stringent environmental regulations. Lastly, while the use of
autonomous vehicles is not anticipated to become widespread, sector participants are expected to continue to invest
in this technology, which can potentially reduce labor costs, improve efficiency and curtail accidents.
Performance Outlook Data

Freight
2021 1,262,423 523,901 3,302,554 3,265,164 8,339,946 N/A N/A 360,060 N/A 140
2022 1,361,687 577,920 3,679,757 3,654,734 8,952,399 N/A N/A 380,533 N/A 145
2023 1,424,088 611,961 3,998,975 3,971,782 9,433,972 N/A N/A 394,326 N/A 147
2024 1,470,131 631,381 4,284,476 4,255,342 9,845,895 N/A N/A 405,396 N/A 150
2025 1,510,638 648,746 4,544,158 4,513,258 10,212,984 N/A N/A 415,235 N/A 153
2026 1,552,139 665,366 4,797,547 4,764,924 10,578,792 N/A N/A 425,259 N/A 155
2027 1,580,599 680,663 5,052,777 5,029,946 10,886,978 N/A N/A 436,730 N/A 158
Industry Life Cycle The life cycle stage of this industry is Mature
LIFE CYCLE REASONS
Sector value added (SVA) generally trends in line with United States GDP
The sector exhibits a moderate rate of technological change, with a few exceptions for individual
industries
The sector provides a stable offering of services and caters to well-established markets
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The Transportation and Warehousing sector is in the mature stage of its life cycle. The sector is responsible for the
transportation of most of the goods within the United State and all passengers not using personal vehicles.
Consequently, sector performance broadly mirrors the economy. When the economy is doing well, more goods are
transported to market and more people travel, increasing demand for sector services. The sector is such a key
component of the economy its performance is often used as a metric when considering the health of the overall
economy.
Sector value added (SVA), which measures a sector's contribution to the overall economy, is forecast to grow at an
annualized rate of 1.8% over the 10 years to 2026. Simultaneously, United States GDP is anticipated to climb at an
annualized rate of 2.1% during the same ten-year period. Typically, SVA growth that is in line with GDP growth
indicates a mature sector. The moderately greater rate of increase in United States GDP relative to SVA is a result
of the more commoditized nature of this sector relative to much of the US economy. In particular, fluctuations in the
world price of crude oil have contributed to several years of SVA decline over the five years to 2021. The sector also
includes several booming industries, such as the Taxi and Limousine Services industry (IBISWorld report 48533).
This industry has experienced a proliferation of nonemployers using e-hailing services, in addition to other logistics
services that have benefited from resurgent commodity prices and technological changes in recent years. These
industries are generally considered to be the exception in a predominantly mature sector.
Most of the sector's technological change has focused on improving efficiency, delivery time and costs. However,
some technologies are changing the way business is done, particularly in the Taxi and Limousine Services industry.
Transportation network companies, such as Uber Technologies Inc., have enabled passengers to order a car by just
using their smartphone. By directly connecting drivers with customers, these technology companies have drastically
reduced barriers to entry for car service providers and cut out traditional companies, such as taxi services. However,
the function of a car service has not changed, just how it is purchased.
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Products & Markets

Supply Chain Key Buying Industries Key Selling Industries
1st Tier 1st Tier
Transportation and Warehousing in the US Commercial Leasing in the US
Manufacturing in the US Tire Wholesaling in the US
Mining in the US Aircraft, Marine & Railroad Transportation Equipment

Wholesaling in the US
Consumers in the US
Manufacturing in the US
Construction in the US
Automobile Wholesaling in the US
Retail Trade in the US
Wholesale Trade in the US
Wholesale Trade in the US
2nd Tier
Freight Forwarding Brokerages & Agencies in the US
Transportation and Warehousing in the US
Agriculture, Forestry, Fishing and Hunting in the US
Construction in the US
2nd Tier
Truck & Bus Manufacturing in the US
Public Administration in the US
Train, Subway & Transit Car Manufacturing in the US
Ship Building in the US
Products & Services
TRUCK TRANSPORTATION
In the Transportation and Warehousing sector, truck transportation

industries account for an estimated 30.7% of sector revenue in 2021.
Companies within this subsector transport freight on motor vehicles, such as trucks and tractor trailers. The flexibility
offered by trucks and their ability to deliver to and from most destinations means that trucking companies account for
the vast majority of freight moved within the United States. According to the American Trucking Association, trucks
transport close to 71.4% of the US' domestic freight tonnage, which amounts to 11.5 billion tons carried and nearly
300 billion miles traveled. This subsector can be further divided by distance and type of freight moved. The majority
of revenue generated by truck transportation comes from long-distance shipping, with a smaller amount coming from
local shipping.
General freight trucking accounts for 22.5% of sector revenue, alone, and involves the transportation of various
commodities, such as palletized goods within standard containers or van trailers. In particular, the Long-Distance
Freight Trucking industry (IBISWorld report 48412) accounts for more than 80.0% of this activity, with the rest
coming from Local Freight Trucking (48411).
The remaining share of this subsector's revenue comes from specialized freight trucking. Operators in this segment
include companies that use specialized equipment due to freight size, weight, shape or other characteristics. This
includes the use of flatbeds for heavy equipment and building materials, refrigerated containers for food and
beverages and tankers for oil and gas. Like general freight trucking, this segment can be further divided into long-
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and short-distance trucking. A smaller component of this specialized trucking consists of the Moving Services
industry (48421).
The overall trucking subsector's share of revenue has fallen over the five years to 2021, as other subsectors
expanded at a faster rate. Nonetheless, the trucking subsector is expected to bolster its share of revenue as other
consumer-facing subsectors encounter drastic declines in 2020 due to the COVID-19 (coronavirus) pandemic.
AIR TRANSPORTATION
Air transportation is the third-largest subsector or service within the

sector, accounting for an estimated 12.6% of revenue in 2021.
This subsector includes the transportation of people and cargo through the use of airplanes or helicopters. Air travel
provides a relatively inexpensive way for people to travel long distances in the shortest amount of time, beating all
other forms of travel in this regard. That is why it is the most common form of travel for passengers going cross
country or internationally. Air travel is also the fastest way to move cargo. However, the limited capacity of aircraft
and the lack of scale of economics means that only the most time-sensitive and valuable goods are profitable
enough to move via air.
The vast majority of this subsector's revenue comes from scheduled air transportation. Scheduled transport means
that aircraft are used over regular routes and schedules, facilitating economics of scale to develop over routes,
thereby reducing costs and creating predictability. The Domestic Airlines industry (48111b) provides scheduled flight
within the United States and accounts for 8.4% of the sector's revenue. The International Airlines industry (48111a)
provides scheduled air travel to and from the United States and accounts for 2.2% of sector revenue. The remainder
of air transportation's revenue comes from nonscheduled air transportation. This subsector was affected drastically
in 2020 by the coronavirus pandemic, as travelers have cancelled or suspended travel plans and airlines have been
forced to cancel flights. This sub-sector is anticipated to recover more slowly than some others that are less reliant
upon consumer travelers. Nevertheless, this segment's share of sector revenue increased during the period, prior to
2020, and is likely to grow over the next five years.
SUPPORT ACTIVITIES
In 2021, support activities account for 15.9% of sector revenue.

These activities include Airport Operations (48811), Port and Harbor Operations (48831), Aircraft Maintenance,
Repair and Overhaul (48819), Rail Maintenance Services (48821) and Dry Docks and Cargo Inspection Services
(48839). However, the largest share of this segment is the Freight Forwarding Brokerages and Agencies industry
(48851), which accounts for an estimated 10.9% of sector revenue this year. Operators in this industry arrange the
transportation of freight between shippers and carriers and are usually known as freight forwarders, marine shipping
agents or customs brokers. Over the past five years, support activities' share of sector revenue has increased as
more companies have outsourced their shipping operations to forwarders.
RAIL, TRANSIT AND GROUND PASSENGER TRANSPORT
This subsector accounts for an estimated 15.8% of sector revenue in

2021.
Most revenue is generated by the transit and passenger transportation subsector, which includes the transportation
of people via urban transit systems, chartered buses and taxis. The Public Transportation industry (48511) is the
largest part of the passenger transportation subsector, accounting for an estimated 5.3% of sector revenue in 2021.
This industry includes the operation of subways, public bus lines and regional rail systems. It is also one of the most
heavily government-supported services in the sector, with most of the largest public systems owned or supported by
local governments. However, some of the most rapid change is occurring in the Taxi and Limousine Services
industry (48533), which accounts for an estimated 2.9% of sector revenue, with this share rapidly growing. In
particular, traditional taxi companies have lost market share due to the proliferation of self-employed car transport
through tech companies, such as Uber Technologies Inc.
The rail segment accounts for an estimated 5.4% of sector revenue in 2021. These services provide freight and
passenger transportation by railroad rolling stock. The vast majority of these services consist of freight
transportation, including general, automotive and commodities freight. The large amount of cargo that could be
moved by trains drastically increases economies of scale, making these services the least expensive way to
transport freight over long distances. Passenger transport is less prevalent due to strong competition from car and
air travel, with the government often having to support operators.
POSTAL SERVICES, COURIERS AND MESSENGERS
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Postal services, couriers and messengers account for an estimated 14.7%

