Transportation Industry Hit Hard

Previous blog discussions have focused on the relationship between the economy and two important components of Colorado’s transportation infrastructure, DIA  and RTD . The state’s transportation system also includes bridges, roadways, smaller airports, and mass transit systems – all falling under the oversight of the Colorado Department of Transportation (CDOT) .

In addition to infrastructure, Colorado has a very vibrant transportation industry, i.e. the companies that transport people and goods. Approximately 58,000 people, or 2.8% of the state’s workforce, are employed at 3,800 companies. They receive $2.6 billion in total wages, or 2.5% of the state’s total. Average annual wages are in the neighborhood of $41,000, slightly less than the overall state average. Some of the major types of companies include:

• 2,100 Truck transport companies
• 670 Transportation support companies
• 340 Couriers
• 250 Warehouse companies
• 200 Ground transport companies
• 140 Air transportation companies

About 60% of the transportation workforce is located in Adams and Denver counties, in close proximity to DIA, Front Range Airport, and the state’s major arteries  (I-25, I-70, Colorado I-76, and Colorado US 85).

Over the past two years about 10,000 jobs have been trimmed from the transportation workforce, a disproportionately high percentage of workers. Time will tell whether or not all of these positions will be recovered and the impact these job losses have on Colorado’s competitiveness.

 

 

©Copyright 2011 by CBER.

RTD Makes the Rubber Meet the Road

As an infrequent rider on RTD buses, I recently experienced sticker shock when I boarded a bus from DIA to Boulder and was asked to pay $12 for a one-way ticket. Back in the day, the fares were $4.

My first thought was, “Well, I will show them for raising the fares. Next time I will drive.” So I quickly did the math to confirm my beliefs.

Total round-trip mileage from Boulder to DIA is roughly 90 miles. Assuming $.50 a mile for vehicle operating costs, the expense for me to drive would be about $45, not to mention parking fees and the hassle of dealing with traffic. It was clear that the round trip fee of $24 was the most cost effective way to travel, at least for one person.

After I sat down I noticed signage on the bus that encouraged visitors to go to its website for a free lesson in mass transit economics. When I got home, I visited www.rtd-denver.com/economics and learned that fares account for about 30% of total revenues. Approximately 69% is derived from sales tax revenues and one percent comes from on-vehicle advertising and other sources. The economic lesson concluded with a statement that an $18 million deficit is projected for the 2011 budget.

To address this situation, RTD solicited feedback from its customer base over recent months. They asked about possible and preferred solutions that could be considered as part of a fiscal plan to address the projected shortfall. A short list of considerations include wage and hiring freezes, staff furloughs, service reduction and fare increases.

Many of the basic daily services that we take for granted during good economic times are facing challenges at least as severe as those faced by RTD. We can expect to face those challenges for awhile. Stay tuned to see how RTD makes the rubber meet the road.

 

©Copyright 2011 by CBER.