Looking Into Transportation

Throughout history, transportation has played a fundamental role in the development of civilization. Ancient peoples used animals and rudimentary carts to transport people and cargo over long distances. Around the fourth millennium B.C. the Egyptians developed the first crude waterborne vessels, which they used to navigate the Nile River. By 600 B.C. the Phoenicians traveled on ships as far as what is now Great Britain, engaging in trade and colonizing areas along the way. A few hundred years later, the Roman Empire expanded across the Western world, spreading trade and technology to its neighbors. It created a road system so extensive that it was often said, "All roads lead to Rome."

Over the following two thousand years, ships provided the primary means of engaging in commerce and exploration across vast oceans. On land, camels, horses, and other animals transported people and goods across large distances. Without the ability to travel and transport goods, civilizations would not have been able to trade with one another or to share technological and cultural advances.

Today the transportation industry continues to drive economic, cultural, and technological progress. New methods of travel have emerged to replace ancient ones. The industry is made up of a number of subindustries: the automotive, shipping, trucking, airline, mass transit, passenger railroad, and rail freight industries.

FROM CLIPPER SHIPS TO CABOOSES

The history of the United States illustrates the impact of the transportation system on every facet of economic, political, and social development. In the

The transportation industry is complex and turbulent. More than any other industry, shipping will continue to be influenced by the world market. (Copyright © 2005, Kelly A. Quin. Reproduced by permission.)

fifteenth century, European explorers landed on the shores of North America. Their ships had carried them thousands of miles in search of spices, precious metals, and other exotic goods. Settlers soon followed, establishing communities along the eastern coast that, by the eighteenth century, had been joined into colonies. They were connected by bumpy paths and primitive roads, which the colonists traveled on horseback or by foot.

As the United States achieved independence and its population grew, many settlers loaded their families into covered wagons and traveled west in search of opportunity. The wagon trails that rutted the prairies soon became vital lifelines, enabling merchants to transport goods to markets and ports. As it carried the mail, the Pony Express became an important medium for communicating across a country that was growing ever larger.

As people moved inland, the need for a national transportation system became acute. In the early 1800s the federal government built the Cumberland Road, which stretched from Cumberland, Maryland, to Vandalia, Illinois—a distance of 592 miles. At about the same time, Robert Fulton built the first steamboat, launching an era of canal transportation highlighted by the opening of the Erie Canal in New York. In 1830 the railroad—a wondrous new form of transportation—was imported from Great Britain. By the middle of the century, railroad tracks crisscrossed a good portion of the North American landscape.

The railroad had a profound effect on the development of industry in the United States. For the first time in the nation's history, large quantities of goods could be transported across long distances. Factories sprang up throughout the country, creating urban centers filled with new homes for many people. The railroad even lured politicians, who traveled the country's rails on "whistle-stop" tours, visiting small towns and communities to garner votes—and often promising more jobs to get those votes.

At the end of the nineteenth century, the invention of the automobile paved the way for yet another transportation-based social revolution. Henry Ford developed the first assembly-line production method, and by 1913 his company was churning out automobiles that most Americans could afford: The Ford company sold 15 million units of its Model T between 1908 and 1913. During the next two decades automobile manufacturing became the country's largest industry.

The automobile made it easier and more convenient for people to undertake both short- and long-distance travel. This new mobility enabled many Americans to move out of the cities into suburban areas. Federal, state, and local governments scrambled to pave roads that connected cities, small towns, and rural areas, as well as highways that went from one part of the country to another.

In 1903 Wilbur and Orville Wright launched the age of air travel in Kitty Hawk, North Carolina, by successfully flying a small powered aircraft. In 1914 the first airline passenger service was started in Florida. With the first international passenger service from London to Paris in 1919, long-distance air travel began to spread throughout the world. With the introduction of the jet engine in the 1950s, international travel became big business. At the start of the twenty-first century, air travel within the United States and around the world is fast, safe, and relatively inexpensive.