of sector revenue in 2021.
The segment is composed of two industries, the Postal Service (49111) and Couriers and Local Delivery Services
(49222). The former consists of the United States Postal Service (USPS), which has a universal obligation to provide
mail services within the country. The latter industry delivers parcels and documents without operating under a
universal service obligation. In particular, the industry provides express delivery services, which deliver time-
sensitive goods and often require an aircraft fleet. Both industries also rely on an extensive fleet of ground vehicles
and distribution facilities. Local delivery services also include small operators, such as local messenger bike
companies. Over the past five years, this subsector's share of revenue has stayed about the same, though USPS
lost market share to express and courier operators.
PIPELINE TRANSPORTATION
This subsector consists of companies that use pipelines to transport

products such as oil, gas and chemicals, and account for an estimated
3.9% of sector revenue in 2021.
However, the Gas Pipeline Transportation industry (48621) generates 56.9% of this segment's revenue. The recent
boom in natural gas production and use has bolstered revenue from this service. However, low gas prices have
simultaneously tempered growth. Most of the remaining revenue from this subsector comes from a fairly even split
between Oil Pipeline Transportation (48611) and Refined Petroleum Pipeline Transportation (48691). A very small
share of revenue also comes from Organic Chemical Pipeline Transportation (48699).
WATER TRANSPORTATION
Water transportation, which includes the transportation of cargo and

passengers via ship and boat, accounts for an estimated 3.0% of sector
revenue in 2021.
Most of the revenue comes from the Ocean and Coastal Transportation industry (48311). In particular, ships are the
most cost-effective way to transport cargo, with more than 90.0% of global trade occurring this way. However, most
of this industry's freight revenue comes from routes between US ports. These routes are protected from foreign
competition by law, while international routes are dominated by European and Asian freight lines. In turn, most of the
revenue is in this industry is generated by cruise line operators, with the United States constituting the world's
largest cruise market. An estimated 0.6% of sector revenue comes from Inland Water Transportation industry
(48321). The United States has the largest inland waterway system in the world. Operators in this industry primarily
transport freight, such as coal, petrochemicals, agricultural goods and building materials.
WAREHOUSING, STORAGE AND OTHER SERVICES
Warehousing, storage and other services account for an estimated 3.4%

of sector revenue in 2021.
Companies providing this service specialize in running storage facilities for general merchandise, refrigerated goods
and other warehouse products. An estimated 0.3% of sector revenue is generated by scenic and sightseeing
transport.
Demand The Transportation and Warehousing sector provides the primary means
Determinants for the movement of goods and people.
As a result, its companies, assets and infrastructure can be considered the arteries of the economy. When the
economy is doing well and more goods and people are moved, demand for sector services climbs. Consequently,
demand for sector services is dependent on macroeconomic conditions.
Consumers constitute the single-largest market for sector services. They are the primary users of air travel, transit
and ground passenger transport and are significant users of postal, courier and messenger services. Therefore, the
sector is dependent on economic conditions that directly affect consumers. These include disposable income,
employment rates, interest rates, debt levels and consumer confidence. When disposable income, employment and
consumer confidence levels increase and interest rate and debt levels are low, consumers are more likely to travel,
increasing demand for transportation services. Overall rising consumer spending also drives demand for goods,
which, in turn, drives manufacturing, retail, warehousing and trade, all of which depend on sector services.
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The dynamics of trade play a key role in demand for sector services. By nature, trade depends on the use of ships,
aircraft, train, trucks and other modes of transportation to move goods. Exports drive outbound transportation
services and are dependent on economic conditions in foreign markets. Meanwhile, imports drive inbound
transportation services. The volume of imports is dependent on domestic consumer spending and the competitive
advantage of foreign manufacturers. When consumer spending increases and a foreign good is considered to be of
better quality or lower price, the level of imports climbs. The value of the US dollar is related to the level of imports
and trade. When the dollar appreciates, which is often due to rising interest rates, the price of imports declines, while
exports become more expensive, boosting imports and moderating exports. Conversely, a depreciating dollar
reduces the price of exports and makes imports more expensive, and therefore, boosting exports and reducing
imports.
The price of commodities, particularly oil, plays another key factor in demand for industry services. Commodity-
driven industries, such as mining and manufacturing, are heavily influenced by the prices of iron, coal, gas and other
commodities, which, in turn, propels these industries' demand for sector services. More importantly, the price of oil
dictates fuel costs, which is a key purchase cost for almost every operator in the sector. Rising oil prices increase
costs, which are often passed on to clients via fuel surcharges. However, if competition is strong enough, fuel
surcharge rates have to be reduced and more fuel-efficient means of transport become more appealing.
Factors, such as fuel costs, primarily drive competition within the sector and do not determine overall demand.
Nevertheless, various forms of external competition affect demand for sector services. In particular, the subsectors
responsible for international transportation, such as air and water transport, are subject to foreign competition. For
instance, the United States water freight shipping industry is primarily focused on routes between US ports because
larger, more efficient Asian and European shipping companies dominate international routes. Moreover, these
domestic shipping companies are protected by regulation that keeps out foreign competition, which helps capture
the domestic market. Other factors, such as globalization, just-in-time manufacturing and e-commerce, also increase
demand for sector services by both driving more frequent parcels shipments and integrating and complicating supply
chains. This drives demand for services, such as forwarding and express courier services. These factors also
reduce the chances of clients using in-house transportation, due to them not being proficient enough to do so
effectively.
Major Markets
CONSUMERS
The consumer market accounts for an estimated 26.5% of revenue for the
Transportation and Warehousing sector.
Key sector services, such as air travel, public transit and a large share of water transport, primarily target
passengers. Postal, courier and messenger services are also often directly sold to consumers. In particular, the
rapid growth in online sales has resulted in higher consumer demand for the delivery of small parcels over the five
years to 2021. The continued growth of the overall economy and consumer incomes have also led to increased
consumer spending on travel in general.
MANUFACTURING AND SERVICES
The manufacturing sector is the third-largest buyer of transportation and

warehousing services, accounting for an estimated 16.3% of sector
revenue.
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Producers rely on trucking, pipeline, rail, air, water and various other logistics providers to move freight, such as raw
materials and finished goods to and from their facilities. Over the past five years, this market's share of revenue has
slightly declined as US industrial output was recently hit by lower commodity prices and an appreciating dollar. This
prevented the market from growing as fast as other markets.
In terms of size, the services market is close to manufacturing, accounting for an estimated 16.8% of sector revenue
in 2021. The second-largest for the sector, this market includes businesses, such as financial services, hospitality,
restaurants, professional services, educational services and information providers. Service businesses use
transportation services in a wide variety of ways, including paying for employees' travel and delivery of parcels and
other goods. Overall, the growth in the service economy has increased demand for this market.
WHOLESALE, RETAIL AND TRANSPORTATION
In 2021, the wholesale and retail market accounts for an estimated 14.6%
of sector revenue.
Consumers in this market are highly dependent on freight transportation services to move goods between
distribution and retail locations. In fact, most finished goods are eventually transported through operators in this
market. The market is so dependent on freight transportation that more goods are moved by in-house operations
than by for-hire transport companies. Therefore, transportation companies have to contend with a significant amount
for external competition from freight operations owned by potential consumers.
Demand from the transportation sector accounts for 12.0% of revenue in 2021. Sector operators often have to buy
services from competitors or other parts of the sector to carry out their jobs. For instance, large trucking companies
often hire independent trucking operators to make up for capacity or have a more flexible labor and asset base. A
good imported by ship often has to be moved by truck to rail, and then from rail back to truck to get to its final
destination, creating the need for intra-segment dealing. In particular, the biggest buyer of intra-sector services is the
Freight Forwarding Brokerages and Agencies industry (IBISWorld report 48851). Forwarders typically do not own
their own transportation assets, but are responsible for the delivery of a good. Therefore, they buy and arrange
trucking, air, water and other transportation services.
GOVERNMENT AND OTHER MARKETS
All other markets account for 13.8% of sector revenue in 2021, with the
government market accountable for 6.8% of revenue.
Local, state and federal government agencies hire sector operators to transport employees, equipment and goods
required for them to carry out their operations. However, similar to the warehousing and retail market, more of this
transportation is done in-house as opposed to being outsourced to the sector. Whereas demand from most other
subsectors declined as a result of the COVID-19 (coronavirus) pandemic in 2020, the government market has
generally remained steady, propped up by relief spending. The construction market accounts for 2.7% of sector
revenue, with sector companies being hired to transport heavy equipment and building materials. The mining and
utilities markets hire sector operators for similar reasons.
Exports in this industry are Low and Steady
Imports in this industry are Low and Steady
While the Transportation and Warehousing sector transports freight to and from the United States, it is a service
industry. Consequently, international trade is not accounted for in this sector. For international trade data on a sector
level, refer to IBISWorld report 31-33.
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Business Locations
Since the Transportation and Warehousing sector is responsible for the transportation of goods and passengers, its
facilities are located near heavily populated areas, manufacturing hubs and trade flow channels. The Mid-Atlantic
region accounts for 25.9% of sector locations, making it the most concentrated region in the nation. Comparably, the
Mid-Atlantic is home to 15.1% of the population, with the New York tristate area acting as the nation's largest
population cluster and a major business and transport hub. In fact, New York alone makes up 15.6% of sector
locations.
The second-largest cluster of establishments is located in the Southeast region, which accounts for 19.5% of sector
locations. The region houses the largest share of the United States' population, accounting for 25.7% of the
population, in addition to having a growing manufacturing sector and numerous ports and waterways used by sector
participants. In 2021, Florida alone accounts for 6.5% of sector establishments.
The Great Lakes and West regions account for 15.5% and 15.4% of sector establishments, respectively. The central
location of the Great Lakes region and its traditional role as the center of US heavy industry make it an ideal location
for many of the sector's companies. Illinois alone houses 7.6% of industry establishments in 2021. Meanwhile, the
West region is home to California, the largest economy in the nation and second-largest home to sector
establishments by state after New York, accounting for 15.6% of establishments. The region also accounts for most
of the trade flow between the United States and Asia. The remaining regions, such as Southwest, Rocky Mountains,
New England and Plains, altogether account for 23.7% of sector establishments, with distribution generally following
population trends.
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Competitive Landscape
Market Share
Concentration
Concentration in this industry is Low
The Transportation and Warehousing sector exhibits a low level of market share concentration. In 2021, the four
largest sector companies are expected to account for 17.5% of sector revenue, combined. Furthermore, every
company that has a market share of 5.0% or more within their specific industry accounts for less than 25.0% of
sector revenue this year, combined. The sector has a very large and growing number of independent operators
across numerous industries and the diverse range of available modes of transport means it is very difficult for any
one company to dominate on a sector level. Despite a low overall level of concentration, certain industries within the
sector have a high level of concentration individually. For instance, the United States Postal Service has a monopoly
on the Postal Service industry (IBISWorld report 49111), while United Parcel Service Inc. and FedEx Corporation
dominate the Courier and Local Delivery Services industry (IBISWorld report 49222). The air transportation
subsector is dominated by four airlines and the same goes for the subsector rail sector. A general rule of thumb is
that the more capital and integration that is required to operate within a sector segment, the more likely it is to be
concentrated. This is especially true for services that are often performed on a national scale.
Key Success IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:
Factors
Having a good reputation:
Reputation acts as a basis of competition and a point of differentiation from competitors.
Carrying out all necessary maintenance to keep facilities in good condition:

