Opinion: Zeroing in on Actual Cost of Tolls

This Opinion piece appears in the Dec. 23 & 30 print edition of Transport Topics. Click here to subscribe today.

By Mark Hornung

Senior Vice President of Strategic Projects

ALK Technologies

All commercial vehicles that pass through the “crossroads of America” are exposed to the continuous tolling of roads that connect Chicago to major metropolitan areas in the mid-Atlantic and New England states.

Going east on Interstate 90, the Chicago Skyway starts on the city’s south side for eight miles to the Indiana state line. The Indiana Toll Road takes over as I-80 joins in for the 156-mile ride to Ohio. The tolling continues for another 241 miles on the Ohio Turnpike.

In Youngstown, Ohio, I-80 splits from the turnpike, but tolling resumes on I-76 to Pennsylvania. At the border, the Pennsylvania Turnpike goes on to Pittsburgh, Philadelphia, Baltimore and many points in between.

The 758-mile trip from Chicago to Philadelphia via the Ohio and Pennsylvania turnpikes costs about $237 in tolls for a commercial vehicle, and the 759-mile trip via I-80 and U.S. 322, bypassing a long portion of the Ohio and Pennsylvania turnpikes, costs $124. The 700-mile trip to Baltimore via the Pennsylvania Turnpike and on to I-70 costs $170.

In general, toll costs from Chicago to destinations on the East Coast will account for between 8% and 19% of the total cost to operate commercial vehicles on these routes. The margin gets worse if you are going up and down the Northeast corridor. The tolls here account for as much as 23% of the total cost.

On the major corridors through this area of the country, only fuel and labor exceed tolls on a cost-per-mile basis, but those two have not been rising as sharply. From the third quarter of 2012 to the second quarter of 2013, toll rates have gone up by as much as 11%.

Much greater visibility and control are needed to manage this very volatile expense, but how? This would be difficult to achieve if the only sources of data for toll costs were the paper receipts drivers turn in for reimbursement. The amount of work it would take to go through each receipt and assign the actual toll costs to each lane, driver and customer would be enormous. For this reason, fleets traditionally have used cost allocation methods to account for tolls.

Electronic toll receipts do not make the job easier. Fleets that use automatic toll-collection systems such as E-ZPass still would need to look through reams of line-item transactions in their monthly statements to assign the actual toll costs.

Mapping, mileage and routing software applications offer an alternative. These applications provide a current and instantly searchable database of the posted rates for all toll facilities — tunnels, bridges and roadways — in North America.

The tolls database is combined with the latest advancements in map data and routing technology.

On the front end, fleets can use the technology to accurately price their services and to plan the least costly truck routes. To determine the toll costs, applications consider the origin, destination, route preference (fastest, shortest, toll discouraged, etc.), vehicle configuration (5-axle combination vehicle, 3-axle straight truck, etc.), time of day and other parameters.

The technology also can be used on the back end for post-trip route analysis to compare the planned route and estimated costs to the actual costs.

Having toll-cost visibility is only one part of the equation. Effectively managing route compliance is the other. A variety of technologies must operate in unison to make this possible. If drivers use company-issued transponders to pay for tolls, some may abuse the privilege and jump on toll roads whenever they please. The difference between the two Chicago-Philadelphia routes mentioned earlier is $113, enough to lose money on that lane if the wrong route is chosen.

It is possible to detect and correct noncompliant routes by using integrated mapping, mileage and routing systems. These systems are built for sharing data with dispatch, satellite tracking and in-cab navigation software systems, to name a few. With this integration, fleets can bridge the gap from route planning to real-time route execution.

Drivers can be given visual and audible instructions, as well as turn-by-turn guidance, to make them aware of the exact mile markers and locations to enter and exit toll roads. Exceptions can be detected immediately, and work flow processes kick in automatically to resolve situations quickly. As a last resort, nonapproved use of toll roads can be deducted from drivers’ pay.

For fleets that do not use transponders, pre-approved toll amounts can be automatically loaded onto fuel cards as a cash advance at the time of dispatch.

For fleets that use transponders, technology makes it possible to automatically compare the details of planned routes, including toll costs, to the electronic toll receipts.

Technology offers many new capabilities for managing toll costs. Shipments can be priced accurately from origin to destination. Controls can be put in place to hold the line on costs. And rather than allocate toll costs, the actual costs can be assigned to each driver, vehicle, shipment and customer.

In the final analysis, it might be practically impossible to defend all routes from the rising cost of tolls, but at the very least, technology will shine the light on the areas where money is leaking through the cracks.

Founded in 1979 and based in Princeton, N.J., ALK is a provider of navigation software.