Road Pricing 101 (Goods transport)

Transcription

1 Road Pricing 101 (Goods transport) Robin Lindsey Sauder School of Business, UBC Metropolitan Hotel, Toronto, May 31,

2 Outline 1. Forms of road pricing & existing schemes 2. Goals of road pricing & existing toll structures 3. Truck-only facilities 4. Acceptability of road pricing (to goods transporters) 2

3 Outline 1. Forms of road pricing & existing schemes 2. Goals of road pricing & existing toll structures 3. Truck-only facilities 4. Acceptability of road pricing (to goods transporters) 3

4 Forms of road pricing Type of scheme Facility-based High occupancy toll (HOT) lanes Express toll lanes Individual highways Area-based Cordons Zones Road networks Regional National Examples US: 12 in operation Orange County State Route 91 Highway 407; Many highways in the US, Europe, China. Norwegian cities; Stockholm; Gothenburg (2013) London; Milan Singapore: some expressways, arterials Heavy Goods Vehicles: Switzerland, Austria, Germany, Czech Republic, Slovakia US pilot tests: Oregon, Puget Sound, U. of Iowa, and others Britain ( ) The Netherlands: Dutch Mobility Plan (2010) US: Commissions (2008, 2009) 4

5 Wholly facility-based. Road pricing in Canada Only 19 tolled links. Twelve (11 bridges, 1 tunnel) connect Ontario and US. Highway 407 accounts for over half total traffic volume. The most recent facilities were all built as publicprivate partnerships. 5

6 Orange County State Route 91 (1995) 6

7 Highway 407 (1997) 7

8 Singapore Electronic Road Pricing (1998) 8

9 London Congestion Charge (2003) Low Emission Zone 9

10 Stockholm Congestion Charge (2006) 10

11 Milan Ecopass (2008) 11

12 Outline 1. Forms of road pricing & existing schemes 2. Goals of road pricing & existing toll structures 3. Truck-only facilities 4. Acceptability of road pricing 12

13 Main goals of road pricing 1. Demand management Relieve congestion Reduce road damage, accidents, pollution, noise Promote use of public transit 2. Revenue generation Mobility versus accessibility Mobility: speed Accessibility: travel time to desirable destinations Mobility enhances accessibility, ceteris paribus. But road pricing can induce changes in destination and travel distances. 13

14 Basic model of congestion pricing (Walters, 1961) Benefit, cost per trip [$] Social trip cost (includes congestion delay) Social optimum Private trip cost p O p E No-intervention equilibrium Demand V O V E Number of trips, V

15 Basic model of congestion pricing (Walters, 1961) Benefit, cost per trip [$] Toll revenue Social trip cost (includes congestion delay) Efficiency gain from toll Social optimum Private trip cost p O p E Toll No-intervention equilibrium Demand V O V E Number of trips, V

16 Prescription for demand management Tolls should vary with amount of congestion and other external costs that a vehicle imposes: Road characteristics: capacity, safety design standards Direction of movement: e.g. inbound vs. outbound Time: time of day, day of week, season Vehicle characteristics: Size, maneuverability, axle weight, fuel type & emissions levels Congestion measured by Passenger Car Equivalents (PCEs) Single-unit trucks: 1.9. Combination vehicles: 2.2 (Parry, 2008) Complications in setting tolls Parts of the road network are not tolled Inability to vary tolls sufficiently by time of day, vehicle type, etc. 16

17 Further complications for freight transport National Cooperative Freight Research Program (2011) Multiple decision-makers Shipper, receiver, third-party logistics provider, dispatcher/fleet manager, driver Multiple types of trucking service Local delivery, drayage, less than load (LTL), private fleet, for-hire, self employed, owner operator, specialized Other Trucking industry varies in its familiarity with toll roads, toll reimbursement policies Multiple dimensions of responses: Frequency of use, route, time-ofday, productivity increases and cost transfers Response to tolling by commercial vehicle operators is constrained by demands of shippers/receivers 17