Carrying out all necessary maintenance to keep facilities in good condition demonstrates a commitment to safety
and security.
Automation - reduces costs, particularly those associated with labor:

Use of automation technologies enables prices to be kept as low as possible.
Ability to accommodate environmental requirements:

It is crucial that operators adapt to environmental requirements for the continued viability of sector.
Close monitoring of competition:

Monitoring of competition is particularly important for industries where low-cost operators are a dominant force, such
as airline carriers.
Must comply with government regulations:

Government compliance is vital for a variety of the highly regulated industries in this sector.
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Cost Structure
Benchmarks
Profit
Sector profit, defined as earnings before interest and tax expenses, is

estimated to account for 6.5% of revenue in 2021. Profitability varies
greatly over the sector's various subsectors. Subsectors characterized
by the operation of infrastructure, high capital investment, limited
competition due to high barriers to entry and the ability to spread fixed
costs have the highest profit. Key examples of this are the rail
transportation subsegment, the pipeline transportation subsegment,
port operators and the warehousing and storage subsector, which have
relatively high average profit margin, respectively. Nevertheless, the
majority of industries in this sector have higher variable costs and
competition, thereby reducing profit.
Altogether, sector profit has declined over the five years to 2021,
despite fluctuations from year to year. For example, lower fuel prices
increased profit in 2017, while a recovery in prices until 2019
constrained profitability. In 2020 alone, profitability declined sharply
from 9.8% in 2019 to 4.0% in 2020 as a result of overcapacity caused
by the COVID-19 (coronavirus) pandemic. Reduced demand for almost
every industry within the sector is expected to result in overcapacity,
reducing operational efficiencies, and therefore, reducing profit.
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Wages
Wages account for an estimated 28.5% of sector revenue in 2021, up

from 26.8% in 2016. Overall, the sector is very labor-intense. Workers
are needed to operate the vehicles, provide customer service, maintain
equipment, inspect and handle cargo, package goods and manage
often complex logistics operations. Over the past five years, wages'
share of revenue has slowly risen due to a rise in the number of
employees. However, average wages have declined as operators have
invested more in labor-saving technologies and the number of
independent operators increased labor competition.
Purchases
Purchases are expected to account for an estimated 15.4% of sector

revenue in 2021, although this expense fluctuates significantly by
industry. The two primary purchases for the sector are fuel and
services. Fuel is crucial to the sector because it is necessary to run
transportation equipment, including cars, trucks, aircraft, train and
ships. When oil prices rise, the price of fuel follows and industry
purchases increase. Service expenses, such as the purchase of
transportation services and maintenance, also account for a large share
of purchase costs. Large operators often hire independent contractors
as a way to control labor costs and carry out services when they
themselves lack capacity. Some industries, such as the Freight
Forwarding Brokerages and Agencies industry (IBISWorld report
48851) do not own transportation assets, but are responsible for
arranging the transportation of cargo, and therefore, have to hire
companies that move the freight. Sector operators also have to hire
providers of repair and maintenance services for their equipment.
Marketing
The sector is broadly a business-facing one, which makes advertising

and marketing expenditures relatively insignificant as a portion of
industry revenue overall. Nonetheless, marketing and advertising
expenses account for 0.8% of sector revenue. This is partially inflated
by more consumer-oriented subsectors, such as air transportation.
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Depreciation
Depreciation costs are accountable for an estimated 6.5% of sector

revenue in 2021. Companies are heavily invested in transportation
equipment, vehicles and infrastructure.
Rent
Rent expenses account for an estimated 5.8% of sector revenue.

Operators often have to pay for the rent of distribution centers and
other facilities.
Utilities
Generally, utility costs are relatively low in this sector, accounting for
0.2% of revenue.
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Other Costs
Other expenses account for the remaining 36.4% of sector revenue in

2021. Such expenses include insurance, since operators have to insure
not only their equipment, but their freight and passengers; general
administrative expenses; legal fees; vehicle registration; maintenance;
and compliance costs. Many operators also include external services
both within the sector and from other US sectors, such as
manufacturing, software and engineering, in their other costs. The
broad spectrum of industry services and operations makes it difficult to
quantify these expenses in an accurate and observable way, as they
vary so widely between different industries.
Basis of Competition in this industry is High and the trend is Increasing

Competition
INTERNAL COMPETITION
Overall, the Transportation and Warehousing sector has a high level of

competition.
Operators primarily compete on price, speed, coverage, scope and the reputation of achieving all these factors
consistently. There is also competition between the various modes of transportation and various levels of
competition within subsectors.
Price is the most important factor of competition. Companies that can provide transportation for the lowest cost are
likely to win business. In many cases, the customers only care that they receive the good, or that it arrives at a
location at a particular time. Therefore, differentiation is limited, creating more price competition. Moreover, when a
segment of the sector creates too much transport capacity, prices almost automatically drop. The ability to deliver on
time is another important aspect of competition. Operators that are able to deliver passengers and cargo on an
agreed-upon schedule are more likely to win business. In some segments, such as courier services, public transit
and air travel, time is particularly important.
The coverage and scope of a provider's services is another important factor in competition. Customers are more
likely to do business with providers that have a greater geographic scope and multiple types of services. For
instance, trucking companies that can provide various types of cargo transport and also logistics consulting and
integration are more likely to keep customers. In this regard, larger companies are often able to be more
competitive. Some operators may also attempt to lock in customer by creating incentives or increasing the cost of
changing providers. For example, airlines typically offer loyalty programs to customers, giving passengers rewards
for using the airline. Some logistics companies also integrate themselves into clients' operations. This enables them
to provide more customizable solutions and also makes it harder for the customer to use another competitor.
The general basis of competition also interacts in inter- and intra-competition in the sector's subsectors. Due to
economies of scale, modes of transportation, such as ship and train, are far more cost effective than truck or plane.
However, trucks are able to deliver freight almost anywhere and planes have the advantage of being the fastest
mode of transport, despite being most expensive. Internal competition also greatly varies by sector segment. Due to
significant upfront investment and other forms of barriers to entry, competition in segments, such as rail
transportation, is more limited than in taxi services. However, in some cases, government policy may also limit
competition. For instance, in many cities, local governments control the number of car service providers, which is
causing issues with the proliferation of Uber and similar driver services.
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EXTERNAL COMPETITION
In general, the need to move goods and passengers cannot be

substituted, keeping external competition to the sector minimal.
The increasing use online services has hurt the Postal Services industry (IBISWorld report 49111) as email and
online marketing has reduced the need for mail delivery. Some sector segments are also exposed to foreign
competition. In particular, the water transportation segment mostly services the domestic market because
international trade routes are dominated by more efficient Asian and European competitors.
Barriers to Barriers to Entry in this industry are Low and the trend is Decreasing
Entry
Overall, the Transportation and Warehousing sector has Barriers to Entry Checklist
low barriers to entry. The vast majority of operators in this
industry are small independent contractors also known as Competition High
nonemployers. This ranges from car service providers to
bike couriers. Concentration Low
Nevertheless, barriers greatly vary between subsector
and services. For instance, car service operators have Life Cycle Stage Mature
low barriers to entry, with the price of a vehicle and
licensing requirements constituting the primary barriers. Technology Change Medium
There also many subsegments with very high barriers to
entry. Airlines have to invest in aircraft fleets, gain access Regulation & Policy Medium
to airport terminals and meet stringent Federal Aviation
Agency and Department of Homeland Security Industry Assistance Low
regulations, all before competing with incumbents that
have markets share and reputations. Pipeline, airport and
rail operators all have to contend with similar barriers, in
addition to investing in significant infrastructure.
Furthermore, government regulation becomes more

stringent the riskier the nature of cargo and its related
transport becomes. For example, airline regulation is high
because aircraft failure could lead to mass fatalities, while
oil pipeline spills can cause large-scale environmental
damage. Some municipalities even charge a high cost
and enforce strict requirements for taxi medallions and
licenses.
Conversely, barriers to entry are also declining in some

segments. For instance, the advent of mobile device ride
hailing applications, such as Uber Technologies Inc., has
enabled thousands of car service operators to enter the
sector, bypassing traditional taxi requirements. Although
new regulations have rapidly been proposed or
implemented, the level of regulation remains low for this
industry.
Industry Globalization in this industry is Low and the trend is Increasing

