Research

Project Number:
06-07

Research Project:
Evaluating the Efficiency of Traffic Mitigation Fees at the San Pedro Bay Ports In a Congestion-Pricing Framework

P.I. Name & Address:
Seiji S. C. Steimetz
California State University, Long Beach
Department of Economics
1250 Bellflower Boulevard
Long Beach, CA  90840
Tel:  (562) 985-5078
Fax:  (562) 985-5804
Email:  ssteimet@csulb.edu

Project Objective:
The purpose of this research is to evaluate the economic efficiency of the recently implemented “Traffic Mitigation Fee” (TMF) at the San Pedro Bay ports by comparing it to a fee structure that would generate a socially optimal mix of peak and off-peak truck traffic.  This research focuses on delay costs suffered by the trucking community at the hand of shippers who dispatch an inefficiently large number of trucks to the ports during peak periods.

Truckers are typically paid on a per-load basis, so delays caused by congestion result in lost income opportunities.  Per-load payment also implies that shippers have no incentive to compensate truckers for these delay costs.  This situation produces a wedge between the private cost that shippers face for each peak-period trip and the social costs that each trip generates, including the loss of trucker income and productivity.  What results is an inefficiently large degree of truck traffic at the ports, where the magnitude of this inefficiency is measured by the difference between the marginal social cost and marginal private cost of each trip.  In the context of congestion delays, this difference represents the external delay costs that shippers impose upon the trucking community when dispatching trucks to the ports during peak periods.  Charging shippers (or their agents) an “optimal” congestion fee, equal in value to these external costs, would force shippers to consider such costs in their dispatching decisions.  In other words, an optimal congestion fee would “correct” these externalities and reduce peak-period truck traffic to socially efficient levels.

The primary objective of this project is to develop a congestion-pricing framework for determining optimal peak-period fees, levied on shippers (or their agents), that would correct external delay costs among truckers servicing the ports.  Aside from prescribing an optimal TMF, these fees could be compared to the existing TMF in order to evaluate its relative economic efficiency.

The impact of any given fee on the distribution of peak and off-peak truck traffic may depend on how sensitive shippers are to such fees.  So a secondary objective of this project is to develop a framework for predicting how the shares of peak and off-peak traffic change as the TMF changes, based on estimated or simulated values of shipper fee sensitivity.  This framework can be used to predict the distribution of truck trips under an optimal fee structure and to evaluate the prospects of using the current TMF to shift a substantial degree of truck traffic to off-peak gate hours.

This project falls within the METRANS “Commercial Goods Movement and International Trade” focus area.  It is also related to METRANS Projects AR04-01, AR05-01, and AR05-12.

Task Descriptions:
Primary Objective Tasks
1. Deriving, modifying, and analyzing a queuing-delay and congestion cost-model
2. Acquiring terminal throughput data and upstream traffic data
3. Calibrating queuing-delay and congestion-cost model to terminal, taffic, and commercial “value of time” data
4. Estimating optimal peak-period congestion fees from queuing-delay and congestion-cost model

Secondary Objective Tasks
1. Acquiring data on shipper period choices, characteristics, and value of goods moved
2. Specifying and estimating discrete-choice models of shipper period choices
3. Developing and calibrating a simulation model of truck traffic distribution
4. Estimating the distribution of peak and off-peak traffic from simulation model

Overall Project Tasks
1. Final METRANS Project Report
2. Preparing project results for conference presentation
3. Preparing manuscript for submission to a peer-reviewed economics journal

Milestones, Dates:
March 1, 2006 - February 28, 2007

Total Budget:
$65,130

Student Involvement:
One graduate student

Relationship to Other Research Projects:
Related to 06-02; 04-01, and 05-12; part of goods movement and international trade focus area

Technology Transfer Activities:
Project report posted on the website

Potential Benefits of the Project:
Reduced congestion, improved port operations

TRB Keywords:
Congestion pricing

Primary Subject:
4b.4 Transportation planning, economics, and institutional issues

Goals:
4c.2 Mobility

Enabling Research:
4c.6 Human performance and behavior

Modal Orientation:
Highway