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20 Separation of Vehicles--CMV-Only Lanes Table 2.5. Forecasts of 2010 base case VMT by vehicle configuration and western uniformity VMT impact for 13 analyzed states. Base Case VMT Scenario VMT Scenario Vehicle Configuration (Millions) (Millions) Percent Change Five-Axle Tractor Semitrailer 14,476 3,442 -76% Six-Axle Tractor Semitrailer 1,924 938 -51% Five- or Six-Axle Double 1,351 750 -44% Six-Axle Truck Trailer 626 607 -3% Seven-Axle Double 188 2,190 +1,065% Eight-or-More-Axle Double 213 5,626 +2,541% Triples 45 473 +951% Total 18,823 14,028 -25% Source: U.S.DOT, Western Uniformity Scenario Analysis: A Regional Truck Size and Weight Scenario Requested by the Western Governors' Association, April 2004, tractor-semitrailer. On a tonnage basis, less than one-half of tractor-semitrailer shipments was estimated to divert to LCVs."25 Although costs increase due to bridge and geometric improvements, it is expected that pave- ment costs will be reduced due to the reduced number of VMT. Also, note that many of the LCV routes are currently designated as such, and already have strengthened pavement and bridges. The costs reported in the study may not be typical of new, exclusive CMV-only applications. Finally, one of the most significant benefits highlighted in this study is that of shipper savings. Considering that the majority of freight on the system travels by truck (approximately $610 bil- lion in business per year), even a modest saving in shipper cost can make a significant difference. This study suggests that by expanding LCV operations, shipper costs may be reduced by as much as $2 billion per year, representing an almost 4% saving of total shipper costs within the region. 2.4.2 Policy Changes Required for LCV Implementation Appendix A notes that there are a number of regulatory and policy changes that would be needed to facilitate LCV implementation for CMV-only lanes. The Reason Foundation has pro- vided several recommendations with respect to LCV operations, which include the following:26 Provision of ROW in interstate and freeway corridors, Liberalized size and weight limits on truckway lanes, and Removal of ban on interstate tolling for truckway lanes. 2.5 Tolling and Privatization The application of tolls for trucks operating on CMV-only lanes and use of the toll revenues to finance them has been reported to be a particularly promising concept in a variety of studies, due to the higher value of time and reliability of trucks compared to passenger vehicles, and the con- gestion reduction benefits for trucks operating on CMV-only lanes. Studies conducted by the Rea- 25 U.S.DOT, April 2004, Western Uniformity Scenario Analysis: A Regional Truck Size and Weight Scenario Requested by the Western Governors' Association. 26 R. W. Poole, Jr. and P. Samuel, Policy Study 316, Corridors for Toll Truckways: Suggested Locations for Pilot Projects, Reason Foundation, February 2004.

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Background and Key Concepts 21 son Foundation have supported the implementation of toll truckways with LCV operations, based on the rationale that operating LCVs on dedicated truckways offer truckers not only travel time and reliability benefits, but increased productivity, for which truckers would be willing to pay higher tolls. 2.5.1 Truck Value of Time In order to assess the feasibility of tolling CMV-only lanes, it is important to understand how truck operators value time savings. Generally speaking, a trucker's value of time is a function of many factors, which include, but may not be limited to, the type of trucking business operation (for example, for-hire and private carriers), truck trip length characteristics (short-haul versus long-haul trips), the type of truck (medium versus heavy trucks), the type of delivery schedule (not fixed delivery schedule versus penalty on late delivery), as well as the type of highway facil- ity (noncongested rural highways and heavily congested urban areas). Several methods have been employed to measure a trucker's value of time, including the following: Revenue or net operating profit method. This method estimates truck value of time in terms of the net increase in profit resulting from reduction in travel times. Cost-saving method. This method estimates truck value of time in terms of the cost savings to truck operators per unit of time. Cost-of-time method. This method calculates the cost of providing time savings for a specific project. Willingness-to-pay method. This method measures the "market" or "perceived" value of time for trucks based on observed or stated choices under tradeoff situations involving time and money. Appendix A includes data from several studies that have addressed value of time using these methods and the application of these methods to estimate optimum toll rates with various val- ues of time assumptions. 2.5.2 Productivity Benefits from LCV Operations and Associated Tolling Implications The Reason Foundation study27 on toll truckways discussed earlier is the first comprehensive study that looks at the feasibility of developing toll truckways to support LCV operations, based on considerations of productivity benefits of LCV operations. The study analyzes how productivity benefits from LCV operations and toll truckways would provide the incentive for the application of tolls on these truckways as a way of financing such facilities. Toll truckways, because of their physical separation from general purpose lanes, also address safety concerns of operating LCVs on general purpose lanes by completely eliminating the interaction between autos and LCVs. The Reason Foundation approach for the quantification of productivity benefits from LCV operations is based on the estimation of the incremental earnings for truck operators per day and the average number of miles driven per day on toll truckways, to arrive at the incremental earnings per mile. Thus, the approach not only considers the increase in payload due to LCV operations, but also includes the productivity gains associated with higher speeds on toll truckways, in the quantification of productivity benefits. The inherent assumption in this analysis is that trucking firms would be willing to pay one-third of the value of productivity benefits from LCV operations in the way of tolls. 27 P. Samuel, R. W. Poole, Jr., and J. Holguin Veras, Policy Study 294, Toll Truckways: A New Path toward Safer and More Efficient Freight Transportation, Reason Foundation, June 2002.