Globalization
The Transportation and Warehousing sector experiences a low, but increasing, level of globalization. The United
States' economy is primarily based on domestic consumption. Thus, most goods are moved within the country.
Therefore, the vast majority of operations are performed domestically by US-based providers. However, the United
States is also a major importer and, to a lesser degree, a key exporter, linking some of the sector's performance to
international markets. In particular, air, water and courier services have large exposure to foreign operations. The
trucking and rail segments also transport goods across the US, Canadian and Mexican borders. As global supply
chain continues to become more integrated, the sector is expected to continue globalizing.
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Major Companies
Major Players United States Postal Service
Market Share: 5.6%
The United States Postal Service (USPS) is an independent agency of the federal government. It is the only
operator in the Postal Service industry (IBISWorld report 49111), giving it a monopoly in that industry. USPS
provides letter and parcel delivery services, such as First-Class Mail, standard mail and package services to US
residents, along with special services, such as money orders and passport renewals.
The company was established by the Postal Reorganization Act of 1970, replacing the Post Office Department.
USPS also employs more than 633,000 people across nearly 34,300 post offices nationwide. USPS generated more
than $73.2 billion in total revenue in fiscal 2020 (year-end September).
Financial performance
USPS's Transportation and Warehousing sector-relevant revenue has declined at an annualized rate of 1.1% to
$67.7 billion over the five years to fiscal 2021 (year-end September). The primary reasons for this decline include a
decrease in mail delivery volume and external competition. However, rate hikes on competitive products has
cushioned some revenue declines. However, despite these revenue-raising efforts and overall labor force
consolidation, locked-in wages and benefits have kept wage costs high, with USPS operating at a loss over the past
five years.
30 IBISWorld.com
Falling mail volume, particularly in key product segments, such as First-Class Mail, has been a key factor in USPS's
degrading condition. This trend is expected to continue over the five years to 2026 amid heightened computer and
mobile device usage, which shifts customers away from more traditional correspondence methods. The health
benefit contributions stemming from the Postal Accountability and Enhancement Act of 2006 also increased
operating costs significantly. The company has also experienced stiffer competition from courier competitors, such
as United Parcel Service Inc. and FedEx Corporation. USPS has operated at a loss during each year of the period.
The company's operating income has also declined each year during the period.
United States Postal Service (US sector-specific segment) - financial performance*

Revenue Growth Operating Income Growth
Year** ($m) (% change) ($m) (% change)
2015-16 71,498.0 3.7 -5,401.0 10.3
2016-17 69,636.0 -2.6 -2,574.0 -52.3
2017-18 70,783.0 1.6 -3,785.0 47.0
2018-19 71,306.0 0.7 -8,813.0 132.8
2019-20 73,225.0 2.7 -9,176.0 4.1
2020-21 67,690.6 -7.6 -8,327.6 -9.2
Source: Annual report and IBISWorld
Note: *Estimates; **Year-end September
United Parcel Service Inc.
Market Share: 5.4%
The United Parcel Service Inc. (UPS) is the largest small-package carrier in the world based on revenue and
volume. Founded in 1907 as a private messenger and delivery service in Seattle, UPS has since expanded to
specialize in ground delivery services and also participates in air and ocean freight shipping. Headquartered in
Atlanta, the company's ground segment dominates the US market, while its air service offerings continue to steal
market share from its main competitor, FedEx Corporation. In overseas markets, UPS has yet to achieve the same
dominance as it has in the US market, but it continues to expand through acquisitions in the Asia-Pacific region,
Latin America and Europe. The company also has regional air delivery hubs in Canada, Germany and Taiwan. In
2020, UPS employed 495,000 individuals, 413,000 of which were based in the United States, and generated $846.1
billion in total company revenue. The company operates one of the largest airline fleets in the world, with more than
261 aircraft owned or leased by the company.
UPS is organized into three primary business segments, which include domestic package business; international
package business; and supply chain and freight. The US operations of all three of these business segments are
relevant to this sector. The domestic and international package division constitute the company's operations within
the Couriers and Local Delivery Services industry (IBISWorld report 49222). These units offer time-sensitive delivery
of letters, documents, packages and palletized freight via aircraft and ground vehicles. Overall, these services
account for more than 80.0% of the UPS's total worldwide revenue.
The supply chain and freight division accounts for the remainder of the company's revenue. The unit provides
various services, such as forwarding and brokerage, which is part of the Freight Forwarding Brokerages and
Agencies industry (48851) and trucking, which is part of the general freight trucking segment. The company also
offers financial services to its clients through its UPS Capital subunit.
UPS's sector-relevant revenue has increased at an annualized rate of 8.1% to $68.3 billion over the five years to
2021, after a fairly sharp decline in 2020 during the pandemic. Persistent growth in overall retail sales due to
improving macroeconomic conditions has led to an increase in shipping volume, directly benefiting UPS's domestic
package business. Furthermore, the company has reported growth in its e-commerce operations and business-to-
consumer shipments. The company also cited an increase in usage of its omnichannel solutions segment, which
enables corporations to ship to and from the corporation's various establishments. The company's sector-relevant
operating income has also increased over the past five years, despite declines in 2017 and 2020.
31 IBISWorld.com
United Parcel Service Inc. (US sector-specific segment) - financial performance*

Year ($m) (% change) ($m) (% change)
2016 46,267.0 N/C 4,155.1 N/C
2017 49,639.3 7.3 5,706.4 37.3
2018 53,415.9 7.6 4,099.8 -28.2
2019 56,048.8 4.9 3,792.7 -7.5
2020 63,862.5 13.9 -37.4 N/C
2021 68,261.9 6.9 6,126.0 N/C
FedEx Corporation
Market Share: 4.2%
FedEx Corporation (FedEx) is a delivery company based in Memphis, TN, with a network of subsidiaries that provide
delivery, e-commerce and business services. The subsidiaries are independently operated and collectively managed
under the FedEx brand. FedEx's operating companies consist of five main groups, which include FedEx Express,
FedEx Ground and FedEx Freight, FedEx Services and TNT Express. The first three groups are relevant to this
sector, while the latter two are not. In particular, while TNT Express operators within the transportation sector, its
operations are mostly based outside the United States. Altogether, the company employed more than 245,000
individuals worldwide and generated $69.2 billion in total company revenue in fiscal 2020 (year-end May).
FedEx Express is the world's largest express transportation company. FedEx Express consists of an estimated
66,000 drop-box locations, 657 aircraft and more than 57,000 motorized vehicles and operates in more than 180
countries. FedEx Express also has an agreement with the US Postal Service to provide transportation for postal
express shipments, but it does not deliver mail. FedEx Ground is the second-largest small-package carrier in the
United States. This segment specializes in the shipment of goods for businesses and residential customers. The
company offers FedEx Home Delivery, which provides Saturday and evening delivery, in addition to premium
options, such as day-specific, appointment and signature delivery. Combined, FedEx Express and Ground make
FedEx the second-largest operator in the Freight Forwarding Brokerages and Agencies industry (IBISWorld report
48851). Lastly, FedEx Freight provides less-than-truckload services as is part of the general freight trucking
segment.
Over the five years to 2021, the company has completed various acquisitions, primarily in Western Europe and Asia.
In the United States, the company acquired Genco Shipping & Trading Ltd., one of the largest third-party logistics
providers in North America. In 2016, the company acquired TNT Express, creating the TNT Express division.
IBISWorld expects FedEx's sector-relevant revenue to grow at an annualized rate of 6.3% to $52.9 billion over the
five years to fiscal 2022. Growth during the period has been driven largely by volume increases resulting from a
pick-up in business activity following the recession and continued growth in the e-commerce space thereafter.
Conversely, sector-relevant operating income, measured as earnings before interest and taxes, has declined over
the five years to fiscal 2021, as operational inefficiencies sparked income declines. Operating income and revenue
are each anticipated to decline as a result of the COVID-19 (coronavirus) pandemic in 2020.
FedEx Corporation (US sector-specific segment) - financial performance*

