INTERNATIONAL SYMPOSIUM ON ROAD PRICING

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

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

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

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

5. REVENUE EXPENDITURE • Revenues spent only on • Debt service • Operations • 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

6. 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

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

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

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

10. 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

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

12. TRAFFIC DIVERSION - I-81 • Fluor Virginia • 2 new lanes, all lanes, all vehicles tolled • Fluor’s own study showed at 17 cents per mile for trucks, 5 cents per mile for cars: • 85% of local passenger and commercial traffic diverts • 35% of long-distance commercial traffic diverts • 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

13. 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

14. Social Impacts of Traffic Diversion • Safety • Generates additional VMT • 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

15. 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 • On-board units cost 500 Euros each • Assuming $500 cost, retrofitting = approx. $1.5 billion, annual cost to install in new vehicles = $200 million

16. 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 NON-TOLL ALTERNATIVE

17. CONCLUSIONS • Trucking companies will always favor fuel tax increase over tolls • Easier to pass on • 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