Mass transportation vehicles industry

Industry Snapshot

GENERAL INDUSTRY: Manufacturing

CAREER CLUSTERS: Manufacturing; Science, Technology, Engineering, and Math; Transportation, Distribution, and Logistics

SUBCATEGORY INDUSTRIES: Bus Body Manufacturing; Motor Vehicle Parts Manufacturing; Railroad Rolling Stock Manufacturing; Ship and Boat Building and Repairing

RELATED INDUSTRIES:Freight Transport Industry; Passenger Transportation and Transit Industry; Shipbuilding, Submarines, and Naval Transport Industry; Travel and Tourism Industry

ANNUAL DOMESTIC REVENUES: Train, subway, and transit car manufacturing: US$10.6 billion (IBISWorld, 2023), Shipbuilding: $40.3 billion (IBISWorld, 2023); Truck and bus manufacturing: $27.6 billion (IBISWorld, 2023)

ANNUAL GLOBAL REVENUES: Transportation manufacturing: US$7.6 trillion (2022)

NAICS NUMBERS: 3363, 336211, 3365-3366

Summary

The mass transportation vehicle industry manufactures intercity (IC), commuter rail, subway, and light rail cars, as well as trolleys, buses, ferries, and water taxis. It is an international industry that employs people in design, quality assurance, engineering, planning, testing, and managing positions. Mass transportation manufacturing serves the needs of commuters, point-to-point travelers, and tourists. In addition to manufacturing, maintaining, and refurbishing both land vehicles and water vessels, the industry partners with other industries that build and maintain tunnels; bridges; elevated train lines; railways; terminals; ferry docks; waterways and related infrastructure, such as dredging and buoys; and bus, train, and boat stations.

History of the Industry

As urban areas grew in the United States, mass transit began to develop. In the early 1820s in New York, Philadelphia, Boston, and Baltimore, stagecoaches were modified to become horse-drawn omnibuses. Primitive and uncomfortable, they were only marginally faster than walking. By 1832, horsecars with wooden wheels that ran on street-mounted rails were in use in several cities. These modes of transportation were run by private companies.

The first railroad cars were of wooden construction, built by small independent companies. By the end of the nineteenth century, advances in iron and steel technology made the use of wood for passenger cars obsolete. Iron and steel cars were safer, being fireproof while wood was not. There were more than one hundred rail-car manufacturers in the late nineteenth and early twentieth centuries.

Rapid transit cars were initially designed with vestibules and doors only at either end, making boarding and detraining large groups of passengers slow processes. The development of side doors greatly improved logistics. Steam locomotives were disguised in car bodies, called “dummy cars,” to avoid scaring horses. The locomotives became larger, heavier, and faster. Passenger cars were heated with coal stoves. Oil, and later gas lamps, provided lighting.

With the advent of electricity, horsecars eventually gave way to trolleys, or streetcars. Richmond, Virginia, had the first electric trolley line in 1889. By 1902, 94 percent of city public rail and trolley transportation was electric. As streets became unbearably congested, New Yorkers began moving to New Jersey and Brooklyn, where ferries across the Hudson and East Rivers provided faster transportation. Intercity steam trains were used by wealthier patrons to connect “bedroom communities” to the nearby metropolises. While horse-drawn vehicles were smelly and noisy, so were the steam trains, whose noisy engines spewed ash along their routes.

The search for functional underground subways or elevated trains as alternatives to street transportation began in the 1850’s. Throughout the late 1800s, many schemes were designed and proposed for both subterranean and elevated rail transport, including Alfred Ely Beach’s underground pneumatic tube system (1849) and James H. Swett’s elevated railway (1853). Various inventors tried monorail systems, cable and other steam-powered systems, and even suspended rail cars. By 1873, cable-car propulsion, a cleaner mode of transportation, was invented by Andrew S. Hallidie. Cable cars use underground cables, driven by central, stationary steam engines. In 1876, New York City completed the first elevated “rapid transit” train line, carrying people between fixed-point stations. Cable was replaced with electric traction by 1890, with the notable exception of San Francisco, where cable cars still operate today. Montgomery, Alabama, had the first city-wide electrified transportation system by 1886. Electrified third rails or overhead power lines, called catenaries, were used to provide power to the cars. Mass-transit subway trains are generally self-propelled.

Locomotives pull or push rail cars while also supplying auxiliary power for lighting; heating, ventilation, and air-conditioning (HVAC); doors; and other systems. Steam was used to power locomotives until the 1940s, when more efficient diesel engines, sometimes combined with electrical power, were adopted. Rail was the most common mass transportation system until the 1940s. Despite a spike during World War II, passenger rail service was practically defunct by the 1960s, having lost ridership to automobiles and airlines, encouraged by the federal highway system and suburbanization. In the mid-1990s, manufacturers developed lighter, more efficient, less expensive railcars. Self-propelled diesel railcars were adopted in North America in the mid-1990s.