In recent years, the transportation industry has faced a number of new challenges. Terrorists have targeted airlines, railroads, and subways. Deregulation has led many companies to alter their operating practices, and technological advances have changed their methods. In some cases, technology has blurred the traditional distinctions between industries. As a result, the future of the U.S. transportation industry is hard to predict. New technology, new fuels, and changes in demographics and consumer taste may rewrite the transportation story in its next chapter.

THE AUTO INDUSTRY

Throughout the 1950s and 1960s the U.S. auto industry grew dramatically. Cars got ever bigger and flashier, and thousands of Americans got high-paying jobs in car and truck manufacturing. From the 1970s on, however, the industry experienced a painful cycle of recessions and recoveries, fueled partly by the national economy and partly by energy prices. Smaller auto companies disappeared, leaving the Big Three—Chrysler, Ford, and General Motors—to battle it out. But they felt another pressure: foreign competitors fiercely promoted their compact, fuel-efficient, cost-effective cars. By 1991 Japanese manufacturers had a firm grasp on a quarter of the American car and truck market. It seemed as if the glory days of the U.S. auto industry were skidding away.

On the Road Again

In the early 1990s, the Big Three made major changes in the way they operated. They streamlined manufacturing, developed new technologies, and designed more fuel-efficient vehicles. They also introduced light trucks and sport utility vehicles, which became highly popular.

The automobile industry has experienced financial difficulties since the 1980s. (Photograph by Kelly A. Quin. Thomson Gale. Reproduced by permission.)

In 1997 the Big Three had about fifty-six auto-manufacturing plants in North America, providing jobs for more than 206,000 workers. Nearly 1 million workers were employed by industry suppliers, and 1.1 million others had jobs at dealerships.

But in 2002 sales at The Big Three dropped thirty percent. Unemployment, triggered by the loss of manufacturing jobs, was a major factor. Incentive packages such as "no money down" and "cash back" brought in some customers, but the industry was still hampered by sharply rising gas prices, skyrocketing health-care costs for autoworkers, and increasing foreign competition. In April 2006, GM announced a first-quarter loss of $323 million.

Autoworkers are some of the nation's highest-paid employees, earning as much as $50 per hour (including benefits). The industry's efforts to reduce costs have had a direct effect on their job security. Manufacturers have cut some eighty thousand jobs since 2001 in a bid to improve productivity and profitability.

Auto manufacturers are now looking to technology to change—and save—their industry. Increasingly, factory tasks are completed by robots and other machines. Many autos have parts made from plastic and composite materials that allow more flexibility in design and are much lighter than steel. Some are hybrids: cars that combine two or more sources of power—gasoline and a rechargeable battery, for example, or gasoline plus a nonpetroleum-based fuel such as ethanol. Almost all new cars and trucks have features developed for the aerospace industry. Devices that use the Global Positioning System, for example, which are standard on

Many trucking companies have trouble making profits because expenses, especially labor costs, continue to rise. (© F. Damm/zefa/Corbis.)

many U.S. cars, tell drivers exactly where they are and exactly how to get where they want to go. Some alarm systems already use radar technology to detect objects within a certain distance. Vehicles of the future may be equipped with night-vision capabilities.

Over the next decade about a quarter of a million automobile workers will be reaching retirement age. Many of their jobs should become available to young job seekers. Those who have technological skills and interests may find eager employers in the auto industry.

Automotive Parts and Dealerships

The U.S. automotive parts industry employs more than eight hundred forty thousand workers. They manufacture everything from shock absorbers to pistons to windshield wipers. Restructuring in the industry and foreign competition have put pressure on these companies: many small suppliers may go out of business during the next decade while larger companies expand and send much of their manufacturing overseas.

The forecast for automobile dealerships is similar. About 210 dealerships are expected to close by 2010, largely because of consolidation. To survive, dealers are maintaining staffs of highly skilled personnel to service cars' many technologically advanced parts. They are also extending technology to customer service: interactive equipment, such as CD ROM-based video, helps salespeople explain the features of their cars and trucks. Future innovations may include automobile simulators, which would enable customers to "test drive" cars without leaving the showroom.

