Diversion: trucks came back to Ohio Turnpike after rates went down, but...

By LYNDON FINNEY
The Trucker Staff

2/22/2008

The following is the lead article from a series of articles on what might happen if privatization of roads led to huge increases in tolls and truckers diverted to less safe but free roads because of those increases.

Click on the links below for other articles in that series.

Privatizing toll roads diverts truck traffic, may cause crashes, study says

Toll increases and resulting traffic shift can cost lives, data reveals

FHWA official says marketplace will keep private toll rates in check

Report verifies what group has been saying, OOIDA executive says

ATA says toll research shores up points made in privatization policy

Tale of two tolls: 1-cent increase helps send trucks back to Bellevue

MAIN ARTICLE BEGINS BELOW

HARRISBURG, Pa. — In the mid 1990s, the Ohio Turnpike Commission decided traffic on the turnpike had reached the point that a third lane was needed.

The commission voted to raises tolls, as much as 82 percent, to fund the expansion on what is a major artery linking Chicago to the East Coast.

The higher rates were phased in from 1995 to 1999.

(The turnpike runs east and west generally along the northern border of Ohio. It is also Interstate 80 from the Pennsylvania border to the Cleveland area where is becomes Interstate 80-90 all the way to the Indiana border.)

Compounding the situation was the 55 mph speed limit on the turnpike.

So what happened?

Truckers left the turnpike in droves, choosing the price-friendly confines of four-lane uncontrolled access highways as well as two-lane roads.

In the period from 1997 to 1999, just over 2.1 million large trucks traveled the turnpike each year.

By 2003, that number had dropped by 1.2 million trucks annually, most of which, Ohio officials said, started using alternate highways.

In 1999, big rigs accounted for 227 million vehicle miles traveled. By 2003, that number had dropped to 207 million.

To help get the large trucks back on the turnpike, in 2004 the state temporarily lowered toll rates by drastic margins and raised the speed limit to 65 mph.

The program was named the Northern Ohio Freight Strategy on Traffic and Safety.

That year, 2.2 million trucks used the turnpike traveling 244 vehicle miles.

In 2006, 2.8 million large trucks traveled 321 million miles.

Rates for large trucks were increased 1 cent per mile in 2007, and utilization declined slightly, more than anything because of the national economy downturn, including a decrease in freight volume, turnpike officials say. (It now costs $33.50 for a cross-state trip as opposed to $31 from Jan. 1, 2005, to Dec. 31, 2006. Prior to 2005, it cost $42.25 for a cross-state trip on the turnpike.)

“If some trucks are using other routes, we strongly believe it’s because of difficult economic times in general and not likely the one-cent per mile toll adjustment,” Lauren Hakos, public affairs and marketing manager at the Ohio Turnpike Commission, said.

However, the major of one Ohio town on U.S. Highway, said truck traffic in his town had gone back up 10 percent during 2007, and he felt it was at least in part as a result of the new toll.

According to the commission’s 2006 annual report, while truck traffic had gone up by 14 percent as a result of the lower tolls and the higher speed limit, the increase in commercial traffic fell far short of the predicted 30 to 40 percent increases and that increased level of truck traffic was not enough to offset the temporary commercial toll reduction.

While the commission discussed making the temporary toll for large trucks permanent, it just wasn’t feasible if the commission was going to maintain its capital improvement program, Executive Director Gary C. Suhadolnik said in the annual report.

Ohio’s experience was the basis for a recent study first reported in the Feb. 1-14 issue of The Trucker that was titled “Empirical Evidence of Toll Road Traffic Diversion and Implications for Highway Infrastructure Privatization.”

The study was co-authored by Peter F. Swan of Pennsylvania State University-Harrisburg’s School of Business Administration and Michael H. Belzer of Wayne State University’s College of Liberal Arts and Sciences. Wayne State is located in Detroit.

Swan does a lot of work in transportation research.

“The subject of road privatization has kind of been a hot topic over the last couple of years,” Swan said in an interview with The Trucker. “As an economist, one of the things that occurred to me and others is the law of supply and demand. Typically, when the price goes up, the demand goes down for a highway or whatever. And it makes sense to believe that a private operator setting a price for a highway they control would price it so they would maximize their profitability. That probably should happen at a point where people who used to use that highway ?  assuming it wasn’t privatized to begin with — suddenly stop using it. Many people who prefer this privatization of highways suggest ? and I mean literally suggest —  that no diversions will occur as a result of privatization of highways and it seemed like an absurd notion to me and other people.

 “In a nutshell, the conclusion of the study was that if you raise the price, truckers will divert to other roads and this is important because many of those are two-lane roads that are inherently less safe than the turnpike, with crash rates roughly 10 times what a rural interstate is,” Swan said.

The study’s authors estimated that in 2005 if the Ohio Turnpike had been operated by a for-profit, private operator, under the law that operator could have raised tolls to roughly three times what they were under the public turnpike authority, resulting in about a 40 percent diversion of trucks from the Ohio Turnpike to other roads.

When trucks divert, safety suffers and many of the communities along the affected road suffer, which was the case in Ohio, Swan said.

“They didn’t particularly want trucks they felt belonged on the turnpike running through their towns with increased congestion, noise, etc. — basically just from raising the rate on the turnpike,” he said.

 Swan said that while the analysis of his study was limited to Ohio and the major alternative routes to Interstate 80 through Ohio, there were general lessons to be learned that would be applicable to any state where a public-private partnership might be formed.

“Although the evidence supporting the prediction [of the study] is compelling, the effects of toll increases for other highways would be different, depending on different substitute roads, different costs of diversion, and therefore a different elasticity of demand for that particular set of

highways,” the study said. “However, the same general rules should apply. If the elasticity of demand is lower, then prices probably would rise higher before significant diversions would occur, but significant diversions would still occur. Because we know that secondary roads pose greater safety hazards, the safety cost of diversion will be substantial. (See related article below.)

“Some deadweight loss and negative externalities to the economy necessarily will occur, as well, because truckers will divert to less efficient highways in spite of the cost in time, fuel, wear-and-tear on the equipment, and the added crash risk that insurance policies generally cannot capture. If the elasticity of demand is higher, then diversions will occur at a lower toll rate, but would still occur.” 8

WHERE THEY WENT: This map shows route of Ohio Turnpike and some of the alternate highways that truckers took when the rates we raised in the mid 1990s. Many trucks returned to the turnpike when rates were reduced Jan. 1, 2005, and as a result of raising the speed limit from 55 mph to 65 mph, but the mayor of Bellevue says that truck traffic in his down has increased 10 percent since the rate was raise 1 cent a mile Jan. 1, 2007.