18 Values of travel time Small and Verhoef (2007), Forkenbrock and March (2005), Hensher (2011) Passengers $5-40/hr. Mean $12/hr. Trucks Depends on: Type of vehicle & load Importance of punctual delivery Drivers wage rates Work hour constraints Type of trucking service Higher in congested conditions than free-flow conditions Mean $50/hr. Range up to $200/hr. Value of reliability: comparable 18

19 Toll rates on Highway 407 (effective Feb. 1, 2012) Light Vehicle: 5000kg & under Regular Zone Rate Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm Peak Hours Mon-Fri: 7am-9am, 4pm-6pm Light Zone Rate (to west) Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm Peak Hours Mon-Fri: 7am-9am, 4pm-6pm Midday Rate (entire highway) Weekdays 10am-3pm Off Peak Rate (entire highway) Weekdays 7pm-6am, Weekends & Holidays Transponder or Video Recorded /km /km /km /km /km /km Heavy Single Unit Vehicle: Over 5000kg Double Heavy Multiple Unit Vehicle: Over 5000kg, Trucks or tractors with one or more trailers Triple 19

20 Toll rates in the United States Holguín-Veras et al. (2006) 70% of facilities have Electronic Toll Collection (ETC) systems, but only 6% employ time variation Large discounts for frequent users Bus tolls lower than corresponding PCEs Tolls for large trucks Well above PCEs Increase significantly with population density (unlike for cars) Appear to vary with pavement damage Authors conjecture that toll authorities adopt welfaremaximizing tolls for most vehicle types, but pursue revenue generation for large trucks. 20

21 Toll rates in the United States Type of facility Mean cost per vehicle-mile: Ratio of truck to passenger vehicle Toll roads Interstate 3.64 Non-interstate 3.18 Toll bridges & tunnels Interstate 4.79 Non-interstate 5.24 Author s calculation using 2011 data at: 21

22 Toll rates in Singapore Effective May 7 to August 5, 2012 Vehicle categories Tolled elements Time of day variation Motorcycles Passenger / Light goods vehicles / Taxis Heavy goods vehicles / Small buses Very heavy goods vehicles / Big buses Arterial roads Expressways CBD In 30 min. or 5 min. intervals Toll ratio Time of week variation Goals Rate of toll review Arterial roads & expressways: Weekdays only CBD: Weekdays, Saturdays Maintain speeds within specified range: Expressways: km/hr Arterials: km/h Quarterly 22

23 Primary & secondary goals of schemes Goals Scheme Revenue generation Congestion relief Pollution reduction Transit promotion Conventional toll roads 1 Norwegian toll rings 1 2 (recently) HOT lanes Singapore 1 2 London 1 2 Stockholm Milan Ecopass 2 1 European Heavy Goods Vehicle systems US Vehicle Miles Traveled fee (proposed)

24 Relative importance of goals Congestion relief benefits Increase with amount of infrastructure that is tolled Sensitive to degree of time variation in tolls Environmental benefits Pollution reduction & climate change benefits dominated by congestion relief (Anas and Lindsey, 2011) Caveat: Growing awareness of health costs of driving (Lin and Yu, 2008; Currie and Walker, 2009; Taylor, 2012). Revenue generation Revenue benefits can dominate direct benefits from congestion relief (de Palma, Lindsey & Proost, 2007). 24

25 Outline 1. Forms of road pricing & existing schemes 2. Goals of road pricing & existing toll structures 3. Truck-only facilities 4. Acceptability of road pricing 25

26 Truck facilities: Practice Existing Clarence Henry Truckway in New Orleans (no tolls) New Jersey Portway (no tolls) Pier Pass peak-period fee at Ports of Los Angeles and Long Beach Underway, proposed or cancelled Interstate 70 (I-70) (Ohio, Indiana, Illinois, Missouri) Southern California (four highways) Interstate 81 (I-81) in Virginia Interstate 10 (I-10) from Florida to California NAFTA corridor from Laredo, Texas to Toronto Trans Texas Corridor (canceled) 26