THE TRUCKING INDUSTRY

In the early 1980s the federal government deregulated the massive trucking industry, allowing many trucking companies to set their own rates. This move set the stage for a period of fierce competition, in which thousands of small trucking companies went bankrupt or were absorbed by the industry's giants.

Although a streamlined industry has struggled through national cycles of growth and recession, it is now on firm ground. Trucking is the largest provider of total U.S. freight service in terms of revenue, accounting for almost ninety percent of the U.S. freight market. The industry is made up of more than five hundred seventy thousand private and government fleets with more than 3.4 million drivers. Many long-distance trucking firms, which account for the majority of jobs in the industry, have trouble making a profit because of the expense of their operations—labor costs and fuel prices make up the largest parts of their budgets.

However, just as new methods and technology have shaped the automotive industry, trucking companies have also modified their operations. For example, advances in the rail freight segment of the transportation industry have made it less feasible to use trucks as a primary means of shipping goods over long distances. In 1980 it was common for trucks to haul goods more than one thousand miles; now most carriers haul goods fewer than five hundred miles. Many of them now fit into the inter-modal transport system: they deliver trailers filled with goods to railroads, which haul the trailers across the country to depots where other truck drivers are waiting to pick them up and deliver the goods.

Many trucking companies use computers and satellites to track and direct the flow of goods transported on their carriers. Using a computerized database, workers can schedule pickups and deliveries, monitor truck locations, and record customer data. This information can then be relayed to computer terminals in the trucks.

The Future of Trucking

The trucking industry is expected to continue its dominance of freight transport. Profits may be slim because of rising expenses, especially the cost of labor: for some trucking companies, labor costs account for seventy percent of their total expenses. While the economy dictates the amount of freight moved by trucks, demand for truck drivers should remain strong through 2014, especially in the long-distance sector of the industry. Two factors (a shortage of drivers, including an estimated twenty thousand long-haul drivers) and the huge number of workers expected to retire in the next decade (some experts say more than two hundred nineteen thousand drivers) may determine the future of the industry.

THE AIRLINE INDUSTRY

During the twentieth century, the airline industry grew into a multibillion-dollar global network. For many years it was highly controlled by the government, which made it stable but, many owners and consumers said, lacking in real competition.

That all changed in 1978, when the industry was deregulated. The competition that followed bankrupted many companies. Some just faded into oblivion, while others were absorbed by their competitors. To lure customers, they engaged in "fare wars," offering dramatic discounts on ticket prices—a boon to consumers but not to the industry's profit margins. Many airlines downsized their operations by reducing new aircraft orders or buying smaller planes. Many negotiated new union contracts. Smaller airlines sprang up and became highly profitable by carving out small-market niches—and taking business away from the larger airlines.

The industry was still flying in uncertain skies when the events of September 11, 2001, dealt it a severe blow. After the attacks on the World Trade Center in New York and the Pentagon, the industry saw a significant decrease in business. Many people were afraid of hijackings in the sky or discouraged by the delays and inconvenience caused by the new security procedures at airports. Airlines responded with lower fares, vacation packages, and flying incentives.

Most observers expect modest long-term growth in domestic air travel and slightly better growth in international travel. Factors that may affect the industry include the health of the nation's economy, rising fuel prices, new technologies, and government regulations. The number of jobs in the industry is expected to increase by nine percent over the next decade. About seventy percent of air industry jobs are in ground occupations.

New Technology

Technological change can be felt in all parts of the airline industry, from security systems at airports to the materials used in airplane construction. Military planes are required by law to have sophisticated navigational equipment; governmental agencies want to make the same equipment mandatory for commercial aircraft. Traffic control technology is being improved to prevent mid-air and other types of aircraft collisions. New satellite communication systems make planes easier to track when they are flying over the world's oceans.

