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Toll Road Gate

Walker: Navigating the challenges of rising toll rates

Nov. 9, 2023
Toll-management services can help fleets handle tolls and reduce costs on toll rates.

If you live in an area with tolls on roads, bridges, or lanes, you’ve probably noticed increases in rates in the past year or more. It’s not an isolated trend—rates have been increasing nationwide.

Some areas have seen an 8.8% increase in transponder rates over the past year, with an average increase of around 5%, and this trend will continue next year. Major toll agencies—including Chicago Skyway, Pennsylvania Turnpike Commission, Bay Area Toll Authority, and New York Thruway Authority—have announced toll increases that will go into effect in 2024. Depending on where your company is located and how frequently your drivers use tolls, this can have a noticeable effect on your bottom line.

So why is it that we’ve seen a widespread uptick in toll rates and more increases than typical in any given year? Without getting too much into the weeds, there are several causes, with many of them directly and indirectly due to the pandemic.

Traffic volume

Thanks to the pandemic, tolls are trying to catch up from lost revenue. Back in 2020, it seemed like no one was on the road and you could drive during peak travel hours with no traffic. State lockdowns and many companies shifting to a work-from-home model in response to the pandemic were responsible for that. While it was a benefit for those using our roadways, tolling authorities suffered a significant impact on their cash reserves.

While COVID-19 no longer has an impact on daily life like it once did, the ripple effects from the pandemic are still felt. Many companies have adopted a permanent or hybrid work-from-home model since the pandemic, and while traffic volumes have certainly picked back up, they still lag behind pre-pandemic levels. To make up for the difference in lost traffic volumes and to replenish depleted cash reserves, tolling authorities raised toll rates to fund vital infrastructure projects.

See also: CEO outlines growth strategy at Bestpass

Inflation and rising interest rates

Since the pandemic, something we’ve all felt is the increasing cost of living brought on by inflation and rising interest rates. Every time we go to the grocery store, fill up our car’s gas tank, dine out, or look to finance a home or vehicle, it’s noticed. Because of this, the cost to build or repair our infrastructure is also impacted. Building materials are more expensive, and labor costs are also on the rise. Labor union strikes have been increasingly common in recent years as workers seek better wages to keep up with inflation, and many contractors are preemptively increasing employee wages to retain workers. The end result is these labor and material cost increases are baked into the total cost of a building project.

While other issues have an impact, traffic volume, inflation, and interest rates are playing a key role in why tolling authorities are increasing rates to offset and fund much-needed infrastructure projects.

New toll sites coming soon

Regardless of your view on tolls, they are effective in generating revenue to pay for major projects. There are several new toll bridges and lanes that will be established in the next few years that may impact your operation. Here’s where those new tolls will be and when they’re expected to open.

  • Belle Chasse Bridge in New Orleans: live Q2 2024
  • Gordie Howe International Bridge (connects Detroit and Windsor, Ontario): live Q4 2024
  • New Choice/Express Lanes in Tennessee: live Q3 2025
  • Manhattan, New York, Congestion Pricing: live Q4 2025
  • California Otay Mesa II: live Q4 2026

Minimizing the challenges of tolls

For many trucking companies that deal with tolls on a regular basis, the costs associated and time spent managing toll bills or accounts are simply a cost of doing business. They may try to avoid them because either they don’t have an account with the tolling authority, or they want to save money by taking an alternative route, which often creates more problems than it solves. With the high cost of diesel and expectations from customers that deliveries will be completed within a specific window of time, efficient routing is key to reducing fuel costs and supporting on-time deliveries. That often means taking roads or bridges with tolls.

If you currently manage accounts with tolling authorities or pay toll bills individually, there is a simpler solution that allows you to receive the best possible toll rates. When you work with a toll-management provider, your vehicles receive even better rates than when you register vehicles directly with a tolling authority. That’s because toll-management providers are the tolling authority’s largest customers due to the number of vehicles in their network, and they receive discounted rates because of it. The toll-management provider then passes those discounts directly to its customers.

In fact, some customers can get up to a 60% discount on toll rates. Depending on how many vehicles are in your fleet and toll-usage rates, those savings can add up quickly. Plus, using toll-management services simplifies the back-end management of tolls and makes it easier to bill customers for toll costs.

In a landscape where toll rates are on the rise nationwide, using toll-management services to secure the best possible rates can reduce the impact on your bottom line while also alleviating the many pain points that come with managing tolls on your own.

Jason Walker is the chief revenue officer of Bestpass, a toll payment and management solution for commercial fleets and owner-operators. In this role, Walker oversees the sales and marketing teams and supports revenue-management functions. Walker joined Bestpass in 2022 with more than 10 years of experience in the trucking industry and 25 years of experience driving results across multiple industries and SaaS companies. 

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