Amazon-ification and Vehicle Miles Driven

I visited my daughter Sara the other day and was amused to note that delivery services had dropped off two cardboard boxes in front of her house. When I stepped inside, there was a third box, still unopened. Three packages delivered in one day. Wow, thought I. My wife and I might average one delivery per week. Upon my further inquiries, Sara revealed that she also had begun ordering her groceries online and having them delivered to her doorstep as well.

Sara is the mother of a three-month-old infant, so running errands is a serious chore. I understand why she might be willing to pay a modest delivery fee in exchange for greater convenience, especially when she’s juggling baby care with handling the administrative work for her husband’s law practice.

There’s a lesson here for public policy. The rise of e-commerce and home delivery is changing America’s driving habits, especially among younger people less entrenched than carmudgeons like me in their customary way of doing things. Instead of driving to the grocery store and perhaps combining it with one or two other errands, such as depositing a check or picking up a prescription, more and more people are opting for online delivery.

Online-delivery option takes people like Sara off local streets and roads. In the argot of transportation planners, it reduces the number of trips per household. For decades, the propensity for Americans to take an increasing number of trips per day fed the increasing number of cars on the road. According to Federal Highway Administration data, the average number of trips per household increased from 2.3 in 1969 to 3.3 in 2009, and the number of daily vehicle-miles driven per household increased from 34 to 58.1.

Conversely, more e-commerce means there are more delivery trucks roaming around our metropolitan regions and dropping off more packages than ever.

Here’s a big question for public policy wonks: Are we as a nation experiencing a net gain in vehicle miles driven or a net loss as a result of e-commerce? My hunch is that the trend is bringing about a net reduction in driving. While the typical American stops at one or two retail/service locations on average for each trip, I’m surmising that delivery trucks are stringing together long chains of drop-offs, using computer algorithms to plot the shortest, most efficient routes. (This may be true even for grocery store deliveries by refrigerated trucks.)

In sum, I would expect the net result to be positive for society — fewer vehicle miles driven, fewer vehicle emissions, and less congested streets. (But more cardboard boxes in the landfill.)

While positive overall, one might argue, this trend does not help our biggest headache: rush hour congestion caused by people driving back and forth from work. But even here, I expect there will be a modest benefit from home deliveries. Working people typically tack errands onto their commutes home — picking the dry cleaning, stopping at the grocery store, whatever. Insofar as home deliveries displace those rush-hour errands and shift the trips to non-rush hour times of the day, they might alleviate rush hour traffic to a modest degree.

The truisms that have underpinned our transportation planning are shifting under our feet. Smart planners will take into account the impact of e-commerce and home deliveries before investing billions of dollars on new roads, highways and mass transit projects on the assumption that the trends of the past 30 years can be confidently projected into the next 30 years.

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6 responses to “Amazon-ification and Vehicle Miles Driven”

  1. Jim, thanks for exploring this. I suspect it’s more complicated — the first order effect may be a net reduction in vehicle miles, but second order, once the delivery volumes increase and come direct from giant distribution warehouses consolidating the goods of many different kinds (as in Amazon and EBay) more than from storefronts, the vehicle miles may increase again to the point where the tradeoff in lower cost from consolidated warehousing and processing is balanced by the higher cost of longer distance deliveries and delivery facilities. I grew up in a former streetcar suburb with groceries and a pharmacy and pubs within walking distance; look at how the big-box stores displaced those neighborhood stores when suburban driving patterns broadened; nowadays you’re lucky to have a 7-11 or a gas station at the local intersection. I expect the day is coming when internet shopping is simply going to ratchet that process one big notch higher, with more delivery vehicles and less personal autos. The road use to and from those distribution hubs is going to grow. Not surprisingly, they already are building these near key interstate highway interchanges.

  2. LarrytheG Avatar

    used to be… a bricks and mortar store would order 20 items and they’d come on a tractor trailer along with other multiple-item lots and folks would do a “trip” to buy several items…

    most folks do not make a separate trip for each item they buy. They may, for instance, on a trip to get groceries or refill a prescription – tack on other items … so I’m not sure how many trips will be “saved” and I suspect people are still going to make trips to buy stuff.. just perhaps one less item on a trip when one item is bought off the internet rather than as part of a trip to get several items.

