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SECTION 1 U.S. Economy Depends on Freight Transportation Introduction to the Freight Transportation Industry Every product purchased must be transported. The nation's freight system faces increasing challenges. These challenges involve both the public and private sectors and the decisions they make. Interests and priorities in decision making in the public and private sectors are not always aligned, leading to inefficiencies in meeting the country's freight transportation needs. However, public sector officials can take concrete steps to increase public and private cooperation. If the United States does not fully meet its demand for the efficient movement of goods, the consequences will include lost jobs and a lower standard of living. Free Flow of Goods Essential to Economic Competitiveness The freight transportation and logistics industry is of growing importance to the U.S. econ- omy. As the U.S. economy is increasingly linked to the economies of other countries, supply chain and transportation networks become more complex and more critical to commerce and to workers whose jobs depend on these linkages. In the United States, the transportation and supply management industry is complex, contain- ing public sector elements such as the road network and waterways and private sector elements such as freight railroads, trucking companies, and private warehouses. All of these elements are interdependent. The growing role of goods movement in the U.S. economy also reflects profound changes at work across the nation where the agricultural and manufacturing economy of the twentieth cen- tury has evolved, changing the mix of jobs held by the U.S. workforce. Services are now the fastest-growing portion of the economy. The freight transportation and logistics sector has the second fastest rate of growth and supports the integration of all other sectors. The efficient movement of goods is essential to the competitiveness of the U.S. economy. A competitive economy needs efficient freight services to move goods reliably at minimum cost. Adequate freight infrastructure supports continued growth in export-related jobs as well as pro- vides affordable consumer products. It also supports export manufacturing and agriculture jobs Freight transportation by making producers more competitive with those in foreign countries. is fundamental to our Without an adequate freight system, the prices of all goods we consume will increase, reduc- way of life. ing what we can afford to buy and lowering our standard of living. 2