Year** ($m) (% change) ($m) (% change)
2016-17 39,186.8 N/C 2,966.3 N/C
2017-18 42,482.3 8.4 2,772.9 -6.5
2018-19 46,429.4 9.3 2,975.2 7.3
2019-20 47,097.4 1.4 1,644.6 -44.7
2020-21 49,542.6 5.2 1,185.9 -27.9
2021-22 52,938.8 6.9 1,612.2 35.9
Note: *Estimates; **Year-end May
32 IBISWorld.com
American Airlines Group Inc.
Market Share: 2.3%
American Airlines Group Inc. (American Airlines Group) was created in 2013 following a merger of American Airlines
and US Airways. This merger was negotiated with the US Department of Justice, and the company was forced to
give up landing slots in seven major airports. Collectively, the company's airlines operate an average of 6,800 flights
each day to more than 365 destinations in 61 countries. Prior to the COVID-19 (coronavirus) pandemic, the
company employed more than 133,700 workers, operated 942 mainline aircraft. However, in 2020 the company
generated $17.4 billion in total revenue, down from nearly $45.8 billion in total revenue in 2019. Despite poor
performance last year, the company is a major player in both the International Airlines industry (IBISWorld report
48111a) and the Domestic Airline industry (48111b).
The company divides its operating income into four categories, which include mainline passenger, regional
passenger, cargo and other. Mainline passenger income accounts for an estimated 70.0% of total revenue each
year and refers to operations excluding regional operations and includes domestic and international passengers.
Regional revenue account for an estimated 15.0% of revenue and refers to local scheduled air transportation. These
operations are branded under American Eagle, but consist of both direct subsidiaries of American Airlines Group or
third-party airlines. Regional operations are a key component of the feeder system, in which passengers are
transported to the airline's primary hubs for travel on the mainline. Cargo revenue accounts for an estimated 2.3% of
the total and refers to freight and mail delivered within the aircraft's belly.
American Airlines Group's sector-relevant revenue has declined at an annualized rate of 6.0% to $29.5 billion over
the five years to 2021. Much like other airlines, revenue fell drastically in 2020 as a result of the COVID-19
(coronavirus) pandemic, having increased in almost every other year during the period. A fall in fuel prices forced
the airline to decrease ticket prices through 2016, reducing revenue growth in those years. As fuel prices recovered
between 2017 and 2019, and demand continued to grow, revenue rose in those years. Sector-specific operating
income, measured as earnings before interest and taxes, is anticipated to decline to a loss of $5.4 million over the
five years to 2021.
American Airlines Group Inc. (US sector-specific segment) - financial performance*

2016 40,142.0 -2.1 5,060.0 -18.4
2017 42,622.0 6.2 4,231.0 -16.4
2018 44,541.0 4.5 2,656.0 -37.2
2019 45,768.0 2.8 3,065.0 15.4
2020 17,377.0 -62.0 -10,421.0 N/C
2021 29,523.1 69.9 -5,443.1 -47.8
Note: *Estimates
Delta Air Lines Inc.
Market Share: 2.3%
Delta Air Lines Inc. (Delta) is one of the world's largest airlines. The company operates a system of hubs,
international gateways and key airports in Amsterdam, Atlanta, Boston, Detroit, London, Los Angeles, Minneapolis,
New York City, Paris, Salt Lake City, Seattle and Tokyo. Collectively, Delta and its subsidiaries offer service to 328
destinations in 59 countries through more than 15,000 daily flights. In 2020, Delta generated $17.1 billion in global
revenue, down drastically from 47.0 billion in 2019. Prior to the COVID-19 (coronavirus) pandemic, the company
employed 91,224 full-time equivalent staff. The company is a major player in both the International Airlines industry
(IBISWorld report 48111a) and the Domestic Airlines industry (48111b).
Passengers account for the overwhelming majority of the company's total revenue. Of that revenue, the bulk is
generated by domestic mainline and regional carrier operations. International routes account for almost 30.0% of
passenger revenue, with the Atlantic route being by far the largest. Cargo revenue makes up less than 2.0% of
33 IBISWorld.com
revenue each year, while other revenue, such as loyalty programs, administration fees, ancillary businesses and
baggage fees, accounts for the remaining share of revenue.
In 2016, Delta and Aeromexico entered into a joint cooperation agreement, in which the companies will be able to
better coordinate efforts to expand destinations and frequencies, improving connecting schedules and operations.
The company's sector-relevant revenue has declined at an annualized rate of 5.9% to $29.0 billion over the five
years to 2021, which is almost entirely a result of drastic losses in 2020. The coronavirus pandemic affected the
airline subsector particularly hard, as domestic and international travel plans are cancelled and flights are halted.
Despite lower fuel costs during much of the period, the company's operating income had fallen drastically over the
past five years, again caused primarily by expected operating income losses caused by the coronavirus.
Delta Air Lines Inc. (US sector-specific segment) - financial performance*

2016 39,450.0 N/C 6,996.0 N/C
2017 41,138.0 4.3 5,966.0 -14.7
2018 44,438.0 8.0 5,264.0 -11.8
2019 47,007.0 5.8 6,618.0 25.7
2020 17,095.0 -63.6 -12,469.0 N/C
2021 29,044.0 69.9 -10,487.7 -15.9
Note: *Estimates
United Airlines Holdings Inc.
Market Share: 2.1%
United Airlines Holdings Inc. (UAH) is a holding company for United Airlines, the third-largest airline in the United
States. The current company came into being after the United Airlines and Continental Airlines merger, which
accrued over several years. UAH operates more than 4,900 flights per day to 362 airports across six continents. It
serves almost every major market in the world, either directly or through its participation in the Star Alliance network.
UAH operates from hubs in Los Angeles, San Francisco, Denver, Houston, Chicago and Washington, DC. In 2019,
UAH employed 96,000 staff and generated $43.3 billion in global revenue. In 2020, total revenue fell to just $15.4
billion as the global COVID-19 (coronavirus) pandemic stunned the airline industry. Nevertheless, the company is a
major player in both the International Airlines industry (IBISWorld report 48111a) and the Domestic Airlines industry
(48111b).
Most of the company's revenue is generate by passenger services. Cargo revenue accounts for just 2.7% of
revenue, while other revenue comprises 5.7% of revenue. In terms of geographic distribution, 61.9% of revenue is
generated by domestic operations, 17.1% from the Atlantic route, 11.9% from the Pacific route and 8.7% from the
Latin American route.
UAH's sector-relevant revenue has declined at an annualized rate of 6.5% to $26.1 billion over the five years to
2021. Annualized declines are almost entirely due to an expected revenue decline in 2020, due to the COVID-19
(coronavirus) pandemic. Similar to other US airlines, UAH's sector-relevant revenue growth has also been
constrained in recent years by fluctuation in the price of jet fuel, which has forced most operators to eliminate fuel
surcharges and reduce ticket prices to remain competitive. However, the company's operating income, measured as
earnings before interest and taxes, has dropped substantially. The company is anticipated to report a loss of nearly
$5.4 billion in 2021, largely due to the coronavirus outbreak in 2020.
34 IBISWorld.com
United Airlines Holdings Inc. (US sector-specific segment) - financial performance*

2016 36,558.0 -3.4 4,344.0 -15.9
2017 37,784.0 3.4 3,618.0 -16.7
2018 41,303.0 9.3 3,229.0 -10.8
2019 43,259.0 4.7 4,301.0 33.2
2020 15,355.0 -64.5 -6,359.0 N/C
2021 26,087.8 69.9 -5,348.6 -15.9
Note: *Estimates
Burlington Northern Santa Fe LLC
Market Share: 1.8%
Based in Fort Worth, TX, Burlington Northern Santa Fe LLC (BNSF) operates one of the largest railroad networks in
North America through its subsidiary, BNSF Railway. Therefore, the company has the largest market share within
the Rail Transportation industry (IBISWorld report 48211). It covers 32,500 route miles, 28 states and three
Canadian provinces. This network covers the western two-thirds of the United States, stretching from major Pacific
Northwest and Southern California ports to the Midwest, Southeast and Southwest and from the Gulf of Mexico to
Canada. In 2020, BNSF employed more than 40,000 workers in total and hauled 10.7 million carloads (latest data
available).
BNSF primarily transports coal, grain, intermodal containers and trailers, chemicals, metals, minerals, forest
products, automobiles and consumer goods. Consumer products, comprising international and domestic intermodal
containers and automobiles, is the largest segment of BNSF's business mix. The second-largest segment for BNSF
is industrial products, which consists of construction products, building products, petroleum products, chemicals and
plastic products and food and beverage. Coal transportation accounts for a declining share of the company's annual
revenue with more than 90.0% of all BNSF's coal tons originating in the Powder River Basin of Wyoming and
Montana. In addition to dealing with major cities and ports, BNSF Railway works with smaller partners to serve
smaller markets and has entered marketing agreements with other rail carriers, expanding its marketing reach.
IBISWorld estimates that BNSF's sector-relevant revenue has grown at an annualized rate of 2.6% to just under
$22.6 billion over the five years to 2021. In 2019, 52.3% of its total units carried were consumer products and 18.9%
of total units carried were industrial products, while coal units fell, accounting for 17.6% of total units carried (latest
data available). The remainder was composed of agricultural units. Revenue dropped in 2015 and 2016 as falling oil
prices persisted, causing company revenue to decline 9.7% in 2016 as traffic volume continued to fall, particularly
from coal and crude oil segments.
The company transported 5.0% fewer carloads and intermodal units than the previous year. The company
recovered well in 2017 and 2018, posting the strongest growth among Class 1 operators each year. Sector-relevant
operating income, measured as earnings before interest and taxes, has declined over the five years to 2021.
Revenue and operating income declines are each anticipated to be exacerbated by the COVID-19 (coronavirus)
pandemic in 2020.
Burlington Northern Santa Fe LLC (US sector-specific segment) - financial performance*

