Place Central to Metropolitan Trade and Freight Investment

In today’s global economy, metro areas are forging the key physical connections that bind different markets together. From electronics in Portland and San Diego to metals in Pittsburgh and Chicago, these areas are not only building off their unique industrial specialties locally, but also exchanging a wide variety of products with foreign trade partners—and each other—to keep their larger regional economies humming every day. More than ever, trade is rooted at the metropolitan level.   

Yet, little is known about where individual metro areas trade their goods, including our enormous domestic marketplace where more than $17 trillion in goods flow between regions annually. Without an understanding of these trade networks, public and private leaders at all levels cannot target freight strategies and transportation investments to better support the extensive supply chains defining the U.S. economy. 

New data from the latest installment in our Metro Freight series addresses this shortcoming, revealing the highly concentrated nature of the nation’s goods trade across a distinct set of metro areas.

Over 80 percent of the nation’s traded goods, for instance, either start or end in the 100 largest metropolitan areas, amounting to $16.2 trillion each year and including some of the most valuable advanced industrial products. This concentration results in just 10 percent of the country’s trade corridors moving 79 percent of all goods, ranging from New York and Philadelphia ($55.9 billion) to Dallas and Houston ($25.2 billion). You can see more specific trade flows at our data interactive and download the full dataset.

The result of this concentrated trade activity is a hierarchy among regions. For example, rural areas and smaller metro areas—many of which specialize in specific goods like energy products—tend to exchange high volumes of freight with their larger metropolitan neighbors, particularly those that have a sizable logistics workforce, population, and related industries. Meanwhile, these larger metro areas frequently operate as national hubs, forging connections to other corners of the country and the world.

New York, Chicago, Los Angeles and Houston rank among the most central metro areas in this respect, trading with hundreds of markets domestically and internationally. Other large markets with extensive logistics industries, like Atlanta and Memphis, also play an integral role cycling products throughout the county while employing tens of thousands of truck drivers, material movers and other logistics specialists to bolster their regional economies.

As specific metro areas assume central importance in U.S. goods trade, it’s time policymakers channel future freight investments to better reflect this economic reality. With over 77 percent of the nation’s freight moving between different states, we need federal freight policies that protect interstate trade by targeting key markets. At the same time, state and local policies should make freight investments and land use decisions in response to local industry and overall growth trajectories. And across all levels of government, future freight investments will require more coordinated action from public and private actors.

By prioritizing places in our national freight network and reorienting our freight strategies in light of particular trade corridors, policymakers can begin to tackle these long-term transportation challenges head-on.