Texas has been the United States’ largest exporter for 17 consecutive years, and it is far from a tight lead. In 2018, it was 77% more in export value than second-place California as the top exporter of oil and gas. It also received the 2nd highest number of imports of any state (after California). Despite its 10 million fewer inhabitants, Texas barely surpasses the Golden State as the national capital of foreign trade, and therefore logistics. On my recent trip to Texas, I saw how this all comes together.
First for the figures: Texas transports 3.3 billion tonnes of freight per year and possesses 5 of the 30 largest ports in commercial value. The Texas Comptroller finds that exports represent nearly 18% of the state’s GDP. Nationally, 9.4% of U.S. manufacturing activity come in Texas. In an age when leftist politicians warn of secular stagnation and peddle welfare plans in response, Texas is a rebuttal; a place that has succeeded in fostering a working-class economy.
A few reasons: Texas runs along the border with Mexico, the United States’ second largest trading partner. It has gas and oil, and unlike other states, it is in fact willing to extract it. It has a flat and open grassland, which facilitates the construction of infrastructure. After the expansion of the Panama Canal, Texas is better positioned for Asian trade, especially given the bottlenecks in the west coast ports. More importantly, thanks to its economic freedom, Texas is where people want to travel, adding 4 million since 2010, more than any other state by far. This creates both a demand for inbound goods and labor pools that help companies export them.
Much of the activity enters and leaves Port Laredo, the second busiest freight port in the United States by value (excluding airports). From there, cargo travels along I-35, some of the nation’s busiest freight highways, and the Texas Triangle subways.
“Laredo’s roots are in international trade,” said Gene Lindgren, president of Laredo Economic Development Corporation, referring to the long-standing relationship with Mexico. He tells me that recently refrigerated products from all over North America have been shipped across town, complementing older freight trends.
The Port of Houston, the 4th busiest in the country, also plays an important role in statewide logistics, as do Dallas, Fort Worth, Corpus Christi and the rest of the border towns.
The largest US ports, many of which are located in Texas.
Warehouses are an example of the built landscape produced by all this logistics. Dallas Fed data shows that from 2010 to 2018, the Dallas-Fort Worth subway ranked first nationally in industrial space expansion, while Houston was second. About 5 times more industrial space was added than office space in the metro.
A sturdy freight rail is another result of the Texas logistics industry. A fact sheet from the American Association of Railroads Remarks that more than 10,000 freight routes crisscross the state, which employs more than 17,000 people. (The trucking industry has higher employment numbers, with 1 in 16 Texans doing these jobs.) The main materials shipped by rail are chemicals, minerals, and petroleum-related materials, while the State receives coal. Fort Worth was the headquarters of BNSF, while Houston was a main hub for rail traffic since the 1800s, in particular Union Pacific.
A third important element of Texas logistics is the construction of roads. This is # 1 among the 50 states in total track miles– again, from afar – and a 4 of the first 8 cities for per capita track mileage. There is a lot of innovation in Texas highway policy, from well-designed private toll roads to state researchers who are experiment with a “freight shuttle” system where trucks are moved along conveyor-type medians separated from standard traffic.
The Texas transportation and logistics system is of course more complex than what can be summed up here, but I hope it conveys the basics. It is the first US state for international trade and, for this reason, has supported an extensive network of warehouses, manufacturing plants, roads, railways, ports, and other infrastructure. As long as Texas remains an open economy and continues to grow, and as long as the United States is committed to free trade, the state will be the zero point for advanced logistics.
This article presented additional reports from Market town planning report content staff member Ethan Finlan.