2016 19,829.0 N/C 6,645.0 N/C
2017 21,387.0 7.9 7,293.0 9.8
2018 23,855.0 11.5 7,800.0 7.0
2019 23,515.0 -1.4 8,071.0 3.5
2020 20,869.0 -11.3 7,740.0 -4.1
2021 22,579.6 8.2 10,432.8 34.8
Note: *Estimates
35 IBISWorld.com
Kinder Morgan Inc.
Market Share: 1.0%
Kinder Morgan Inc. (Kinder Morgan) consists of four energy companies with operations in Canada and the United
States. The Kinder Morgan family of companies includes Kinder Morgan Inc., Kinder Morgan Energy Partners LP,
Kinder Morgan Management LLC and El Paso Pipeline Partners LP, all publicly traded on the New York Stock
Exchange. In total, the company employs 11,086 people and operates 83,000 miles of energy pipelines and 147
terminals. Kinder Morgan's extensive pipeline infrastructure transports natural gas, refined petroleum products,
crude oil and carbon dioxide, and its terminals handle a variety of products, including gasoline, jet fuel, ethanol, coal,
petroleum coke and steel. In 2020, Kinder Morgan generated more than $11.7 billion in consolidated revenue. This
represents a fairly notable drop from $13.2 billion the year before, as the pandemic damaged company operations.
The company operates in the Gas Pipeline Transportation industry (IBISWorld report 48621) under Kinder Morgan
Energy Partners LP (KMP) and El Paso Pipeline Partners LP. Combined, the company's natural gas pipelines total
71,000 miles in the United States, securing Kinder Morgan's place as the industry's leader. Kinder Morgan's natural
gas pipelines are connected to several important gas sources. KMP's Texas Intrastate Natural Gas Group consists
of several pipeline systems, including the Kinder Morgan Texas Pipeline, the Kinder Morgan Tejas Pipeline, the
Mier-Monterrey Mexico Pipeline and the Kinder Morgan North Texas Pipeline. The two largest systems in the group
are the Tennessee Gas Pipeline, extending 11,750 miles from South Texas to the Northeast and Southeast regions,
and the Mojave pipeline system, which totals 10,600 miles.
The company has expanded over the five years to 2021 as a result of ongoing acquisition activities. For example, in
2015, Kinder Morgan acquired Hiland Partners LP for $1.7 billion, adding more than 2,000 miles in natural gas
pipeline capacity and further crude oil infrastructure.
Kinder Morgan's sector-relevant revenue has declined at an annualized rate of 0.5% to under $12.2 billion over the
five years to 2021. Since Kinder Morgan claimed the largest share of operating pipelines over the past five years,
the company has benefited particularly well from the increase in natural gas demand and production. However,
volatile commodity prices in 2015, 2016 and 2019 stimulated declines in revenue as the company reduced their fees
to maintain profitability. Kinder Morgan has struggled to reach previous revenue levels since these declines. The
company's operating profit, after accounting for capital costs, has fluctuated during the period and reflects the
significant costs of pipeline extension. Kinder Morgan's strategic acquisitions over the past five years have secured
its strong market position. In more recent years, the recovery in of oil and gas prices and company expansion
boosted revenue. In 2020, steep commodity price declines and resulting lower demand culminated in sector-
revenue declines, with operating income also falling.
Kinder Morgan Inc. (US sector-specific segment) - financial performance*

2016 12,459.0 N/C 3,375.7 N/C
2017 13,073.0 4.9 3,366.3 -0.3
2018 13,596.0 4.0 3,647.0 8.3
2019 12,833.0 -5.6 4,734.3 29.8
2020 11,625.0 -9.4 1,550.0 -67.3
2021 12,153.3 4.5 2,061.0 33.0
Note: *Estimates
36 IBISWorld.com
Operating Conditions
Capital Intensity The level of capital intensity is Medium
The Transportation and Warehousing sector has a

moderate level of capital intensity. For every $1.00
spent on labor in 2021, operators in the sector are
expected to allocate $0.23 toward capital equipment
and maintenance. By nature, the sector relies on
vehicles and other transportation equipment. Vehicles
include aircraft, ships, trucks, buses, cars and rolling
stock, with the largest companies operating entire
fleets of such equipment. The industry also includes
operators of infrastructure, which further increases
capital intensity. This includes ports, airports,
warehouses, truck terminals, pipelines, railways,
public transit facilities. However, the sector is also
very labor intensive, with wage costs accounting for
28.5% of revenue in 2021. Labor is required to
operate vehicles, handle freight, provide customer
service, run facilities and maintain and repair assets.
Over the five years to 2021, industry capital intensity
has remained moderate, as spending on assets, such
as vehicles, almost mirrored wage growth. In fact, the
sector's focus on efficiency, the rise in nonemployers
and increased use of labor-saving technology has
reduced average industry wages.
37 IBISWorld.com
Technology & Potential Disruptive Innovation: Factors Driving Threat of Change

Systems
Level Factor Disruptive Description

Effect
Unknown Rate of Unknown A ranked measure for the number of

Innovation patents assigned to an industry. A faster
rate of new patent additions to the
industry increases the likelihood of a
disruptive innovation occurring.
Unknown Innovation Unknown A measure for the mix of patent classes

Concentration assigned to the industry. A greater
concentration of patents in one area
increases the likelihood of technological
disruption of incumbent operators.
Very High Ease of Entry Very Likely A qualitative measure of barriers to

entry. Fewer barriers to entry increases
the likelihood that new entrants can
disrupt incumbents by putting new
technologies to use.
Very High Rate of Entry Very Likely Annualized growth in the number of
enterprises in the industry, ranked
against all other industries. A greater
intensity of companies entering an
industry increases the pool of potential
disruptors.
Very Low Market Very A ranked measure of the largest core

Concentration Unlikely market for the industry. Concentrated
core markets present a low-end market
or new market entry point for disruptive
technologies to capture market share.
This technology trend is underscored by structural factors that support new entrants. An accommodative structure
can create a situation where small entrants can focus on less profitable albeit innovative industry entry points. Or,
large operators in other industries can leverage expertise in other areas to enter the industry from a new angle.
Major market segments for industry operators are relatively diversified. The spread of market segments suggests
that there are limited entry points other than those already served my incumbent operators.
The Transportation and Warehousing sector does not encounter a

significant degree of technology and systems disruption, as most
industries have fixed processes and technologies.
Nonetheless, some industries have encountered disruption over the five years to 2021. For example, ride-sharing
applications have transformed the taxi and limousine industry (IBISWorld 48533) by enabling ride brokers, such as
Uber Technologies Inc., to connect nonemployer taxi drivers with passengers directly using their smartphone.
Similar technologies have also threatened to disrupt the Freight Forwarding Brokerages and Agencies industry
(48851), as operators are increasingly using these applications to pair shippers and carriers and improve operational
efficiencies.
Over the five years to 2026, several industries will likely experience the potential for disruptive technologies to
transform their operations. For example, electronic and autonomous vehicles have the potential to disrupt the
various freight trucking industries. Similarly, new technologies in the air freight market, including air carriers, have
the potential to disrupt international trade facilitators. Industries that face disruption include the Ocean and Coastal
Transportation industry (48311) and the Port and Harbor Operations industry (48831).
The level of technology change is Medium
The Transportation and Warehousing sector has currently undergone a

moderate level of technological change.
38 IBISWorld.com
Communications, telematics, robotics and renewable energy technologies have made their way through the sector.
These technologies are also transforming industry processes and business models.
The proliferation of sensors, GPS, network equipment, cloud computing and related software is rapidly making the
idea of the internet of things possible. Companies can use these technologies to keep track of vehicles, determine
optimal routes, determine maintenance needs, provide real-time status on deliveries and easily integrate their
operations with suppliers and customers. In particular, telematics, which is the use of these technologies in vehicles,
has become standard in trucking and commercial vehicles fleets.
Robotics has also been increasingly used in the sector to improve efficiency, reduce labor costs and improve safety.
For instance, ports are increasingly using automated cranes, stackers and trucks to move containers throughout
their facilities to increase processing speeds and cut costs. Warehouses have also increasingly used automated
guided vehicles, which are portable robots that follow markers, wires or use other technologies for navigation in their
establishments. These robots are typically used to move packages and freight. Moreover, the sector would be one
of the primary beneficiaries of the development of autonomous vehicles. Autonomous cars and trucks would not only
reduce the need for drivers, but would enable vehicles to be used for longer periods of time as no breaks would be
needed. Even if vehicles do not become fully autonomous anytime soon, the technology could reduce the strain put
on drivers, thus reducing accidents.
Since the sector is also one of the largest emitters of greenhouse gases, it has also increasingly come under
pressure to invest in more fuel-efficient vehicles. Manufacturers of trucks, cars, ships and aircraft have all taken
advantage of electronic and software technology and better materials to produce vehicles that use far less fuel than
older models. Moreover, as the cost of electric vehicles declines in line with battery costs, their use within the sector
is climbing. Aside from environmental consideration, this trend is also being driven by costs. Fuel is one of the
sector's largest costs, and companies have sought solutions that reduce this cost.
E-commerce and online tools are also changing the way that business is done. More compliance work is done
online, drastically reducing paperwork. Climbing online sale of goods has also drastically increased the volume of
small, but more frequent, package delivery. This has forced operators to improve delivery speed, provide customers
with real-time tracking and invest distribution centers. Combined with the overall trend in globalized and integrated
supply chains, sector participants have been forced to continue adopting not only the technologies mentioned above
but also systems to manage of all them, including investment into artificial intelligence. The incredibly complex
nature of all of this has increased demand for the sector's service providers, ranging from consultancies to
forwarders to complete third-party logistics providers.
The proliferation of internet-enabled mobile devices, combined with telematics has also disrupted certain segments
of the sector. In particular, technology companies such as Uber now enable consumers to order a car service via
their phone, thereby connecting independent drivers within the network with passengers. This has caused traditional
taxi companies to lose significant market share and has encouraged more nonemployers to provide car services.
Revenue Volatility The level of volatility is High
39 IBISWorld.com
The Transportation and Warehousing sector typically exhibits a moderate

