Did you know that more than 340 tolled facilities currently operate under the authority of 125 different tolling agencies in the United States? These tolling facilities straddle everything from toll roads to tollways, turnpikes, parkways, bridges, tunnels and even waterways.
Tolls originally grew out of a need to generate revenue to build and maintain the nation’s interstate highway system. In the early 1900s, long before there was a talk of a Fuel Tax or vehicle registration, states and municipalities fell back on toll roads to generate much needed revenue.
Even small-time operators like miners and ranchers built and tolled their own private roads. Back then, people would use private roads to reach various services, from general stores to saloons and hotels. Where miners and ranchers owned roads and thruways on this land, they charged travelers a small fee. Many of our modern tolls grew out of such an arrangement. While today’s toll roads have evolved, they still serve much the same purpose. Yet, they do create more costs for trucking companies. Let’s look at how enterprising fleet managers can minimize those costs.
Who Runs Toll Facilities?
Today’s toll roads still earn revenue; however, the tolling business model has changed. From toll rate structures to motor carrier strategies regarding tolls, tolling as a business model is ever changing. That’s why we wanted to take some time in today’s blog to have a look at all the factors that impact toll rates, what rules fleets need to follow, methods of payment for tolls, and how to analyze costs and benefits.
Today, tolled roads, bridges, tunnels, and other toll facilities operate like businesses. Just like any new company, they require initial investment to get them up and running, then once they open, they earn toll revenue, which both covers expenses, pays employees, and returns a profit.
There are essentially two types of modern toll management models. The first is what is the Build/Operate/Transfer (BOT) Model and the second is the Turnpike Authority model. The BOT system is generally run as a public-private partnership where a state agency partners with a private company to build and manage the toll facility. The private firms then sell bonds to finance construction and management.
Turnpike authorities operate as 100% government-run toll operators. Generally, state legislators pass legislation to establish semi-autonomous turnpike authority organizations. Employees are paid by government agencies and the revenue is plowed back into state coffers.
Which Method is Better?
To an outside viewer, it would appear at first glance that the Turnpike Authority model would put public interests first. Conversely, one would assume that private companies operating toll roads would only make decisions that are in their own best interest. But how exactly do Turnpike Authorities use the money generated from tolls to benefit road users?
Take Pennsylvania as one example. The Pennsylvania Turnpike Commission has reportedly raised toll rates for 11 years, beginning in 2011 and going all the way through the first half of 2021. The money, through a legislative mandate, is then turned over to the Pennsylvania’s Department of Transportation. The Penn DOT then in turn spends that money on urban mass transit programs for big urban centers in the state.
Still, not all toll money is spent on road use and public transportation. In fact, according to a 2020 study completed by the American Transportation Research Institute (ATRI), it is estimated that more than half of all toll system revenues pay for things other than the operation of the toll road itself. That diversion of toll revenue effectively leads to a 50% increase in cost to motor carriers and drivers who use tolled facilities.
Tolling Systems Strive for Independence
As legislation at the state and federal level changes the game for road users and toll operators, toll facility managers are becoming bolder in how they cover costs and bring in revenue. From bonding and payment methods to reconciliation of toll discrepancies and violation tracking – toll managers are getting creative.
The problem is, from a trucking perspective, trucking companies themselves are getting hit with the bulk of toll rate increases and associated costs. Residents and passenger road users may have to pay a toll here and there, but it is trucking companies that foot the highest bill when it comes to tolling. Lawmakers erroneously assume that trucking companies can afford it and will simply just pass those costs on to their customers. Unfortunately, that is not true, simply because many motor carriers bill on static contracted rates that cannot be raised or lowered based on toll increases.
Even more, toll rates for commercial motor vehicles are often set based on the number of axles in the tractor/trailer combination. Some, including the New York Thruway, even add truck height to their rate calculations. Others also include a weight/mass tolling component. As a result, fleets that utilize complex trailer configurations need to ensure they know how their configurations will be tolled.
All Electronic Tolling Goes Mainstream
Since people cost money, tolling agencies have been quickly moving away from manned toll booths. This helps lower administrative costs and safety issues. As a result, the industry is quickly moving towards all electronic tolling enforcement and collection. The two primary methods of electronic tolling are camera systems and RFID transponders. Either method allows vehicles to continue on without having to stop to pay the toll.
In many cases, even if you use a transponder, you may still have your license plate photographed. Tolling authorities do this to ensure they can still collect on the toll if the vehicle is not registered in their transponder network. Still, it is wise to use a transponder, simply because they provide a high level of accuracy.
The problem is that license plates and camera lenses get dirty. License plate reader cameras specifically have difficulty figuring out letters or numbers on a colorful or dirty background. Reflected light can also blur the image a camera records. As a result, some toll agencies must undergo time-intensive manual reviews. If you are incorrectly tolled, you will have to spend time and resources filing a dispute.
It is important for motor carriers to maintain accurate vehicle lists with local tolling authorities. Still, relying solely on license plate readers for electronic tolling could backfire. So, if you plan on using electronic tolling methods, consider investing in a transponder. One of the most popular options is called PrePass, and is used by trucking companies all over the U.S.
Tolling Payment Methods Matter
For trucking companies, tolling payment methods definitely matter. The least expensive way to get your toll bill paid is to use an RFID transponder. You can either use a PrePass transponder or acquire one directly from your local tolling authority. The good thing about transponders is that you do not need to stop. Once you pass through the toll, the RFID transponder communicates with the tolling authority. And since transponders do not require people, those that use them generally get a tolling discount.
If people-less transponders are the cheapest way to pay your toll bill, then stopping at a staffed toll both is one of the most expensive. If you are paying your tolls using cash or card, you are paying the highest price. Some tolling authorities also use video cameras to record license plate information so that they can put your toll bill in the mail.
With so many tolling authorities moving towards all-electronic tolling, conventional wisdom says tolling fees should drop. But with so many municipalities struggling to meet budget requirements during the age of COVID-19, don’t expect tolling fees to drop hugely any time soon.
How Smart Fleet Managers Minimize Toll-Related Costs
It is important to conduct regular reviews of your accounts to make sure you are not paying erroneous, unnecessary, or fraudulent tolls. Tolling is one of those things that can easily get forgotten in the crush of paperwork if you do not keep it front of mind. In the end, if you want to operate a profitable company with happy truckers, tolling is definitely one of the areas you need to pay close attention to.
Want to know how to optimize your regular toll review? Consider the following factors:
- Look carefully for toll violations and address them on a driver-to-driver basis.
- Keep an eye out for vehicle misclassifications.
- Look for maximum tolls and plate reads and ensure they’re correct.
- Train your truck drivers on avoiding peak tolling times.
- Ensure all your RFID transponders are functioning and accounted for.
Toll roads, bridges and tunnels have been a part of U.S. transportation for over 200 years. They are a part of our everyday transportation mix. Today’s modern toll facilities offer convenience, efficiency, and productivity. But, of course, that convenience comes with a price. Fleets must conduct their due diligence and when deciding whether and how to have their truck drivers use a tolled facility, and then follow the rules to get the best results. By doing so you will save money and stay on the right side of the law!