Do Toll Roads Help or Harm Freight Logistics?

Even those of us who understand that transporting goods is a complex system of systems can sometimes fail to identify the subtle nuances that can have massive influence on supply chain logistics. 

As the state of Washington opens up its new toll road I’m circling back to freight and transportation infrastructure. The relationship between freight companies and the roads their trucks travel on affects businesses and consumers; for better or for worse. Bad roads, expensive routes and long trips play into trade relationships and influence how goods are bought and sold or rather, how much those goods are ultimately sold for. 

Washington’s toll road is intended to move freight more efficiently by creating additional route options for all commuters. The region of the state has a steady flow of freight traffic due to the nearby airport and Tacoma shipping port, a key connection point between Alaska and the lower 48 states, as well as, between the U.S. and Asia. Its deep waters allow for some of the largest freight ships to dock making it an important container hub. Washington’s dynamic is not altogether unique. It can be found across the country at every shipping hub.

Will the benefits of less traffic and well maintained roads offset the increased travel costs for freight companies moving goods to and from the port of Tacoma?

Truckers Traditionally Oppose Toll Roads

In general, the freight industry tends to be wary of new toll roads as they add expenses to conducting business. Tolls are intended to generate money that should be put to use maintaining the very roads drivers are charged for using. However, it isn’t unusual to find that the money collected funds infrastructure projects unrelated to the toll road. More often than not, a single toll road generates millions more than they actually need to care for the road. 

For trucking fleets currently short on drivers, navigating ever changing compliance regulations and paying higher prices for truck maintenance adding toll expenses to routes narrows profit margins. Studies show that toll road expenses can represent as much as 10% of trip expenses for long haul routes. To minimize the toll costs, freight companies opt to pour time into remapping cheaper routes. However the less expensive roads tend to be indirect routes which can work against freight timelines or require additional fuel costs. 

For owner-operator drivers who must pay tolls out of pocket, these “little” expenses add up, making it too costly to do business. Roughly 99% of freight companies are made up of 100 trucks or less. Mega trucking companies operating over 1,000 trucks represent a relatively small percentage. However, regardless of company size there are approximately 15 million freight trucks in operation, collectively traveling over 500 billion miles per year, paying over $30 billion in state and federal fuel taxes. Adding tolls to the mix might not be a “little” expense over all and particularly hard on small companies.

Projects wholeheartedly intended to alleviate freight traffic and build efficient transportation infrastructure can add complexity to routing decisions for fleets. Complications like this have shown to affect driver retention rates, impact a company's ability to adhere to compliance regulations while rerouting cargo and erode trust when a freight company underquotes shipping costs.

State Tolls Create Money and Options

From the state’s perspective, a toll road can generate funding for important projects including roads and the very infrastructure that freight companies rely upon to safely transport goods. Money collected might not go directly back into the stretch of road it was collected on, but it will likely be used on one of the many roads freight companies do use elsewhere in the state.

Paying tolls, unlike fuel taxes, is optional. Freight companies can choose to pay a premium in the form of a toll for efficiency. But, the decision to save time or money is tough in an industry where knowing exactly how long it will take to move goods is always a benefit when it comes to budgeting.

Yet, a toll road should create efficiencies for non toll roads simply because some of the congested traffic will be removed. In theory, freight companies could reap the benefits of efficiency without always having to pay tolls to do so.  This is what Washington hopes to accomplish by connecting industrial portions of the Tacoma area.  The toll road should ultimately connect various supply chain points together and offer freight companies, and commuters, multiple options to move between points depending on their needs.

Transportation topics can leave us with lingering questions, as this topic certainly does. Do more options create more obstacles or opportunities? And, do freight companies “owe” states more money if they hope to continue business or are states responsible for keeping industry local through well maintained infrastructure? The two can’t exactly live without each other, but what does the ideal relationship look like between truck drivers and the roads they operate on?