level of revenue volatility, although the pandemic has increased volatility
to high.
In general, since the sector is so fundamental to the overall economy, its performance is highly correlated with that
of US GDP. Many economists and analysts even use sector performance as a leading indicator for future economic
conditions. However, aside from the business cycle, sector volatility can be increased by fluctuations in the price of
oil and other commodities. Since the sector relies on vehicles, fuel costs constitute a large portion of overall
purchases. Operators often offset these costs by passing them on to customers in the form of fuel surcharges or
higher prices. Therefore, when oil prices drop, fuel price follow, reducing sector revenue. The opposite often occurs
when oil prices recover. Moreover, the volume of oil, gas and other commodities transported by the sector is also
correlated with the price of these goods.
Regulation & Policy The level of regulation is Medium and the trend is Steady
The Transportation and Warehousing sector has a moderate level of

regulation.
However, the level of regulation drastically varies by subsector.
TRUCKING
The truck transportation subsector has a moderate level of regulation.

Federal, state and local regulation often cover working conditions, including limiting the number of hours a driver can
operate a vehicle during the day. Carriers also have to pay into the Unified Carrier Registration (UCR) system. The
UCR registers vehicle operators and collects fees from interstate motor carriers. Most states obtain registration fees
from this system. Environmental rules also govern the amount of engine idling permitted. In 2007, the US
Environmental Protection Agency (EPA) introduced new regulations designed to cut diesel fuel pollution 95.0%.
Industry operators have had to change engines to meet cleaner standards by reducing the amount of sulfur in the
refining process of diesel fuel. In August 2016, the EPA introduced new greenhouse gas emissions regulations that
require manufacturers and sector operators to substantially reduce carbon emissions from commercial trucks by
2027. Other regulations recently implemented include initiatives that use Electronic Logging Devices (ELDs) to
regulate driver hours. Lastly, various security and safety regulations apply to trucks carrying hazardous material.
AIR TRANSPORT
The air transport subsector has a high level of regulation.

In particular, the Federal Aviation Administration (FAA) is primarily responsible for matters relating to air carrier flight
operations, including airline operating certificates, control of navigable airspace, flight personnel, aircraft certification
and maintenance and other matters affecting air safety. Airports are also subject to strict regulations. The
Transportation Security Administration (TSA) is responsible for aviation security. As divisions of the US Department
of Homeland Security, the TSA and US Customs and Border Protection are responsible for certain civil aviation
security matters, including passenger and baggage screening at US airports.
RAIL TRANSPORT
The Federal Railroad Administration (FRA) regulates railroad safety and

equipment standards.
The FRA regulates handling hazardous shipments, locomotive and rail car inspection and repair requirements and
operating practices and crew qualifications. Most railroads can train their own locomotive engineers based on their
individual training programs that have been submitted to the FRA. Only a designated supervisor of locomotive
engineers (DSLE) can certify a locomotive engineer. Other regulations govern subsector fuel surcharges, worker
rights and environmental standards.
WATER TRANSPORT
Shipping companies are subject to a wide range of regulations.

The United States federal government maintains exclusive jurisdiction over its navigable waterways, including the
nation's deep-draft channels and harbors. Most of this authority is delegated to the US Coast Guard and the US
40 IBISWorld.com
Army Corps of Engineers. Under the US Department of Homeland Security, the Bureau of Customs and Border
Protection and the TSA also play an important role in regulation. The Merchant Marine Act (MMA) deals with marine
issues ranging from workers' rights to security on the seas. A provision within the MMA, known as the Jones Act,
states that all ships carrying cargo or passengers between US ports must be built in the United States, be US-
flagged and be manned and owned by US citizens. This provision in effect shields US companies from foreign
competition on domestic routes.
All port operators must meet the minimum standards for security outlined in the Maritime Transportation Security Act
of 2002. Common security regulations include requirements for lists of all cargo coming into ports and the
installation of radiation detectors at key ports. Moreover, the Transportation Worker Identification Credential (TWIC)
is required for workers that need access to secure areas in maritime facilities and vessels. This act also requires
vessels and port facilities to conduct vulnerability assessments and develop security plans that may include
container-screening procedures, among other activities.
PIPELINE TRANSPORT
The primary regulator of the pipeline subsector is the Federal Energy

Regulatory Commission (FERC).
FERC Order No. 636 states that pipeline operators may not buy or sell gas, effectively keeping pipeline companies
from leveraging their infrastructure to control energy supply. While the FERC regulates interstate transportation,
individual state agencies have authority over the pipeline transport of products which occur wholly within their state.
The Office of Pipeline Safety (OPS), which is part of the US Department of Transportation, is responsible for
regulating and assessing the safety and environmental performance of pipeline operators. Other permitting and
regulatory agencies include the US Army Corps of Engineers, the US Fish and Wildlife Service, the Bureau of Land
Management and the US Forest Service.
OTHER REGULATIONS
Aside from the aforementioned regulations, there are many local, state
and federal regulations relevant to the sector.
In general, the level of regulation is correlated with the level of security, safety and environmental risk associated
with what is being transported and how it is being transported. Regulation can also be created to control supply and
demand. For instance, many municipalities limit the number of taxi operators they license to control congestion and
limit competition. In many jurisdictions, the government creates monopolies for public transit operators, especially if
these are natural monopolies.
COVID-19 HEALTH AND SAFETY REGULATIONS
In response to CDC guidance, various levels of regulation have been

implemented in the United States to discourage public gathering, large
events or crowded work environments, due to the COVID-19 (coronavirus)
pandemic.
Those regulations have varied from state to state, with little federal regulation implemented. Most states have
implemented various, “shelter-in place” orders this year and last, in line with CDC guidance, while placing limitations
on the ability of businesses to operate industry facilities at full capacity. Although each state is at different points in
the re-opening process as vaccinations efforts are ramped up, operators continue to encounter regulatory issues
when re-introducing workers to their businesses. Altogether, many sector operations have been classified as,
“essential” throughout the pandemic. This means that most establishments remained operational, although
operators have implemented measures to ensure employee safety. Certain industries in this sector have been
impacted more seriously than others. For more industry-specific information, please refer to our collection of industry
reports. Though some of these measures have reduced total capacity, the ability to remain open and operational
has benefitted the industry throughout the pandemic.
Industry Assistance The level of industry assistance is Low and the trend is Steady
Overall, the Transportation and Warehousing sector receives a low level