27 Potential advantages Poole and Samuel (2004), AASHTO (2010), Bucklew (2011) Less congestion and greater safety for light vehicles Reduce travel times & improve reliability Reduce accidents, emissions, noise, road damage Economize on road construction & maintenance costs Enable more round trips per vehicle per day Facilitate use of Long Combination Vehicles 27

28 Criteria for candidate locations Fekpe (2007) Annual Average Daily Traffic (AADT) at least 100,000 Truck volumes 25%+ Heavy congestion: Level of Service (LOS) E or F Truck-involved fatal crashes equal to or above national average Existence of freight intermodal terminals and processing centres close to freeways and interstate highways 28

29 Constraints and potential drawbacks Constraints Lane capacity indivisibilities Lack of continuous right-of-way Complete vehicle separation impractical or infeasible Potential drawbacks Limited access may increase total travel distance Lane weaving to access and exit truck lanes Increase in emissions, noise, vibration near truck corridors 29

30 How to create Design questions Convert existing lanes, or build new lanes? Separation Separate lanes, or separate corridors? Access rules Truck-only, auto only, mixed use? Location of truck lanes Right-hand lane(s), or left-hand lane(s)? 30

31 Diverse studies of: Evidence on benefits Passenger Car Equivalents of trucks Effects of lane restrictions Effects of differential speed limits Mixed results PCE of trucks varies with: Mix of cars and trucks Terrain Weather Crash rates for trucks compared to cars Lower: overall, rear-end Higher: fatal, sideswipe Car drivers Dislike presence of trucks Increase headways which reduces capacity 31

32 Reason Foundation study Samuel, Poole and Holguín-Veras (2002) Proposal for network of toll truckways. Assumed trucks pay a toll of up to half their cost savings (lacked data on willingness to pay) Tolls sufficient to cover full costs of the truckways Truckers would receive rebate for federal and state fuel taxes, as well as for other truck user taxes 32

33 Evidence on benefits Abdelgawad et al. (2011) Study of 400 series highways in GTA. Used microscopic traffic simulation methods. Scenarios 1. Convert one lane of traffic in each direction on Highway 401 into an exclusive truck lane. 2. Construct a 4-lane exclusive truck highway Results + Travel time savings for trucks in congested segments - Diversion of traffic from arterial road system dilutes potential time savings on parallel roadways 33

34 Outline 1. Forms of road pricing & existing schemes 2. Main goals of road pricing & existing toll structures 3. Truck-only facilities 4. Acceptability of road pricing 34

35 Traditional objections to road pricing 1. Paying for something that was free Canadian roads traditionally provided publicly without direct user charges. 2. Double taxation Most road-pricing schemes not revenue neutral. Proposed exceptions for national schemes: The Netherlands planned to eliminate fixed vehicle charges. The UK has considered lowering fuel taxes if a national scheme is introduced. 35

36 Traditional objections to road pricing 3. Inequitable With respect to income Higher-income groups more likely to gain because willing to pay more for travel time savings. Counterarguments: Depends on travel volume, mode choice, use of toll revenues. With respect to location Location relative to tolled facilities Boundaries of area-based schemes Toll differentiation on road networks Tolling of residential streets, private roads 36

37 Traditional objections to road pricing Other objections System complexity Invasion of privacy Loss of retail business Other revenue sources cheaper to collect 37

38 Attitudes of freight stakeholders: London Altshuler (2010) Truckers sought an exemption from the London congestion charge. Ken Livingstone, the mayor, accommodated them by reducing the charge for heavy trucks from 15 per day to 5: the same as for cars. 38

39 Attitudes of freight stakeholders: Germany Broaddus and Gertz (2008) The German HGV scheme was introduced with little opposition. Reasons: 1. Car owners welcomed the toll as a way to reduce HGV traffic on autobahns. 2. Firms anticipated improved infrastructure quality and travel time reliability. 3. Truckers saw the toll as a way to make foreign haulers pay for their use of German roads. 39

