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Suggested Citation:"Chapter 3 - Background." National Academies of Sciences, Engineering, and Medicine. 2016. Using Commodity Flow Survey Microdata and Other Establishment Data to Estimate the Generation of Freight, Freight Trips, and Service Trips: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/24602.
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Suggested Citation:"Chapter 3 - Background." National Academies of Sciences, Engineering, and Medicine. 2016. Using Commodity Flow Survey Microdata and Other Establishment Data to Estimate the Generation of Freight, Freight Trips, and Service Trips: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/24602.
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Suggested Citation:"Chapter 3 - Background." National Academies of Sciences, Engineering, and Medicine. 2016. Using Commodity Flow Survey Microdata and Other Establishment Data to Estimate the Generation of Freight, Freight Trips, and Service Trips: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/24602.
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14 This chapter provides basic information about urban and metropolitan economies, urban supply chains, and the generation of FSA. This chapter is intended to help the reader develop a solid understanding of the interconnections between the economy, supply chains, and the generation of FSA. Urban and Metropolitan Economies Quantifying the relationship between FSA and its independent variables—the primary goal of this research—necessitates a basic understanding of the economic and logistical roots of these activities. The magnitude and extent of FSA often is underestimated. To a great extent, this reflects the natural human tendency to only register phenomena—such as large trucks—that seems discordant with the rest of the environment. The bulk of FSA, which primarily uses small trucks and delivery vans, usually goes unnoticed. Facilities like ports and distribution centers, with high volumes of large trucks, are easily recognized as large generators. In contrast, few people would guess that the food and retail sector in a large city generates traffic volumes several times larger than those at ports and distribution centers. These misperceptions often lead professionals to fail to ensure that FSA needs are properly addressed. This, in turn, creates additional congestion and pollution, and aggravates the negative externalities produced by FSA. C h a p t e r 3 Background Throughout the guidebook, FSA denotes all expressions of freight and service activities (e.g., flows of cargo, freight vehicle trips, service trips). The term metric of FSA (or simply FSA metric) refers to the different ways of measuring FSA (e.g., FG/attraction/production, FTG/attraction/production, STG/attraction/ production). The economic data about number of establishments and employment provide a good way to get a sense of the true extent of FSA. To this effect, it is useful to classify industry sectors in two groups: freight intensive sectors (FIS) and non-freight intensive sectors (non-FIS). Generally speaking, in the FIS of the economy, consumption and production of cargo is central to the activity performed by the establishment. Conversely, in the non-FIS group, production and consumption of cargo are of secondary importance. Table 2 shows FIS and non-FIS statistics for metropolitan statistical areas (MSAs). In Table 2, large portions of the economy—about 45% of the establishments and half the employment—correspond to FIS. FIS does not convey the complete story, however, because all