of assistance.
Some assistance comes from various industry associations that assist operators in lobbying, regulations, public
relations and standards. For example, the International Brotherhood of Teamsters is one of the largest labor unions
41 IBISWorld.com
in the United States, with 1.4 million members. The union acts on behalf of freight drivers and warehouse workers.
Some subsectors also receive regulatory protections. For instance, the Jones Act requires that all goods or
passengers moved by water among US ports be carried in US-built and US-flagged vessels. These vessels must
also be owned by US citizens and crewed by US citizens or US permanent residents. As result, domestic shippers
are protected from foreign competition on domestic routes. The United States Postal Service is also part of the
federal government, receiving federal funding and many other advantages offered to government agencies.
Similarly, local and state assistance is provided to regional public transit companies, such as the Metropolitan
Transit Authority in New York City.
COVID-19 (coronavirus) Assistance
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020 by the Trump
administration, provided more than $2.2 trillion in economic assistance for US businesses and consumers. Included
in the act were payroll protection loans, which have enabled industry operators to sustain their payroll and keep
employees in their jobs. This helped industry operators significantly in their efforts to compensate for revenue
declines in 2020. Little aid was provided for the rest of the year, pressuring operators to reduce payroll where
necessary, however further coronavirus aid is anticipated in early 2021. The new Biden administration is hoping to
provide a substantial economic relief bill to combat the effects of the pandemic, although specific details of
relevance to this industry are yet to emerge.
42 IBISWorld.com
Key Statistics
Industry Data
Freight
2012 1,184,332 465,509 1,280,076 1,199,231 5,993,506 N/A N/A 305,099 N/A 112
2013 1,209,749 495,706 1,320,995 1,240,467 6,071,775 N/A N/A 310,814 N/A 116
2014 1,268,156 528,461 1,468,805 1,386,418 6,320,990 N/A N/A 322,961 N/A 121
2015 1,276,207 550,837 1,750,334 1,666,031 6,790,263 N/A N/A 333,999 N/A 122
2016 1,273,454 558,982 2,087,232 2,002,010 7,235,465 N/A N/A 341,037 N/A 123
2017 1,313,038 577,515 2,365,757 2,278,518 7,542,286 N/A N/A 349,773 N/A 128
2018 1,386,630 602,828 2,660,447 2,634,929 7,837,082 N/A N/A 366,062 N/A 136
2019 1,416,706 608,088 2,907,597 2,877,806 8,254,772 N/A N/A 374,683 N/A 139
2020 1,160,779 460,770 2,753,868 2,696,135 7,593,468 N/A N/A 337,983 N/A 132
2021 1,262,423 523,901 3,302,554 3,265,164 8,339,946 N/A N/A 360,060 N/A 140
2022 1,361,687 577,920 3,679,757 3,654,734 8,952,399 N/A N/A 380,533 N/A 145
2023 1,424,088 611,961 3,998,975 3,971,782 9,433,972 N/A N/A 394,326 N/A 147
2024 1,470,131 631,381 4,284,476 4,255,342 9,845,895 N/A N/A 405,396 N/A 150
2025 1,510,638 648,746 4,544,158 4,513,258 10,212,984 N/A N/A 415,235 N/A 153
2026 1,552,139 665,366 4,797,547 4,764,924 10,578,792 N/A N/A 425,259 N/A 155
Annual Change
Freight
Year (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2012 2.62 0.47 1.66 1.96 1.34 N/A N/A 0.47 N/A 1.20
2013 2.14 6.48 3.19 3.43 1.30 N/A N/A 1.87 N/A 3.58
2014 4.82 6.60 11.2 11.8 4.10 N/A N/A 3.90 N/A 3.67
2015 0.63 4.23 19.2 20.2 7.42 N/A N/A 3.41 N/A 1.36
2016 -0.22 1.47 19.2 20.2 6.55 N/A N/A 2.10 N/A 0.61
2017 3.10 3.31 13.3 13.8 4.24 N/A N/A 2.56 N/A 3.85
2018 5.60 4.38 12.5 15.6 3.90 N/A N/A 4.65 N/A 6.74
2019 2.16 0.87 9.28 9.21 5.32 N/A N/A 2.35 N/A 1.72
2020 -18.1 -24.2 -5.29 -6.32 -8.02 N/A N/A -9.80 N/A -4.70
2021 8.75 13.7 19.9 21.1 9.83 N/A N/A 6.53 N/A 5.70
2022 7.86 10.3 11.4 11.9 7.34 N/A N/A 5.68 N/A 3.93
2023 4.58 5.89 8.67 8.67 5.37 N/A N/A 3.62 N/A 1.54
2024 3.23 3.17 7.13 7.13 4.36 N/A N/A 2.80 N/A 1.72
2025 2.75 2.75 6.06 6.06 3.72 N/A N/A 2.42 N/A 1.74
2026 2.74 2.56 5.57 5.57 3.58 N/A N/A 2.41 N/A 1.78
Key Ratios
Imports/ Exports/ Revenue per Wages/ Employees per
IVA/Revenue Demand Revenue Employee Revenue estab.
Year (%) (%) (%) ($'000) (%) (Units) Average Wage ($)
2012 39.3 N/A N/A 198 25.8 4.68 50,905
2013 41.0 N/A N/A 199 25.7 4.60 51,190
2014 41.7 N/A N/A 201 25.5 4.30 51,093
2015 43.2 N/A N/A 188 26.2 3.88 49,188
2016 43.9 N/A N/A 176 26.8 3.47 47,134
2017 44.0 N/A N/A 174 26.6 3.19 46,375
2018 43.5 N/A N/A 177 26.4 2.95 46,709
2019 42.9 N/A N/A 172 26.4 2.84 45,390
2020 39.7 N/A N/A 153 29.1 2.76 44,510
2021 41.5 N/A N/A 151 28.5 2.53 43,173
2022 42.4 N/A N/A 152 27.9 2.43 42,506
2023 43.0 N/A N/A 151 27.7 2.36 41,798
2024 42.9 N/A N/A 149 27.6 2.30 41,174
2025 42.9 N/A N/A 148 27.5 2.25 40,658
2026 42.9 N/A N/A 147 27.4 2.21 40,199
Figures are inflation adjusted to 2021
43 IBISWorld.com
Additional Resources
Additional US Department of Transportation
Resources http://www.transportation.gov
US Army Corps of Engineers

http://www.usace.army.mil
Federal Energy Regulatory Commission

http://www.ferc.gov
Industry Jargon AUTOMATED GUIDED VEHICLES (AGVS)

AGVs are automated robots that are often used to move and handle materials, along with other applications.
JONES ACT
A provision in the Merchant Marine Act that dictates that all ships carrying cargo or passengers between US ports
must be US built, be US-flagged and be manned and owned by US citizens.
REVENUE TON MILES

A measure of freight volume. Calculated by multiplying shipped freight in tons by the number of miles it's shipped.
Glossary BARRIERS TO ENTRY

High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for
new companies to enter an industry.
CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than
$0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of
capital for every $1 of labor.
CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e.
year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving
only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using
the US Bureau of Economic Analysis’ implicit GDP price deflator.
DOMESTIC DEMAND
Spending on industry goods and services within the United States, regardless of their country of origin. It is derived
by adding imports to industry revenue, and then subtracting exports.
EMPLOYMENT
The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers
and executives within the industry.
ENTERPRISE
A division that is separately managed and keeps management accounts. Each enterprise consists of one or more
establishments that are under common ownership or control.
ESTABLISHMENT
The smallest type of accounting unit within an enterprise, an establishment is a single physical location where
business is conducted or where services or industrial operations are performed. Multiple establishments under
common control make up an enterprise.
EXPORTS
Total value of industry goods and services sold by US companies to customers abroad.
IMPORTS
Total value of industry goods and services brought in from foreign countries to be sold in the United States.
INDUSTRY CONCENTRATION
An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top
players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUE
44 IBISWorld.com
The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other
operating income from outside the firm (such as commission income, repair and service income, and rent, leasing
and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale
of fixed tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)

The market value of goods and services produced by the industry minus the cost of goods and services used in
production. IVA is also described as the industry's contribution to GDP, or profit plus wages and depreciation.
INTERNATIONAL TRADE
The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For
exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20%. Imports/domestic demand:
low is less than 5%, medium is 5% to 35%, and high is more than 35%.
LIFE CYCLE
All industries go through periods of growth, maturity and decline. IBISWorld determines an industry's life cycle by
considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments;
the amount of change the industry's products are undergoing; the rate of technological change; and the level of
customer acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENT
Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by self-
employed individuals.
PROFIT
IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability. It is calculated as
revenue minus expenses, excluding interest and tax.
REGIONS
West | CA, NV, OR, WA, HI, AK
Great Lakes | OH, IN, IL, WI, MI
Mid-Atlantic | NY, NJ, PA, DE, MD
New England | ME, NH, VT, MA, CT, RI
Plains | MN, IA, MO, KS, NE, SD, ND
Rocky Mountains | CO, UT, WY, ID, MT
Southeast | VA, WV, KY, TN, AR, LA, MS, AL, GA, FL, SC, NC
Southwest | OK, TX, NM, AZ
VOLATILITY
The level of volatility is determined by averaging the absolute change in revenue in each of the past five years.
Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%;
and low volatility is less than ±3%.
WAGES
The gross total wages and salaries of all employees in the industry.
45 IBISWorld.com
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This product has been supplied by IBISWorld Inc. (‘IBISWorld’) solely for use by its authorized licenses strictly in
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INDUSTRY REPORT 48-49

Transportation and Warehousing in the

Dan Cook | July 2021

IBISWorld.com 1-800-330-3772 [email protected]

INDUSTRY AT A GLANCE................................ 7 MAJOR COMPANIES...................................... 30

INDUSTRY PERFORMANCE..........................10 OPERATING CONDITIONS............................ 37

PRODUCTS & MARKETS............................... 17 Industry Data..................................................................... 43

About This Industry

Major Players USPS

United Parcel Service Inc.

American Airlines Group Inc.

Kinder Morgan Inc.

Main Activities The primary activities of this industry are:

Transit and ground passenger transportation

Support activities for transportation

Postal, courier and messengers

Warehousing and storage

The major products and services in this industry are:

Rail, transit and ground passenger transport

Postal services, couriers and messengers

Warehousing, storage and other services

RELATED INTERNATIONAL INDUSTRIES

$1.3tr 6.6% 0.2%

Annual Growth Annual Growth Annual Growth

$82.1bn Industry Structure

Annual Growth Annual Growth POSITIVE IMPACT

Annual Growth Annual Growth Annual Growth Key Trends

 Higher oil prices and strong industrial and trade performance

8m  The rise in nonemployers has driven an expansion in the

 An increase in fuel costs would pressure profit for operators

Products & Services Segmentation

Major Players SWOT

High Profit vs. Sector Average

High Capital Requirements

High Revenue Growth (2021-2026)

Low Revenue Growth (2005-2021)

Key External Consumer spending

Freight transportation services index

Total trade value

World price of crude oil

Industrial production index

Current Prior to 2020, the Transportation and Warehousing sector expanded in

MACRO TRENDS AND PERFORMANCE

Sector performance is dependent on numerous key macroeconomic

OIL PRICES INFLUENCE PERFORMANCE

Although the sector performed well in years prior to 2020 and is

INTERNAL DYNAMICS AND KEY STATISTICS

chain management, has grown.

Historical Performance Data

ECONOMIC CONDITIONS AFFECTING GROWTH

The sector will likely benefit from improving macroeconomic conditions

The Transportation and Warehousing sector will likely continue to be

Performance Outlook Data

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Products & Services