Office of Operations Freight Management and Operations
Table of Contents

FHWA Operations Support – Port Peak Pricing Program Evaluation

6.0 Conclusions

Some of the major highlights of the information presented in the report on port peak pricing program evaluation are summarized below.

6.1 Lessons Learned from the PierPASS OffPeak Program

Some important lessons learned from the PierPASS OffPeak program could be applied to future programs to avoid some of the problems experienced with the OffPeak program:

  • Application of Appointment Systems – Appointment systems for pick-up and delivery of containers by drayage truck drivers could significantly improve current OffPeak program operating conditions at the terminals, as well as achieve congestion reduction benefits on the I‑710 freeway. With the use of appointment systems, the queuing of trucks at the gates before the start of the night off-peak shift can be significantly reduced. Appointment systems can also be used to reduce the concentration of trucking activity before the 10:00 p.m. time period, and achieve optimal labor utilization by appointing container pick-up/delivery activity in the 11:00 p.m. to 3:00 a.m. time period.
  • Application of Variable Pricing – Under the current framework of the OffPeak program, the TMF is assessed for containers moving through the gates for any time period within the day shift of 8:00 a.m. to 5:00 p.m. and does not vary by time period. In order to improve the performance of the program in terms of diverting additional truck traffic from the peak commute time periods (morning and evening) and achieving associated congestion reduction benefits, a variable pricing scheme could be a potential solution. This solution would involve assessing an increased fee for pick up and delivery of containers for certain specific time periods during the day time shift (8:00 a.m. to 5:00 p.m.) based on information regarding which container pick-up/delivery time windows at the terminals typically correspond to peak commute time periods along the major corridors providing access to the port(s).

6.2 Key Factors to be Considered in Evaluating the Applicability/Feasibility of Port Peak Pricing Programs?

The key factors that need to be considered in evaluating the applicability and feasibility of port peak pricing programs can be broadly categorized into relevance and success factors. Relevance factors are associated with conditions in and around ports that make peak pricing and extended gate operations programs relevant for implementation, while success factors represent conditions in and around ports that would impact the ability of a peak pricing program in meeting its intended objectives. Based on the research conducted in Tasks 1 and 2 of the study, the following relevance and success factors should be considered while evaluating the applicability and feasibility of peak pricing programs at specific ports:

  • Relevance Factors: 
    • Terminal and Highway Congestion;
    • Air Quality/Environmental Issues; and
    • Community Issues.
  • Success Factors:
    • Regulatory Environment;
    • Market Characteristics; and
    • Interport Competitiveness.

6.3 Role of the Federal Government in Port Peak Pricing Programs

Potential Federal government roles in port peak pricing programs:

  • Provide grants to state (and local) governments as part of an expanded VPP program to pursue port peak pricing programs at ports in their jurisdiction.
  • Develop evaluation guidelines for state (and local) governments to use that include factors to consider in evaluating port peak pricing programs, port peak pricing governance structures and how to ensure maximization of public and private sector benefits.

6.4 Incorporating Port Peak Pricing Programs within Existing Federal Congestion Pricing Programs

FHWA’s Value Pricing Pilot (VPP) program, which provides grants to state (and local) governments to establish, maintain, and monitor value pricing pilot programs can be expanded to encompass peak pricing at ports as strategies to mitigate congestion. Since the existing structure of the VPP program provides grants for value pricing programs to mitigate highway congestion, port peak pricing programs could already be eligible for these grants if they can demonstrate significant congestion reduction benefits on surrounding highways. The program could be designed to ensure that States receive grants pursuant to the commitment that they consider port peak pricing strategies as key measures to meet their objectives to reduce congestion (both highway and port terminal) through value pricing.

6.5 Port Peak Pricing Program Evaluation Guidelines

Federal guidelines on how to evaluate the potential for peak pricing programs at ports in their jurisdiction, as well as apply the grants to pursue such programs if determined applicable and feasible are discussed in this section. Some specific elements to include in the guidelines in this regard are discussed below:

  • The public entity receiving the grants could use them to conduct planning/feasibility studies to assess the potential for implementation of peak pricing programs at ports in its jurisdiction.
  • If a peak pricing program is deemed applicable and feasible for implementation, the public entity, pursuant to its commitment as part of receiving the grant, would be responsible for working with the ports and private sector entities in implementing a peak pricing program at the port.
  • Since pilot programs, by definition, only operate for a limited time period, the guidelines would discuss the optimal use of these funds depending on the institutional arrangements at the port (OO, Landlord, etc.). For example, in the case of Landlord ports, the funds could be used to cover the costs incurred by MTOs in operating extended gates, while n the case of OO ports, the funds could be used to cover the administrative and operational costs associated with the pilot program.
  • The guidelines would add potential collection and usage of fee revenue.

6.6 Transitioning to Sustainable Port Peak Pricing Programs

If pilot port pricing programs are observed to be successful in meeting their intended objectives, they could serve as platforms for longer term implementation of port peak pricing programs that do not have to rely on Federal grants. In the case of Landlord ports, the success of a pilot program could encourage the MTOs to develop a private sector solution, like the PierPASS OffPeak program. In the case of OO ports, it could lead to a longer term pricing program wherein the fee revenues are used to cover the costs of program administration and operations, and additional revenues are placed in a trust fund for port congestion reduction projects.

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