40 Attitudes of freight stakeholders: US Poole (2011) Regarding tolls for planned trucks lanes on I-70: part of an 800-mile reconstruction project spanning Ohio, Indiana, Illinois & Missouri. Attitudes of the trucking community: 1. Cars should pay tolls as well as trucks 2. Tolls should be all-electronic 3. Use of dedicated truck lanes should be voluntary 4. Tolls should end when project costs have been paid off Poole disagrees with positions 3 and 4. 40

41 Attitudes of freight stakeholders: US National Cooperative Freight Research Program (2011) study of truck tolls The findings were overwhelmingly negative across all strata of the trucking industry: there is not a single segment of the trucking industry which showed any positive attitudes about toll roads or the benefits they might offer, either in congestion relief, time savings or reduced shipping cost. Reasons for opposition 1. The highway system has already been paid for 2. Tolls perceived as double taxation on top of fuel taxes 3. Revenues not earmarked for the toll highway 4. Tolls used as a cash cow to generate revenue 5. Shippers want rate quotes that include all accessorial charges and prefer to delegate route choice decisions to carriers 6. Drivers may not value even large time savings if they cannot use them productively 41

42 Attitudes of freight stakeholders: US National Cooperative Freight Research Program (2011) cont. Less resistance to tolls If drivers familiar with toll roads Where toll roads offer value for money in terms of road quality, time savings, reduced fuel consumption, facilitate compliance with hours of service limits, allow heavier loads, or allow longer combination vehicles Options to increase acceptability 1. Free distribution of transponders, simplify creating accounts, flexibility in payment terms. 2. Long ramp up period (e.g. 10 years) for phasing in full tolls 3. Cross subsidies between automobiles and commercial trucks 42

43 Summary: Differences between trucks and cars Difference Impose higher costs: congestion, accident hazard, emissions, road damage, noise Different operating characteristics: speed, acceleration, maneuverability Higher values of time & reliability Higher vehicle operating costs Less flexibility to re-route or reschedule trips for urban deliveries Implication Should pay higher tolls Argument for truck-only lanes or roads Higher willingness to pay for congestion relief Higher willingness to pay for wellmaintained roads Less benefit from changes in behaviour 43

44 Thank you! Robin Lindsey Operations and Logistics Division Sauder School of Business University of British Columbia 2053 Main Mall Vancouver British Columbia V6T 1Z2 1 (604) Robin.Lindsey@sauder.ubc.ca 44

45 References Abdelgawad, H., B. Abdulhai, G. Amirjamshidi, M. Wahba, C. Woudsma and M. Roorda (2011), Simulation of exclusive truck facilities on urban freeways, Journal of Transportation Engineering 137, Altshuler, A. (2010), Equity, pricing, and surface transportation politics, Urban Affairs Review 46(2) American Association of State Highway and Transportation Officials (2010), Transportation Reboot: Restarting America's Most Essential Operating System, Part 2: Unlocking Freight, July ( reightreportfinal_7710.pdf) Anas, A. and R. Lindsey (2011), Reducing urban road transportation externalities: Road pricing in theory and in practice. Review of Environmental Economics and Policy. 5(1), Broaddus, A. and C. Gertz (2008), Tolling heavy goods vehicles: Overview of European practice and lessons from German experience, Transportation Research Record 2066,

46 References Bucklew, K. J. (2011), Improving Freight Roadway Transportation with Dedicated Truck Lanes: Opportunities and Issues, Transportation Journal 50(4), Chin, K-K. (2010), Congestion pricing experiences in Singapore, International Transport Forum, Round Table, February 4-5, Paris ( Chin.pdf) Currie, J. and R. Walker (2011), Traffic congestion and infant health: Evidence from E-ZPass. American Economic Journal: Applied Economics 3(1), de Palma, A., M. Kilani and R. Lindsey (2008), The merits of separating cars and trucks, Journal of Urban Economics 64(2), de Palma, A., R. Lindsey and S. Proost (eds.). (2007), Investment and the Use of Tax and Toll Revenues in the Transport Sector, Research in Transportation Economics, Vol. 19. Amsterdam, The Netherlands: Elsevier. 46