Contemporary ferries and water taxis use marine diesel engines and are built in shipyards. They are designed by naval architects and marine engineers. Although a small ferry was in operation in Connecticut as early as 1655, the first steam ferry between New York and New Jersey began operating in 1811. There were even horse-driven ferries on Lake Champlain in the nineteenth century. Diesel engines later replaced steam engines. Regulated by the US Coast Guard, some ferries operate as part of urban mass-transit systems, such as the Staten Island Ferry (carrying only passengers since 2001) in New York City. Washington State has an extensive ferry system that carries cars as well as passengers. Water taxis are smaller water vessels, usually employed in urban areas. Most follow a set route and make multiple stops, operating similarly to buses. Such urban water taxis can carry up to 150 passengers. (Some small vessels are literally water taxis: They take individual fares door to door. Venice, Italy, for example, employs such private, door-to-door water taxis.)

Bus mass transit began in the late nineteenth century, when the Gillig Corporation began modifying horse-drawn buggies and carriages. Entrepreneurs adapted personal vehicles to carry several passengers at a time. Carl Eric Wickman began transporting workers to mines in a seven-seat Hupmobile in Hibbing, Minnesota, in 1914. His company became Greyhound Corporation in 1930. Automobile manufacturers began building vehicles capable of carrying large numbers of passengers. Truck manufacturers started building chassis specifically for buses in the 1920s. Better roads, paved with concrete, enabled manufacturers to build heavier and longer buses that could accommodate more passengers.

In 1921, the Hall-Scott Motor Car Company was the first to build a vehicle specifically designed to be a bus. Before that, wagon, automobile, and coach builders had just adapted their vehicles. That same year, Safety Coach of Muskegon, Michigan, manufactured the first Greyhound intercity bus, so named for its grey paint and sleek design. It had seven rows of four seats each. As the highway system grew, regional lines flourished. By the late 1920’s, buses were manufactured with metal bodies. Many automobile companies, such as Studebaker, Packard, and Pierce-Arrow, began to manufacture buses.

Horse and electric power gave way to gasoline engines with advances in internal combustion engines. While rail flourished in the Northeast, buses were more prevalent in the Midwest and the South. The first buses were not enclosed, so both passengers and luggage were exposed to the elements. By 1925, design of buses had developed a center aisle with seats on both sides and a single-entry side door.

Other bus manufacturers included the Thomas Built Buses, founded by Perley A. Thomas in North Carolina in 1916. Thomas took over a failed streetcar company and became the main manufacturer of streetcars in the United States. With the advent of automobiles, however, streetcars were becoming obsolete. In 1936, he retooled the business to manufacture school buses.

Western Flyer began as Western Auto and Truck Body Works in 1930, and in 1941 it produced the first front-engine intercity bus. Most buses used gasoline-powered engines until Gillig introduced the first rear-engine diesel-powered bus in 1959, and the first bus powered by liquified natural gas (LNG) entered production in 1992. In the early 1970s, automatic transmissions began to replace manual transmissions. In the 1980s, Ontario Bus produced the first buses powered by compressed natural gas (CNG). Buses grew in length, from thirty-foot buses to sixty-foot, articulated buses in the mid-1980’s. Low-floor models were introduced as well. Passenger capacity increased, and by the 1950s buses were able to accommodate over forty passengers each. In 2003, the first diesel-electric hybrid buses entered production. All-electric buses using lithium batteries emerged in 2014.

The Industry Today

Today, mass-transit systems include subways, light-rail intercity and high-speed trains, water taxis, fast ferries, buses, and—in a few cases—streetcars. Using clean fuels that create less pollution and relying less on fossil fuels in general are two of the most important challenges mass-transit vehicle designers and manufacturers face in the twenty-first century. However, these goals must be met if congestion and air and noise pollution are to be reduced.

The US commuter and intercity rail manufacturing industry is overseen and regulated by the Federal Railroad Administration (FRA), part of the US Department of Transportation (DOT), while transit authorities create their own specifications based on the Code of Federal Regulations (CFR). Water taxis and ferries are overseen by the Coast Guard, now part of the US Department of Homeland Security (DHS). In 1996, the Surface Transportation Board (STB) succeeded the Interstate Commerce Commission (ICC) as the overseeing authority for regulating and resolving railroad fees and service. In 2000, the Federal Motor Carrier Safety Administration (FMCSA) was established to oversee safety in the bus industry. These federal agencies monitor everything from construction standards to safety regulations to requirements for training and licensing operators.

