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

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.