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The Myths, the Truth and the Possible in Freight Road Pricing in Congested Urban Areas

By José Holguín-veras


The paper analyzes the evidence regarding freight road pricing, complements it with game theoretic analyses, and concludes that moving trucks to the off-peak hours require comprehensive policies targeting key components of the supply chain (i.e., receivers and carriers). The paper shows that a request from receivers asking carriers to do off-peak deliveries is likely to have an impact across the entire carrier industry; while road pricing only impacts specific industry segments. This suggests that the most efficient way to move truck traffic to the off-peak hours is to provide financial incentives to receivers in conjunction with freight road pricing. Should a sufficient number of receivers be willing to accept off-peak deliveries, the carriers will follow suit. The paper considers a toll surcharge to finance off-peak delivery initiatives. The paper highlights and rebukes a number of myths related to freight road pricing in urban areas. Separating myth from truth and identifying the possible is a necessary condition to achieve the sound policy objective of moving towards a more balanced use of the existing transportation capacity.

Year: 2014
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