Ferries have evolved from using steam to using marine-diesel or gas-turbine power, with waterjet propulsion. They have increased in speed, are often built of aluminum, and often use a catamaran hull design. Fast ferries may be hydrofoils or hovercraft and use propellers, turbo fans, or waterjets for propulsion. They may carry cars as well as passengers and make trips that last only a few minutes or overnight. Some overnight ferries provide amenities such as guest rooms, casinos, and other entertainment on board. They may carry from two or three to over two hundred vehicles and up to twenty-five hundred passengers.

Shipyards build hull infrastructures and may then partner with boat builders to build superstructures such as pilot houses and passenger cabins, or they may partner with other shipyards to construct vessels’ sides, called “curtain plates.” For example, the large Todd Shipyards contracted with Nichols Brothers Boat Builders and Everett Shipyard, both much smaller companies, to complete a project for the Washington State Ferry in 2005. In 2008, Todd purchased Everett.

Ferry designers and builders are developing cleaner-burning engines to lower air and water emissions in an attempt to reduce harm to marine animals. High fuel prices can have a negative impact on the industry, as today’s fast ferries were developed in the 1980s, when fuel prices were relatively low. These vessels are fuel inefficient by modern standards: They require expensive fuel and lack modern fuel-saving technologies. There are several types of fast boat hulls that need further research and development to ensure passenger comfort. Monohulls, catamarans, hovercraft, and hydrofoils lack stability in high seas. Perfecting these types of ships will be a goal for fast-ferry designers and builders.

Buses today often use clean-air technology. Many are hybrids that can use electric batteries and either diesel fuel or natural gas. Articulated buses are longer than traditional buses but bend in the middle to negotiate city streets. Low-floor models were introduced in the 1980s. Partner industries include manufacturers of tires, engines, seating, windows, and signage. Chassis manufacturers may partner with engine manufacturers such as Cummins, Ford, or Caterpillar.

Future buses may have doors on both sides for quicker boarding and unloading and may use compressed natural gas (CNG) and other clean fuels. Fuel-cell-powered buses are superior to lead-acid batteries, resulting in cleaner energy use. Ethanol-diesel, hydrogen, other alcohols and biofuels, and synthetic fuels are all possible fuels for buses, which have proven to be useful prototype vehicles for such new technologies, since there are fewer of them in each production run, so fewer need be purchased to justify manufacturers’ production costs. New lightweight construction and propulsion systems will change bus design and manufacture to work with the Global Positioning System (GPS) and bus rapid transit (BRT). With new propulsion systems and magnetic guidance, steering mechanisms will change. Speed can be automatically controlled. Many such systems are already in use.

Acela Express, built by a consortium of Alstom and Bombardier, is a high-speed intercity train service that was introduced into service by Amtrak in 2000, running between Boston and Washington, DC, at up to 150 miles per hour. These trains use advanced tilting technology to allow high speed on curves. Using new propulsion equipment, energy normally lost in friction braking is recovered and transformed back into electricity to be used by other trains, a process known as "regenerative braking." Diesel-electric locomotives are now more powerful and more efficient than they once were, and they, along with electric traction motor technology, have made the industry greener. Computer technology has been used to reduce noise pollution as well. All-electric zero-emissions locomotives have replaced diesel-electric trains in some places. Computerization of signal and communication systems began in the early twenty-first century. Diesel-electric light-rail vehicles running without overhead wires have also been developed. Subindustries include manufacturers and distributors of wheels, communication equipment, seating, windows, toilets, paints and coatings, and flooring.

Modern streetcars differ from light-rail cars in that their tracks are embedded in streets that are also traveled on by automobiles, rather than being installed on dedicated rights of way. They are similar to buses, but streetcars can accommodate up to 170 passengers, more than even articulated buses, which have an eighty-passenger capacity.

Magnetic levitation (maglev) is a technology that is coming into use. In 2001, the FRA investigated using maglev for a Baltimore to Washington, DC, train. In 2005, the FRA authorized publication of a study regarding implementation of a maglev project in Pennsylvania. Projects have also been proposed in Georgia and California, but the technology has thus far been too expensive to implement in the United States. Maglev is capable of reaching speeds above 300 miles per hour, and maglev trains are in operation in Shanghai and Germany. The two types of maglev systems are electromagnetic suspension (EMS) and electrodynamic suspension (EDS). EMS systems use the attractive force between magnets to levitate the train, while EDS systems use the repelling force of magnets. Adopting the technology in the United States would require making enormous changes, not only to the transportation infrastructure but also to railcar manufacturing facilities.

Today’s mass-transit manufacturing industry is computer driven from conception to design to maintenance. The tools for technicians are as likely to be laptop computers as they are to be wrenches or screwdrivers.

