INTERNATIONAL SYMPOSIUM ON ROAD PRICING Darrin Roth American

INTERNATIONAL SYMPOSIUM ON ROAD PRICING «Darrin Roth «American Trucking Associations, Inc.

WHAT IS ATA? «National representative of the trucking industry «Diverse membership – size, sector, geography «Federation of associations with 37, 000 members

MANDATORY VS. VOLUNTARY «Oppose tolls on existing Interstates «Support the concept of voluntary tolls…however, many companies distrust states, toll authorities l Believe voluntary tolls may eventually become mandatory l Only way to attract significant number of trucks is to allow productivity improvements l History of unaccountable toll authorities

DOUBLE TAXATION «Oppose double taxation l Already pay state, federal highway user fees for use of facility l True user fee would charge true cost, with revenues spent exclusively on facility improvements l Double taxation eliminates philosophical argument that a toll is the most equitable form of taxation l Not politically realistic that states would refund money

REVENUE EXPENDITURE «Revenues spent only on l Debt service l Operations l Reasonable return on investment «Revenues should not be spent on projects unrelated to the facility «Tolls should be eliminated once bonds are retired and integrated into state highway program – not realistic

VALUE/CONGESTION PRICING «Passenger and commercial vehicles react differently to pricing «Much research on passenger effects; small body of research on commercial, mostly related to benefits of less congestion

VALUE/CONGESTION PRICING «SHIPPERS SCHEDULE DELIVERIES!!!! «Most trucking companies either don’t pass toll costs on or spread them around to all customers l No incentive for shippers to change delivery times «Most truckers schedule around rush hour, avoid congested roads without pricing

VALUE/CONGESTION PRICING «Shippers unlikely to change pickup/delivery hours even with a surcharge l Employee overtime pay cost-prohibitive l Interruption to supply-chain management could result in higher cost than surcharge

VALUE/CONGESTION PRICING «Vilain/Wolfrom Study l “Value Pricing and Freight Traffic: Issues and Industry Constraints in Shifting from Peak to Off-Peak Movements, ” 2000 l Interviewed 50 trucking companies in NYC area to gauge reactions to value pricing l Found toll costs are a relatively insignificant factor in determining travel choices l Predicted “modest” changes in behavior

TRAFFIC DIVERSION «Diversion of traffic not well known or understood «Research generally done on front end or when major rate increase proposed to determine revenue impacts «Social, economic impacts must be examined when a new toll road or higher rates are proposed

TRAFFIC DIVERSION - I-81 « 2 proposals for tolling Interstate 81 Virginia «STAR Solutions l 4 tolled truck-only lanes, existing lanes toll- free, reserved for cars l Kornhauser study determined 50% diversion with 20 cents/mile toll rate

TRAFFIC DIVERSION - I-81 «Fluor Virginia l 2 new lanes, all vehicles tolled l Fluor’s own study showed at 17 cents per mile for trucks, 5 cents per mile for cars: l 85% of local passenger and commercial traffic diverts l 35% of long-distance commercial traffic diverts l 45% of long-distance passenger traffic diverts «Survey of 34 VA-based trucking companies found that 91% of respondents would use alternate routes to avoid a toll

Diversion – Ohio Turnpike «Recent study found significant diversion from Ohio Turnpike following 82% toll rate hike «Vehicles using congested alternate routes instead of free-flowing turnpike « 70% of trucks on one arterial using road solely to avoid toll «Other local roads 30 -50% truck traffic

Social Impacts of Traffic Diversion «Safety l Generates additional VMT l Accident rates on alternate routes at least 4 times higher than Interstates «More fuel burned as VMT, congestion increases «Quality of life decreases as truck traffic diverts to roads in populated areas «Additional costs to lower-order roads «Economic costs

GERMAN ROAD PRICING «Many technical challenges «Privacy concerns more pronounced in U. S. «U. S. requires more extensive infrastructure because of better-developed road system «Extremely expensive l On-board units cost 500 Euros each l Assuming $500 cost, retrofitting = approx. $1. 5 billion, annual cost to install in new vehicles = $200 million

TOLLS WE CAN SUPPORT «Reason Foundation truck lanes «Trans-Texas Corridor «Southern California truck lane proposal «FAST Lanes «HOT Lanes on existing HOV lanes «MUST BE VOLUNTARY, MUST HAVE NONTOLL ALTERNATIVE

CONCLUSIONS «Trucking companies will always favor fuel tax increase over tolls l Easier to pass on l Lower administrative costs «Technology allows for cost-efficient evasion of tolls «Mandatory tolls reduce industry productivity more than fuel tax increases unless equipment productivity increases