Truck Tolling: Understanding Industry Tradeoffs When Using or Avoiding Toll Facilities (2012) / Chapter Skim
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Pages 7-20
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From page 7... ...
5 | P a g e Chapter 1 Background An economic rationale has long been made for the use of tolls as a funding mechanism for roadways, bridges, and tunnels in the United States. Additionally, tolling is advocated as a means of allocating scarce roadway capacity among users and achieving an array of other policy and environmental objectives.
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6 | P a g e • Driver: representing the employee who has the primary interface and decision with tolling • Dispatcher/fleet manager: representing a truck driver's manager, who would direct a driver to use or avoid a toll route • Shipper/receiver/third-party logistics agent (3PL) : representing the cargo owner, and/or the entity that arranges freight transportation, including cost and service parameters, and possibly accessorial charges such as for fuel and tolls.
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From page 9... ...
7 | P a g e Profile of Businesses that are Involved in Toll Decision Making Transportation policy makers tend to view trucks or the trucking industry as homogeneous, but in fact the industry is tremendously varied, and a profile was required to help examine the factors that influence different industry segments' rationale in making decisions to use or avoid toll facilities. Since the trucking industry is in fact heterogeneous, a classification of the different types of trucking firms and customer-carrier relationships is instrumental in identifying the "willingness to pay" for tolls.
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8 | P a g e Table 1: U.S. Truck Vehicle Inventory, 2002 Thousands of Trucks Gross Vehicle Weight Rating Examples Light Trucks Less than 6,001 lb 62,617.3 Class 1 Full Size Pickup, Minivan, SUVs 6,001 to 10,000 lb 17,142.3 Class 2 Crew Size Pickup, Full Size Pickup, Minivan, Step Van, Utility Van Medium Trucks 10,001 to 14,000 lb 1,142.1 Class 3 City Delivery, Mini Bus, Walk-In 14,001 to 16,000 lb 395.9 Class 4 City Delivery, Conventional Van, Landscape Utility, and Large Walk-In 16,001 to 19,500 lb 376.1 Class 5 Bucket, City Delivery, and Large Walk-In Light-heavy Trucks 19,501 to 26,000 lb 910.3 Class 6 Beverage, Rack, School Bus, Single Axle Van Heavy Trucks 26,001 to 33,000 lb 436.8 Class 7 Furniture, High Profile Semi, Medium Semi Tractor, Refuse, Tow, City Buses 33,001 to 40,000 lb 228.8 Class 8 Cement Mixer, Dump, Panel, Fire, Tanker, Heavy Semi Tractor, Refrigerated Van, Semi Sleeper 40,001 to 50,000 lb 318.4 50,001 to 60,000 lb 326.6 60,001 to 80,000 lb 1,178.7 80,001 to 100,000 lb 68.9 100,001 to 130,000 lb 26.4 130,000 lb or more 6.3 Total, Class 3 - 8: 5,415.3 Notes: Average vehicle weight is the empty weight of the vehicle plus the average load of the vehicle; excludes vehicles owned by Federal, state, or local governments; ambulances; buses; motor homes; farm tractors; unpowered trailer units Source: U.S.
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9 | P a g e • FOB Origin: the buyer pays the freight charges and assumes title to the cargo upon pickup from the seller. • FOB Destination: the seller pays the freight charges and owns the cargo until delivery to the buyer.
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10 | P a g e Private trucking fleets make up the vast majority of commercial trucks on the nation's roads. According the National Private Truck Council's report titled "America's Private Fleets" (Schulz, 2010)
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11 | P a g e both TL and LTL divisions. This section focuses on the TL operation, which simply means that haul between shipper and receiver is a full TL, rather than a LTL load with multiple pickups or deliveries.
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12 | P a g e The research team interviewed three full truckload carriers which were representative of the industry. A large truckload carrier (12,000 drivers, full logistics services)
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13 | P a g e Based on the nature of the service, many shippers' packages are loaded into a single vehicle; the ability to pass tolls on at the package level does not exist today, so carriers build tolls into their rates. Carriers view increasing tolls and fees as part of their cost structure and pass congestion delays and toll expenses on as part of the costs of doing business.
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14 | P a g e Many drayage companies act as brokers who hire IC's to move loads between rail terminals and customers, or between port terminals and rail terminals or between equipment depots and customers or rail terminals. Toll reimbursement, if any, tends to vary based on regional factors.
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From page 17... ...
15 | P a g e The services provided by 3PL's are in contrast to traditional transportation contracts involving only two parties: shipper and carrier. In general, many companies break from this traditional relationship in order to achieve cost reductions, or increases in the efficiency of their transportation or supply chain activities.
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16 | P a g e 3PL's get paid based on a variety of metrics which include cost savings and service performance. Due to these two factors tolls are typically seen as a cost of doing business and are included in the carrier rates.
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17 | P a g e Analysis and Summary There was consensus across all segments of the trucking community regarding the need to maximize driver productivity and reduce fuel costs. Tolls in general are a small percentage of the total cost of trucking, compared to the cost of driver recruiting and retention, fuel, insurance, equipment and the administrative costs of invoicing.
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18 | P a g e IC's, or owner operators, are estimated to account for 11 percent of the 3.2 million truck drivers in the US (Estimates of the US truck driver population vary widely depending on source. The 3.2 million figure comes from the Bureau of Labor Statistics based on the 2000 US Census; at the higher end of the spectrum, the Federal Motor Carrier Administration estimates the US truck driver population at 5.6 million (Commercial Motor Vehicle Facts, April 2011)
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