Industry Outlook

The future of the mass transportation vehicle industry is best examined through a look at three areas: water vessels, rail vehicles, and buses.

Ferry and water taxi construction represent a small part of the large shipbuilding industry. While the US industry grew by about 10 percent between 2006 and 2009, it then gradually decreased as public expenditures fell in the wake of the recession of 2007–9. By 2012, the industry had recovered somewhat, but it saw a slow decline of 1.5 percent through 2018, mostly as the result of deceased military demand as the wars in Iraq and Afghanistan wound down. However, a rise in global tensions spurred demand into the early 2020s.

Until tracks and overhead catenaries are updated, the United States will continue to lag behind the rest of the world in true high-speed train service capable of competing with regional air service in both cost and speed. However, several impetuses exist for such development. After the September 11, 2001, terrorist attacks, train travel became more desirable, involving fewer security headaches for passengers than air travel (although train tracks are easier to sabotage than are planes). Trains also have the advantage of being able to provide downtown-to-downtown service. As a result, railcar manufacturing grew steadily for a number of years beginning around 2005. The American Recovery and Reinvestment Act of 2009 aimed to increase this growth as it allocated $8.4 billion in new funds for public transportation and $9.3 billion for intercity and high-speed rail. In 2009, United Streetcar received $50 million worth of new orders, and it anticipated growth as eighty cities were considering streetcar implementation in the future. Modest growth continued through 2017, but a drop in demand led to a decline in revenues by 2019. In 2021, the US government mandated that 60 percent of all railroad equipment and components sold in the United States and all railcar and locomotive assembly must be sold and pro-duced domestically. President Joseph Biden's Infrastructure Investment and Jobs Act (IIJA), which was passed in 2021, provides $66 billion to improve US rail systems. Some companies that manufacture passenger rail cars noted in 2023 that demand was up and several passenger rail services had expanded. One important development of supporting this manufacturing was reinforcing the supply chain for component parts such as windows and tires. At least 2,763 transit component manufacturers were located in the United States as of 2022, according to Transportation for America.

Bus transportation is the largest mode of public transportation. Buses continue to adopt cleaner energy technologies, such as parallel hybrid propulsion, electric propulsion, and fuel-cell power in response to stricter government regulations. Future developments may include intelligent vehicles, accident-avoidance technology, and wireless communication. Concerns in urban areas over massive traffic, gridlock, and air pollution, as well as greenhouse-gas emissions, are likely to improve the outlook for the bus industry. Demand for buses is projected to grow, as fuel prices for automobiles remain volatile and urban congestion increases.

China has led the way in adopting electric buses. Some have poles on their roofs that contact the overhead wires that provide the electricity to power the vehicles, which are called trolleybuses. Newer buses powered by lithium batteries have been on the roads in Shanghai since 2014. These are the most prevalent and a major component of China's pledge to become carbon neutral by 2060. More than 95 percent of the world's electric buses are in use in China, which is home to some of the world's biggest manufacturers of e-buses.

Employment Advantages

Water Vessels. In 2022, there were only 8,000 marine engineer and naval architect jobs in the United States. Nevertheless, employment prospects in this field are fair because a limited number of students are pursuing these occupations. The median income of these positions, moreover, is high at $96,910 per year. Overall, the number of marine engineer and naval architect jobs was estimated to grow by 1 percent from 2022 to 2032.

Rail Vehicles. According to the BLS, employment opportunities in rail manufacturing are expected to grow, but slower than the average for all industries. Those job seekers with associate’s degrees, technical certification, and experience will be most successful. However, automation and robotics are expected to eliminate some production jobs. Although welding machine operator jobs are expected to decline, employment prospects remain positive for welders and those with the latest training and certification. Declines will be most severe among unskilled positions.

Buses. Employment opportunities in truck and bus manufacturing increased 0.9 percent from 2019 to 2024, according to the market research firm IBISWorld, as demand for more efficient and smart buses increases. However, increasing automation in factories may threaten jobs in this industry, particularly among unskilled workers and supervisory positions. As in the rail industry, production may be cyclical.

Annual Earnings

Water Vessels. Shipbuilding revenue in the United States in 2023 was about $40.3 billion.

Rail Vehicles. Train, subway, and transit car manufacturing revenue in the United States in 2023 was $10.6 billion. Both the rail rolling stock industry and the bus industry rely in some part on public policy and public funding. If a company receives direct funds from government agencies, it will be affected by the financial state of those agencies. For example, when states face fiscal crises, mass-transit budgets are cut, delaying or halting orders for new cars. The 2021 infrastructure finding legislation has boosted production of passenger rail cars and expansion of service.

Trucks and buses. Truck and bus manufacturing revenue in the United States was $27.6 billion in 2023.

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