Road pricing acceptable only if benefits exceed cost, says FTA

The Freight Transport Association (FTA) says that road pricing can only be acceptable to industry if the benefits it delivers in terms of reduced journey times and improved journey time reliability exceed the cost to operators.

The FTA’s latest Quarterly Transport Activity Survey (QTAS) for July 2007 set out a possible scenario for operators whereby road pricing would deliver school holiday levels of traffic every day of the year. Some operators believed cost and efficiency savings were possible under such conditions, although the majority anticipated insufficient changes to make a noticeable difference to HGV operating costs or to warrant a restructuring of their existing vehicle routeing and deployment patterns. Key findings were:

One in three operators expected to reduce fuel usage as a result of less time spent sitting in traffic jams. The average reported saving was 8% on current usage. For a 7.5 tonne rigid, this represents an annual saving of £750 per annum.

One in four operators would be able to reduce driver related costs (due to less overtime being needed). One in seven operators would reduce the total vehicle kilometres carried out, and one in six would be able to reduce the number of vehicles operated.

FTA economics analyst Elizabeth Leroy said that operators consistently report poorer and poorer reliability on the motorway and trunk road networks, and in urban areas. The Dept for Transport’s latest figures for network reliability on the strategic road network show average vehicle delays have risen by 8.7% since 2004/5 on the slowest 10% of journeys. This compares to the government target of delays getting no worse than they were in 2004/5. A similar picture is evident on urban roads, where average off-peak delays rose by 4% between 2004 and 2006.

“The latest QTAS survey results reinforce FTA’s view that road pricing is not the panacea to the country’s transport woes. For many operators, incremental improvements of a few minutes saved here and there cannot be aggregated up into a benefit that can be realised through additional deliveries on a vehicle journey,” says Leroy.

“The highways authorities must apply Mr Micawber’s principle when setting road pricing tariffs and identifying exempt vehicle groups; road pricing for industry is only acceptable where the money saved exceeds the money paid.”