Background 15 sectors of the economy—including the non-FIS—demand freight and services (such as photo- copier technicians, plumbers, and the like). The amount of FSA, and the resulting vehicular traffic, is substantial even in non-FIS sectors. The role of transportation policy is to ensure that public resources are allocated in a way that maximizes economic welfare. The allocation of public resources such as curb space must balance both the needs of the various users of transportation networks and their contributions to the economy and society. Reasonably accurate estimates of FSA—of the kind that could be produced with the guidebook models—provide transportation professionals with crucial infor- mation about the geographic locations of major FSA centers, their contributions to congestion and pollution, and their public space needs. With this information, policy makers can work to ensure that the FSA activity is performed in the most efficient manner. The economic and environmental impacts of improvements to FSA are tremendous. The various industry sectors in metropolitan economies play different roles (and/or interact) with international trade, manufacturing, local distribution of supplies, and service activities. The large facilities associated with international trade—airports, ports, intermodal complexes— the most visible of these activities—provide economic and physical linkages between international and local supply chains and economies. Manufacturing activities are essential for metropolitan economies. It is estimated that the 100 largest metropolitan areas are the origin or destination for 80% of the cargo transported in the United States, with a total value of $16.2 trillion (Tomer and Kane 2014). Manufacturing sites’ profile for freight and freight vehicle trips differs from that of, for instance, retail stores. Manufacturing sites tend to receive and send out large shipments of goods, usually using large trucks. In terms of total freight traffic, however, the manufactur- ing sector’s contribution is relatively small in mid-size and large metropolitan areas, though it undoubtedly generates a large portion of the total cargo volume and weight transported. Urban Number % Number % 11 Agriculture, Forestry, Fishing and Hunting 15,614 0.22% 142,779 0.12% 21 Mining, Quarrying, and Oil and Gas Extraction 21,929 0.31% 543,042 0.46% 22 Utilities 14,643 0.21% 616,818 0.52% 23 Construction 613,873 8.72% 6,240,668 5.25% 31-33 Manufacturing 271,633 3.86% 10,606,778 8.93% 42 Wholesale Trade 397,026 5.64% 6,301,619 5.31% 44-45 Retail Trade 990,533 14.07% 16,475,243 13.87% 48-49 Transport and Warehousing 195,853 2.78% 4,276,935 3.60% 72 Accommodation and Food Services 633,191 9.00% 13,494,478 11.36% Sub-Total 3,154,295 44.81% 58,698,360 49.42% 51 Information 127,025 1.80% 3,288,869 2.77% 52 Finance and Insurance 442,269 6.28% 6,120,740 5.15% 53 Real Estate and Rental and Leasing 344,711 4.90% 2,477,859 2.09% 54 Professional, Scientific, and Technical Services 840,912 11.95% 8,981,245 7.56% 55 Management of Companies and Enterprises 51,283 0.73% 2,797,857 2.36% 56 Administrative and Support and Waste Management and Remediation Services 377,025 5.36% 8,313,055 7.00% 61 Educational Services 95,136 1.35% 2,815,497 2.37% 62 Health Care and Social Assistance 801,554 11.39% 16,973,023 14.29% 71 Arts, Entertainment, and Recreation 119,354 1.70% 2,246,428 1.89% 81 Other Services (except Public Administration) 685,506 9.74% 6,066,754 5.11% Sub-Total 3,884,775 55.19% 60,081,327 50.58% Total of FIS + non-FIS 7,039,070 100.00% 118,779,687 100.00% 11,043 35,485 7,050,113 118,815,172 Unclassified Totals Establishments Employment Non-Freight Intensive Sectors (non-FIS) Freight Intensive Sectors (FIS) NAICS Description Table 2. Establishment and employment totals for macro and micro MSAs (2013).

16 Using Commodity Flow Survey Microdata and Other establishment Data to estimate the Generation of Freight, Freight trips, and Service trips deliveries and service activities fulfill a role comparable to that of the capillary system in a body by ensuring that all corners of the metropolitan economy are adequately sourced. In doing so, they produce vast amounts of FSA trips, several times larger than the amounts produced by manufacturing and large facilities like ports and airports. About 40% of the total FSA trips gen- erated by urban delivery and service activities correspond to deliveries to establishment in the food and retail sectors. In most cases, deliveries to urban areas are made using delivery vans and small trucks that typically represent 80% to 90% of the total freight traffic. These trips deliver small shipments with a relatively high frequency, because most commercial establishments in urban areas tend to have little or no storage space. Moreover, these establishments produce additional FSA in the form of waste and “reverse logistics” of returns and exchanges.

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TRB's National Cooperative Freight Research Program (NCFRP) Research Report 37: Using Commodity Flow Survey Microdata and Other Establishment Data to Estimate the Generation of Freight, Freight Trips, and Service Trips: Guidebook provides policy makers with improved establishment-level models that estimate the Freight Trip Generation (FTG), the number of vehicle trips produced and attracted at a given establishment; the Freight Production (FP), the amount of cargo produced by the establishment; and the Service Trip Attraction (STA), and the number of vehicle trips that arrive at the establishment to perform a service activity. These models, estimated with the best data available, provide tools to assess the various facets of the overall Freight and Service Activity (FSA) that takes place in urban and metropolitan areas. The models will allow transportation practitioners to conduct sound curb-management, properly size loading and unloading areas, support traffic impact analyses, and improve transportation planning and management efforts.

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