Morgan Researchers Focus on Freight

Just what impact does the freight industry have on the Maryland economy?

The short answer is a lot.

Research conducted at Morgan State University's National Transportation Center examined the economic impacts and developed a performance measure, a freight economic output (FECO) index, which can be used to compare Maryland's freight industry performance with national trends.

In a report entitled, "Measuring the Economic Contribution of the Freight Industry to the Maryland Economy," researchers Dr. Hyeon-Shic Shin, Dr. Sanjay Bapna, Dr. Andrew Farkas and Isaac Bonaparte found that nearly 70,000 people were directly hired by the freight industry, which helped sustain an additional 48,000 workers in various sectors. Every 100 jobs in freight transportation support an additional 70 jobs in other sectors. The study is based on a more conservative definition of the freight industry, unlike past studies.

"Some people may ask why the overall impact is smaller than they used see in past studies. The uniqueness of this study is a stringent definition of the freight iThe Port of Baltimore has a 50-foot-deep channel to accommodate larger vessels.ndustry as only sectors that move freight. Thus, freight-dependent sectors (e.g., manufacturing, wholesale, retail, etc.) were not included in order to avoid overestimation of the economic impact and to provide an accurate picture of the state of the freight industry in Maryland," said Dr. Hyeon-Shic Shin, the principal investigator and an assistant professor in the City & Regional Planning Program at Morgan.

Freight directly produces $4.9 billion of Maryland's gross domestic product, and every $100 spent in the freight industry creates an additional $76. The freight industry generated a total GDP of $8.7 billion in 2010.


The trucking industry accounted for 30 percent of freight-related employment and 29 percent of employee compensation; in 2011, the average annual trucking industry salary was $47,443, and more than 11,190 trucking companies were located in Maryland. Such economic growth is not without a trade-off; while large trucks accounted for only about 3% of the registered vehicles in the United States, they were involved in 10 percent of the fatal crashes in 2012. The research estimates the total cost of truck-involved crashes in Maryland in 2009 was about $625 million.

While the port and water sector accounts for just 3 percent of freight-related jobs, it has a large ripple effect - 17 percent of job impacts, 15 percent of employee compensation and 16 percent of Maryland's gross domestic product are attributed to port and water freight services. In 2011, Baltimore's port was No. 1 in the nation for cars, handling 551,000 vehicles, and it continues to set cargo records.

"The Panama Cannel expansion would be an opportunity for the Port to be the center of business activity," said Dr. Shin.

In terms of tonnage, 96 percent of shipments originating in Maryland and 86 percent bound for Maryland are moved by truck. Rail moves 2.23 percent of outbound shipments, but 14.13 percent of shipments coming into Maryland do so on trains. CSX moves 800,000 carloads here every year, including one million tons of metal products and nearly one million tons of chemicals. The tonnage of freight handled by rail is expected to increase 200 percent to about 50 million by 2035.

The FECO index will help decision makers understand the role each freight mode plays in the state and make informed investment decisions.

Dr. Shin stressed, "The economic impacts, especially jobs, and a new index to measure performance would be more tangible figures that the general public understands and which would help to mitigate negative perceptions of the freight industry, which is an indispensable element of the continuing economic development of the state."

Morgan State University, founded in 1867, is a Carnegie classified doctoral research institution offering more than 60 academic programs leading to bachelor's degrees as well as programs at the master's and doctoral levels. As Maryland's public urban university, Morgan serves a multi-ethnic and multi-racial student body and seeks to ensure that the doors of higher education are opened as wide as possible to as many as possible. For more information on Morgan State University, visit www.morgan.edu.
To read the entire report, click here.