    However, we DO KNOW with more clarity, other impacts of people buying stuff online and that is the loss of local sales tax revenue AND advertising revenue for papers.

    Not as well recognized is sales taxes are a key component of transportation funding in Virginia!

    Virginia’s gas tax when converted from a per gallon tax to a percent of purchase tax – went up again from 3.5% to 5.1% to account for the failure of Congress to require all internet companies to charge sales tax for every state they shipped to.

    Now one may ask what the heck does the sales tax have to do with Transportation funding in Virginia.. and the answer is – a LOT because about a third of funding now comes from the general sales tax and it is often as much or more than what comes from the tax on gasoline AND NoVa and Hampton also have a .7% sales tax for transportation. That’s IN ADDITION to the 5.1% tax on gasoline itself!

    So… the impacts from internet shopping are BIG for transportation funding!!

    Dec 2017 numbers:

    Motor Fuel Taxes $898,700 <—- gas tax 5.2% of purchase
    Motor Vehicle Sales and Use Tax $963,300 <– sales tax on new cars
    State Sales and Use Tax $1,047,000 <—- general sales tax .675%
    Fed gas tax – $1,191,025 18.4 cents per gallon

    you can get this info by googling " commonwealth transportation fund revenue report december 2017" and " A New Model for Funding Transportation Virginia’s Sales Tax Approach"

  3. LarrytheG Avatar

    And an interesting article in WSJ this morning:

    ” Congestion in the U.S.’s largest cities is only getting worse, and as municipal leaders search for solutions, the idea of charging vehicles to enter high-trafficked zones is gaining momentum.”

    so doesn’t look like the Amazonian services are helping.

    “Meanwhile, the rapid growth of app-based ride-hailing services has led to more vehicles circling the busiest areas. Between 2013 and 2017, even as yellow taxi trips plummeted, the number of for-hire vehicles in Manhattan’s central business district more than doubled during the afternoon rush hour, according to a report from Bruce Schaller, a congestion expert. Over the same period, traffic problems have become significantly worse: Average taxi speeds in Manhattan’s core fell to 4.7 miles an hour in 2016, from 6.7 miles an hour in 2012, according to the city’s Department of Transportation.”

    At this point – the signs point to MORE traffic and MORE congestion not less.

    This may change once “free roads” become “priced” (tolled).

  4. Don’t commercial vehicles pay more gas tax? Or is that just the higher tax on diesel fuel? Anyway, if there’s a shift to more deliveries to homes using vehicles that consume gas, the revenue may increase. But I can see many of those vehicle miles occurring in commercial vehicles powered by natural gas or electric batteries. So the GA needs to get ahead of that by taxing all vehicle-miles of road use equivalently. That’s not currently the case.

    1. LarrytheG Avatar

      Just the higher tax on diesel fuel.. it all comes from the same pumps and the state tax is levied at the bulk level not at the pump (however the Fed tax is still at the pump).

      The thing about trucks is this: There is probably almost nothing in your house or your car that did not get transported on a truck that used public roads …. look around and try to find something that did not come on a truck…. good luck!

      Yeah – you brought it home in your car – but where you bought it – more likely than not – it got there on a truck. Every single thing in WalMart or Lowes or Harbor Freight or Macy’s – got there on a truck ..

      So the point here is that any additional tax we put on trucks to “pay”… we’re putting on us….

      I’m not arguing against it – just pointing out – that ultimately we pay that fee – whether it be a tax or a toll or a per-mile assessment – no matter which variant – it tolls back to us as an embedded expense incorporated into the price we pay when we buy the item.

      so.. now some things come to us entirely on a truck from factory to our door – maybe on several trucks with the last one being a smaller panel truck… instead of our own car.

      I’m not at all sure how that changes “trips” and congestion but I’m betting that it won’t be any kind of transformative change to road congestion.. and might end up being worse is the trip to the house for one item is an additional trip because that one item in a car trip would be one of a number of items .. part of a multi-store errand trip.

      In terms of highway funding – VDOT has already made the transition on funding sources – fully one third of their revenues come from the sales tax – and major urban commuting projects are now going to be tolled…

      And “developer”and locality “ED” roads are no more because of Smart Scale – something that curiously – not many folks,including locality elected – “get”.

      The days of politically-supported roads are numbered.

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