THE WATER TRANSPORTATION INDUSTRY

After years of decline, the U.S. deep-sea shipping industry appears to be stabilizing. Competition from foreign vessels has been reduced because the standards of operation have become more uniform for all vessels, making the costs of operating U.S. ships comparable to foreign-flagged ships. Moreover, federal support through a maritime security subsidy has aided the industry.

The health of the rail freight industry depends to a large extent on strength of the industries it serves, such as the automobile, steel, and construction industries. (AP Images.)

The outlook for U.S. domestic shipping remains strong. American fleets that carry petroleum products, ore, steel, and other goods through the Great Lakes and other inland waterways should experience a period of slow but steady growth.

THE RAIL FREIGHT INDUSTRY

In 1980 Congress partially deregulated the railroads, which allowed carriers to control the scheduling of their own trains, set their own rates, and adjust service to meet customer needs. Since then, freight volume has almost doubled: trains now carry eight percent of all U.S. commercial freight, including motor vehicles, chemicals, grain, and coal. Meanwhile, freight rates have dropped about 1.5 percent each year.

However, deregulation had a profound effect on many railroad workers. Railroad employment plunged from nearly four hundred thousand in 1983 to one hundred twelve thousand in 2004 and is expected to decline through 2014. New technology allows railroads to reduce the sizes of their train crews. Only a few years ago standard freight trains would have had crews of four; most freight trains now have crews of only two or three workers. By reducing their labor costs, the largest part of their operating budgets, railroad companies that carry freight have increased their profits.

Intermodal Freight

Intermodal freight is revolutionizing the way freight trains operate. Traditionally, trains were made up of cars carrying freight slated for different destinations. The trains were brought to a yard where they were divided, by car, onto different tracks classified by destination. Then the cars on each track were reassembled into outbound trains. That method was time-consuming and costly.

Intermodal freight employs a different strategy. Truckers drive their trailers filled with freight to a train yard, where the trailers are loaded directly onto flatcars (a type of rail car), eliminating the need to couple and uncouple train cars. In the past twenty-five years, this type of traffic has grown by almost two hundred percent.

The Future of Rail Freight

Industry observers expect growth in the rail freight industry to be moderate through 2014. By improving delivery times and reducing shipping rates, railroads are able to compete with trucks, ships, and aircraft. Intermodal freight has also had a positive effect. However, the health of the industry may depend on the condition of the industries served by rail, including agriculture, automobiles, construction, paper, and steel.

MASS TRANSIT

The 1970s were lucrative years for mass transit. As an energy crisis gripped the nation, many consumers turned to buses, trolleys, railroads, and subways. Consequently, the federal government invested billions of dollars in the nation's transportation systems.

During the 1980s, however, when the national economy became stronger, the federal government sharply cut mass transit subsidies. Many cities were forced to abandon efforts to upgrade their systems. Some had to reduce operations, forgo repairs, and raise fares.

Two decades later the federal government again decided to help cities improve their transit systems. New subways are now running in Los Angeles, Miami, and Seattle. As gas prices continue to rise, more and more people are turning to public transportation.

Although long-distance buses continue to operate across the country at affordable prices, many riders prefer to travel by plane or passenger rail. Amtrak, the nation's largest passenger railroad, operates some 265 intercity passenger trains each day, carrying more than 25.4 million passengers each year.

Still, Amtrak has been losing money. According to a report by the U.S. Secretary of Transportation in February 2005, Amtrak cannot pay for innovative services because it is spending so much money "running trains that nobody rides between cities that nobody wants to travel between." Officials have proposed an end to federal subsidies for Amtrak. Instead, the federal government would help state and local agencies fund improvement and maintenance of tracks, bridges, and stations, thus freeing Amtrak to concentrate on running the trains. Some believe this would save Amtrak, while others fear it would bring an end to intercity passenger service.

TRANSPORTATION—AND YOU

This volume describes occupations available in the transportation field. As you read, keep in mind that technology is constantly shaping the industry and is playing a greater role in its future. Many industry employers value workers who have computer skills and technical training.