It’s only natural that most of us wouldn’t typically give a second thought to the almost countless trucks, trains, and ships moving goods from day to day.
But we should. Because a lot of what they’re hauling is on its way to markets far from Texas. And what we export (and how much) matters a lot to our state.
In 2014, Texas merchandise exports were valued at $288 billion, supporting an estimated 1.1 million jobs in the state. And it’s worth noting that there is a relationship between the growth in Texas exports and the creation of new jobs in the state.
And it’s not just the number of jobs. The type of jobs we’re talking about is important, too. That’s because workers in export-intensive service industries earn almost 20 percent more than comparable workers in other service industries.
Nearly 30 percent of gross domestic product growth in recent years resulted from growth in exports. So, if exports are growing, that’s a pretty good sign that the rest of the economy is growing, too.
More than 90 percent of the world’s consumers live outside the U.S., and a large share of those consumers represent rich markets for what we as a nation produce. If our industries were only selling domestically, they’d be missing out on enormous opportunities.
It’s for these reasons and more that we recently took a close look at the role of transportation in Texas exports. Our new series of reports, Moving Texas Exports, includes a wealth of statistics on the movement of exports across our transportation system. The series examines that system’s importance to six specific commodities central to our exporting activity. Our research findings also address issues related to our ports of entry along the Mexico border, as well as the potential impacts of the Panama Canal expansion.
That expansion could mean a lot to our exports of liquefied natural gas (LNG). The expanded canal will be able to handle 80 percent of the world’s LNG tanker fleet (as opposed to 8 percent currently). The canal’s expansion could thereby reduce LNG shipping costs by as much as 25 percent, and Texas will be well positioned to serve global demand for LNG given the two export LNG terminals now under construction in Freeport and Corpus Christi.
Our exports to Eastern Asia (valued at approximately $26 billion in 2012) could also benefit. Some of the state’s exports currently shipped through a California port to Eastern Asia could be diverted to a Texas port and then moved through the expanded Panama Canal.
Our research also highlights Texas’ exports to Mexico, which is our state’s most important trading partner in terms of export value. In 2012, Texas exports to Mexico amounted to about $95 billion, which is more than three times the value of what we send to Eastern Asia.
In 2012, 68 percent of the value of Texas’ exports to Mexico moved by truck, exiting the US through gateways in Texas. Our study describes a number of transportation issues related to Texas border ports of entry that can add cost and inefficiencies.
Border delays are well-documented and of primary concern, and are attributed to both border infrastructure (such as the design of the border facilities and inadequate crossing capacity) and border operations, which include inadequate staffing to process vehicles through border facilities.
When it comes to exports, Texas’ transportation system (highways, rail, pipelines, airports, border crossings, intermodal facilities and marine ports) play an important role in connecting all the elements of an export supply chain. The capacity and condition of Texas’ transportation system and related policies that support the system can affect the cost and reliability of moving exports to overseas markets and, therefore, can impact the economic competitiveness of Texas’ export trade.
As the United States has steadily recovered from one of the worst economic downturns in our history, export growth has been one of the U.S. economy’s greatest success stories. And because of our state’s dominant role in that economy, this is a success story for Texas as much as it is for America.
Ginger Goodin is the Director of TTI’s Transportation Policy Research Center.
Jolanda Prozzi is a TTI Research Scientist.