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22 Separation of Vehicles--CMV-Only Lanes Table 2.6. Private ROI for toll truckways for 40,000 ADT. Traffic ($1 Million/Mile Capital Cost) Toll = $0.40 Toll = $0.80 25% Trucks (1,000) 8.60% 17.26% 50% Trucks (2,000) 16.85% 33.12% 75% Trucks (3,000) 23.92% 48.46% 100% Trucks (4,000) 32.72% 64.52% $2 Million/Mile Capital Cost 25% Trucks (1,000) 4.12% 9.17% 50% Trucks (2,000) 8.85% 17.34% 75% Trucks (3,000) 13.04% 25.31% 100% Trucks (4,000) 16.97% 33.19% $3 Million/Mile Capital Cost 25% Trucks (1,000) 2.26% 6.23% 50% Trucks (2,000) 5.97% 12.02% 75% Trucks (3,000) 9.03% 17.40% 100% Trucks (4,000) 11.76% 22.66% Source: Reprinted from Samuel, P., R. W. Poole, Jr., and J. Holguin Veras, Policy Study 294, Toll Truckways: A New Path toward Safer and More Efficient Freight Transportation, Reason Foundation, June 2002, The study compared a variety of different LCV configurations with conventional semitrailer configurations to determine the potential productivity gains from LCV operations. Based on the results from this study, double-long LCV operations on toll truckways yield maximum productiv- ity benefits and, consequently, the maximum toll rates These are followed by triple-short LCV operations. The maximum feasible toll rate is observed for double-long trucks of $1.83 per mile, followed by $1.15 per mile for triple-short trucks. Appendix A considers a number of issues associated with the policy and tax implications of tolling truckways and industry concerns. It also provides a discussion of how revenues from tolls could be used to support various forms of financing for the facilities. The notion of privatized toll facilities has been offered as an attractive option for financing CMV-only lanes, because this approach can provide access to large pools of new capital, transfer risk from the public to the pri- vate sector, create potential to develop multistate projects, and other potential innovations associ- ated with design and operations concepts. In order to demonstrate the potential viability of CMV-only lanes operating as private facilities, Samuel et al.28 examined various operating scenar- ios based on assumptions about capital costs, percent of trucks using the facility (based on average rural interstate truck volumes), and toll rates. The results were presented as potential return on investment (ROI is a measure used to quantify the profitability of an investment for the private sec- tor in relation to the total cost of the investment). As seen from Table 2.6, the ROI for the private sector is directly proportional to the toll rate and the number of trucks using the CMV-only lanes. Positive ROIs are observed for all the scenarios analyzed (based on varying assumptions related to capital cost, truckway utilization, and toll rates), implying that the investment is always profitable under the given scenarios. The profitability (ROI) 28 P. Samuel, R. W. Poole, Jr., and J. Holguin Veras, Policy Study 294, Toll Truckways: A New Path toward Safer and More Efficient Freight Transportation, Reason Foundation, June 2002.

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Background and Key Concepts 23 increases with increased truckway utilization as higher toll revenues (and net earnings) are gener- ated for a given toll rate and capital cost. However, it is important to note that the number of trucks using the CMV-only lanes (utilization) would be a function of the toll-rate. Thus, the results from the table would be particularly useful in analyzing what the optimal toll rates should be that would result in the highest ROI, based on the determination of the percent trucks using the CMV-only lanes (utilization) for different toll rate scenarios (typically, this can be done using data on truck value of time and an understanding of truck behavior under tolls using stated preference surveys). Appendix A provides information about some recently proposed public-private partnerships in which CMV-only lanes have been incorporated. 2.5.3 Examples of Truck Tolling Approaches from Other Countries Appendix A presents information on national truck tolling systems that have been implemented in Austria, Switzerland, and Germany. None of these systems are applied on CMV-only facilities. The approaches use different types of electronic toll collection and/or global positioning system (GPS) data systems to collect information about truck use of facilities. These approaches could be applied to tolling/financing of CMV-only lanes.