Congressional Brief on Road Tolls and Freight

Freight transport is relatively under considered within transport policy and planning. Most scholarship and public discussion focuses on passenger travel, especially in the context of how to pay for infrastructure. Road tolls and congestion pricing will affect passenger travel and goods movement differently, and not necessarily in complementary ways. For instance, one potential solution for drivers who want to avoid high travel costs is to substitute their personal travel for freight travel and simply have the goods and/or services delivered. This is common and a growing share of overall travel.

Road tolls also can influence regional competitiveness of ports and intermodal facilities. Tolls are a huge issue in the New York metro already as about one-quarter of all road tolls collected in the country are collected in the region. Between high tolls and congested roads, the costs of shipping in and around the largest market in the country are very high and does have an impact on the competitiveness of the Ports of New York and New Jersey. I have been doing work on tolls and freight in the Northeast with Jon Peters and Cameron Gordon, and today we submitted a brief to the U.S. House of Representatives Committee on Transportation and Infrastructure about this topic. Here is what we wrote:

Statement from David A. King, Ph.D. and Jonathan R. Peters, Ph.D. to theCommittee on Transportation and Infrastructure of the U.S. House of RepresentativesPanel on 21^st Century Freight Transportation July 26, 2013New York, New York Dear Members of the Panel, We are pleased to be able to contribute to the discussion regarding freight movements in the United States.  We are academics who are engaged in the research of transportation matters on a national and international scale.  We have a particular interest in matters related to the New York Metropolitan Region, as we are located in this area. 

The Port of New York and New Jersey is the third most active maritime port in the Nation and the most active port on the Eastern Seaboard.  As such, the success of this port has regional importance as well as for the United States as a whole.  Your committee is studying the future national policy as it relates to freight and we commend your efforts.  Unfortunately, we have a long way to go to get to a single and clear national policy on freight movements. 

The Port of New York and New Jersey is an excellent case to study with respect to conflicting goals and outcomes for freight movements.  The physical infrastructure of this large and important maritime freight port is located in various areas - some on the mainland of the United States, some on a somewhat isolated peninsula and the rest on two islands around the fabulous deep and safe natural harbor.  Over the last 150 years, regional planners have developed highway, bridges and tunnels to link these various port facilities to facilitate freight movements. 

Yet, these facilities face very divergent futures if the current policies continue and operational practices are not coordinated.  Like all ports around the world, The Port of New York and New Jersey needs significant capital investment to remain competitive in the world freight market.  These investments are both on the land side as well as in the actual maritime facilities.  The Port Authority of New York and New Jersey is actively engaged in moving forward some of these capital investments - but the benefits of these investments seem to be biased towards certain states and will come at the expense of other areas. 

The Committee should seriously consider the impact of regional policies such as toll rates and road pricing and their impacts on national transportation assets.  Your committee is being charged with examining our national policy to address the needs of national freight movements.  Much as we need to discuss the national interest and funding for these projects – so we should also consider how regional policies impact national assets.  With the need to commit billions of dollars to deepen ports and raise bridge facilities, the sad reality is that the pricing of the road assets may render these investments unproductive. 

In our recent work, “Does Road Pricing Affect Port Freight Activity: Recent Evidence from the Port of New York and New Jersey”, which is currently under review for publication, we found that by examining port trucking data in New York and New Jersey, we estimate that bridge and tunnel toll costs may represent over 50% of the cost of moving freight into and out of the port facilities for the facilities located in New York State.  This is way above the national norm and significant higher than the cost of moving goods into and out of the New Jersey port facilities. 

These toll costs for the New York – New Jersey crossings are not driven by cost of providing the actual service – but in fact are linked to other expenditures and costs at the Port Authority of New York and New Jersey.  Bridge tolls have increased 60.2% percent over the last three years and the Port Authority has already approved a series of three additional increases that will result in bridge prices that will be roughly 241% of the 2010 rates – or about $110.00 per trip in 2015 for a five axle truck (an 18 wheeler).  These bridge tolls will be 81.9% profit to the Port Authority by the year 2015 if this occurs. 

The net effect of this is that maritime port facilities that are located in New York City in Brooklyn and Staten Island will effectively be driven out of business by these costs.  They will be unable to compete with other regional facilities and we may in fact drive cargo that should naturally flow into the Port of New York and New Jersey into other ports that are more remote from the final demand for the products.  This will increase road congestion, increase greenhouse gas emissions and lower our regional job base. 

We thank you for this opportunity to inform the committee and we would be happy to discuss these matters further with the committee or staff if they would help in your deliberations.