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The impacts of time of day pricing on the behavior of freight carriers in a congested urban area: Implications to road pricing


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  • Holgui­n-Veras, José
  • Wang, Qian
  • Xu, Ning
  • Ozbay, Kaan
  • Cetin, Mecit
  • Polimeni, John


This paper describes the key findings from a major research project aimed at assessing the impacts of the Port Authority of New York and New Jersey's time of day pricing initiative on the behavior of commercial carriers. The paper, believed by the authors to be the first comprehensive study on the subject, highlights key implications for road pricing policy. One of the most interesting findings is that carriers respond to time of day pricing by implementing multi-dimensional responses involving Productivity increases, Cost transfers, and Change in facility usage. This implies a more nuanced response than suggested by micro-economic theory, which would only predict a change in facility usage. In fact, no carrier was found to have responded by implementing only changes in facility usage, which leads to the authors to believe that this is a last resort alternative. In terms of numerical importance, three combinations of strategy groups represent almost 90% of the cases: Productivity increases (42.79%), followed by Changes in facility usage and Cost transfers (27.60%) and Productivity increases and Changes in facility usage and Cost transfers (19.32%). The fact that some of these responses impact only the carrier (i.e., Productivity increases) while others mostly impact the receivers (Changes in facility usage and Cost transfers) lead the authors to believe that the nature of the response is determined by the balance of power between carriers and receivers. If carriers dominate the relationship, then it is likely that policies that mostly impact receivers are implemented; otherwise, the carriers have no choice but implementing strategies that help them cope with the impacts of pricing without impacting their customers, i.e., productivity increases. In this context, the authors' conjecture is that carriers consider changes in facility usage to be a very disruptive alternative that forces them--and more importantly their customers--to alter their shipping/delivery patterns. It should be pointed out that, although carriers stand to benefit from working during the off-peak hours, they could only do so if their customers are willing to work during the off-peak hours. The data indicate that 36 carriers (20.2%) changed behavior because of the time of day pricing initiative. This number includes 17 carriers (9.0%) that reacted by increasing shipping charges to receivers, which illustrates the need to find out more about how receivers reacted to the time of day pricing initiative. If the carriers that only increased shipment charges are excluded, 15.3% of carriers changed behavior because of time of day pricing.

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Bibliographic Info

Article provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.

Volume (Year): 40 (2006)
Issue (Month): 9 (November)
Pages: 744-766

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Handle: RePEc:eee:transa:v:40:y:2006:i:9:p:744-766

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  1. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, American Economic Association, vol. 59(2), pages 251-60, May.
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Cited by:
  1. José Holguín-Veras & Michael Silas & John Polimeni & Brenda Cruz, 2007. "An Investigation on the Effectiveness of Joint Receiver–Carrier Policies to Increase Truck Traffic in the Off-peak Hours," Networks and Spatial Economics, Springer, Springer, vol. 7(3), pages 277-295, September.
  2. Richard Fabling & Arthur Grimes & Lynda Sanderson, 2011. "Any port in a storm? The impact of new port infrastructure on New Zealand exporter behaviour," Reserve Bank of New Zealand Discussion Paper Series DP2011/01, Reserve Bank of New Zealand.
  3. Friesz, Terry L. & Mookherjee, Reetabrata & Holguín-Veras, José & Rigdon, Matthew A., 2008. "Dynamic pricing in an urban freight environment," Transportation Research Part B: Methodological, Elsevier, Elsevier, vol. 42(4), pages 305-324, May.
  4. Holguín-Veras, José, 2011. "Urban delivery industry response to cordon pricing, time-distance pricing, and carrier-receiver policies in competitive markets," Transportation Research Part A: Policy and Practice, Elsevier, Elsevier, vol. 45(8), pages 802-824, October.
  5. Sathaye, Nakul & Harley, Robert & Madanat, Samer, 2010. "Unintended environmental impacts of nighttime freight logistics activities," Transportation Research Part A: Policy and Practice, Elsevier, Elsevier, vol. 44(8), pages 642-659, October.
  6. José Holguín-Veras & Qian Wang & Ning Xu & Kaan Ozbay, 2011. "The impacts of time of day pricing on car user behavior: findings from the Port Authority of New York and New Jersey’s initiative," Transportation, Springer, Springer, vol. 38(3), pages 427-443, May.
  7. Fabling, Richard & Grimes, Arthur & Sanderson, Lynda, 2013. "Any port in a storm: Impacts of new port infrastructure on exporter behaviour," Transportation Research Part E: Logistics and Transportation Review, Elsevier, Elsevier, vol. 49(1), pages 33-47.
  8. Chen, Xiaoming & Zhou, Xuesong & List, George F., 2011. "Using time-varying tolls to optimize truck arrivals at ports," Transportation Research Part E: Logistics and Transportation Review, Elsevier, Elsevier, vol. 47(6), pages 965-982.
  9. Silas, Michael A. & Holguín-Veras, José & Jara-Díaz, Sergio, 2012. "Optimal distribution of financial incentives to foster off-hour deliveries in urban areas," Transportation Research Part A: Policy and Practice, Elsevier, Elsevier, vol. 46(8), pages 1205-1215.
  10. Holgin-Veras, José, 2008. "Necessary conditions for off-hour deliveries and the effectiveness of urban freight road pricing and alternative financial policies in competitive markets," Transportation Research Part A: Policy and Practice, Elsevier, Elsevier, vol. 42(2), pages 392-413, February.
  11. José Castillo-Manzano & Antonio Sánchez-Braza, 2013. "Managing a smart bicycle system when demand outstrips supply: the case of the university community in Seville," Transportation, Springer, Springer, vol. 40(2), pages 459-477, February.
  12. Theo Arentze & Tao Feng & Harry Timmermans & Jops Robroeks, 2012. "Context-dependent influence of road attributes and pricing policies on route choice behavior of truck drivers: results of a conjoint choice experiment," Transportation, Springer, Springer, vol. 39(6), pages 1173-1188, November.


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