47 References Fekpe, E. (2007), Implementation of exclusive truck facilities, Proceedings of the 42nd Annual Conference of the Canadian Transportation Research Forum: Crossing Borders: North American Transportation Networks: Gaps and Opportunities, Winnipeg, Manitoba, University of Saskatchewan Printing Services, Forkenbrock, D.J. and J. March (2005), Issues in the financing of truck-only lanes. Public Roads 69 (2). Hensher, D.A. (2011), Valuation of Travel Time Savings. In A. de Palma, R. Lindsey, E. Quinet and R. Vickerman (eds.), A Handbook of Transport Economics, Edward Elgar, Cheltenham, UK and Northampton, Mass. Holguín-Veras, J., M. Cetin and S. Xia (2006) A comparative analysis of U.S. toll policy, Transportation Research Part A 40(10), Killough, K. (2008), Value analysis of truck toll lanes in Southern California, 87 th Annual Meeting of the Transportation Research Board, Washington, D.C. Conference CD Paper No Lin, J. and D. Yu (2008), Traffic-related air quality assessment for open road tolling highway facility, Journal of Environmental Management 88,

48 References National Cooperative Freight Research Program (2011), Truck Tolling: Understanding Industry Tradeoffs When Using or Avoiding Toll Facilities, October, Web-Only Document 3/NCHRP Web-Only Document 185 ( Parry, I.W.H. (2008), How should heavy-duty trucks be taxed?, Journal of Urban Economics 63(2), Poole, R. (2011), Dedicated truck lanes for I-70 Moving Forward, Surface Transportation Innovations newsletters No. 94, August ( Roorda, M., R. Cavalcante, H. Abdelgawad, B. Abdulhai and C. Woudsma (2009), Exclusive truck facilities in the Toronto area: Rationale and model development, Proceedings of the 44 th Annual Conference of the Canadian Transportation Research Forum (Victoria, May 24-27, 2009). Samuel, P., R.W. Poole, Jr. and J. Holguin-Veras (2002), Toll truckways: A new path toward safer and more efficient freight transportation, Reason Public Policy Institute ( 48

49 References Small, K.A. and E.T. Verhoef (2007), The Economics of Urban Transportation. Routledge, London. US Department of Transportation Federal Highway Administration (2011), Toll Facilities in the United States, Bridges - Roads - Tunnels Ferries, Publication No: FHWA-PL , Washington, DC, July ( Vadali, S., K. Womack and M. Pappu (2009), Freight route decision making in the presence of tolling: Evidence from Texas, 88 th Annual Meeting of the Transportation Research Board, Washington, D.C. Conference CD Paper No Walters, A.A. (1961), The theory and measurement of private and social cost of highway congestion, Econometrica 29(4),

50 Further reading Lindsey, R. (2006), Do Economists Reach a Conclusion on Highway Pricing?: The Intellectual History of an Idea, Econ Journal Watch 3(2), Lindsey, R. (2007), Congestion Relief: Assessing the Case for Road Tolls in Canada, C.D. Howe Institute Commentary 248. Lindsey, R. (2008), Prospects for Urban Road Pricing in Canada. In G. Burtless and J. Rothenberg Pack (eds.), Brookings Wharton Papers on Urban Affairs: 2008, Parry, I.W.H. (2009), Pricing urban congestion, Annual Review of Resource Economics 1(1), Santos, G. and E.T. Verhoef (2011), Road congestion pricing. In: A. de Palma, R. Lindsey, E. Quinet and R. Vickerman (eds.), Handbook in Transport Economics, Edward Elgar, Cheltenham, UK and Northampton, Mass, USA, pp