Mark F. MurielloMark F. MurielloAssistant DirectorAssistant Director

Tunnels, Bridges & TerminalsTunnels, Bridges & Terminals

Value Toll Pricing atValue Toll Pricing atThe Port Authority of NY & NJThe Port Authority of NY & NJ

Value Pricing Value Pricing Regional WorkshopRegional Workshop

Washington, D.C.Washington, D.C.June 4, 2003June 4, 2003

The Port Authority of NY The Port Authority of NY & NJ& NJ

Annual Cost $10 BillionAnnual Cost $10 Billion

Peak Volumes at Key Links Exceed Capacity

By 2020 Expect Hours of Delay Up by 60%By 2020 Expect Hours of Delay Up by 60%

Heightened Region-wide Air Quality Concerns

Overburdened Freight Routes Hurt Competitiveness

Congestion: A Sense of Congestion: A Sense of UrgencyUrgency

Region’s Prosperity at Stake Region’s Prosperity at Stake

DELAYREVENU

E

SERVICE

CONGESTION

DEMAND

COST

STATE of REPAIR

CAPACITY

MARKET POSITION

JOBS

ENVIRONMENTAL IMPACT

TB&T TB&T - - Preserve and Stretch Vehicular Capacity Preserve and Stretch Vehicular Capacity

– Intelligent Transportation Systems TechnologyIntelligent Transportation Systems Technology

– Staten Island Bridges ModernizationStaten Island Bridges Modernization

– Asset Replacement and State-of-Good-Repair Asset Replacement and State-of-Good-Repair

PATH - - Enhance Reliability and Efficiency Enhance Reliability and Efficiency

– New, State-of-the-Art Passenger CarsNew, State-of-the-Art Passenger Cars

– Updated Signal System and Automatic Train ControlUpdated Signal System and Automatic Train Control

– Continued Station and Service ImprovementsContinued Station and Service Improvements

Investing in Interstate Investing in Interstate MobilityMobility

Aviation Aviation - - Airport System RevitalizationAirport System Revitalization

– Rail Access Projects - AirTrain, EWR Monorail, NECRail Access Projects - AirTrain, EWR Monorail, NEC

– Approach and Terminal Roadway ImprovementsApproach and Terminal Roadway Improvements

– Parking Lot Expansion and E-ZPass Fee CollectionParking Lot Expansion and E-ZPass Fee Collection

Port - - Deep Water (Hub) Port Capability Deep Water (Hub) Port Capability

– Intermodal Terminal Redevelopment and ExpansionIntermodal Terminal Redevelopment and Expansion

– Access Roadway Improvements Access Roadway Improvements

– ExpressRail ExpansionExpressRail Expansion

Investing in Gateway Investing in Gateway MobilityMobility

Ensure financial self-sufficiency for Ensure financial self-sufficiency for the Interstate Transportation Network.the Interstate Transportation Network.

The Overall GoalThe Overall Goal

-900

-800

-700

-600

-500

-400

-300

-200

-100

0

Inte

rsta

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etw

ork

Net

In

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e ($

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ns)

Inte

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In

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e ($

mil

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ns)

ActualsActuals ProjectionsProjections

Pricing Policy ObjectivesPricing Policy ObjectivesEncourage shifts to off-peak travel Encourage shifts to off-peak travel to address peak-period congestion.to address peak-period congestion.

Encourage mass transit by Encourage mass transit by differentiating pricing in corridors differentiating pricing in corridors with mass transit alternatives.with mass transit alternatives.

Eliminate frequency-Eliminate frequency-based toll discounts to based toll discounts to support traffic support traffic management objectives. management objectives.

Pricing Policy ObjectivesPricing Policy Objectives

Increase the E-ZPass market Increase the E-ZPass market share at Port Authority crossings.share at Port Authority crossings.

Create pricing incentives targeted Create pricing incentives targeted toward commercial traffic toward commercial traffic management.management.

Establish toll rates that are easily Establish toll rates that are easily implemented and collected.implemented and collected.

Port Authority Port Authority Passenger Car Toll Passenger Car Toll HistoryHistory

1970 1970 $ 1.00$ 1.0019751975 $ 1.50$ 1.5019841984 $ 2.00$ 2.0019871987 $ 3.00$ 3.0019911991 $ 4.00$ 4.00

New Pricing New Pricing ApproachApproach

High cash toll for all crossings.High cash toll for all crossings.

Deep E-ZPass discount for autos in Deep E-ZPass discount for autos in off-peak periods.off-peak periods.

Reduced E-ZPass discount for autos Reduced E-ZPass discount for autos during peak periods. during peak periods.

Weekdays: 6 - 9 a.m. and 4 - 7 p.m.Weekdays: 6 - 9 a.m. and 4 - 7 p.m. Weekends: 12 Noon - 8 p.m.Weekends: 12 Noon - 8 p.m. Deep discounts for truck trips in weekday Deep discounts for truck trips in weekday

overnight period (Midnt. - 6 a.m.)overnight period (Midnt. - 6 a.m.)

Auto Toll RatesAuto Toll Rates

CASH CASH All HoursAll Hours

PeakPeakHoursHours

Off-Off-PeakPeakHoursHours

New Rate New Rate $4.00 $5.00 $4.00 $5.00 $6.00$6.00

Old RateOld Rate $3.60 $3.60 $3.60 $3.60 $4.00$4.00

Carpool Program:Carpool Program: $1.00 per trip for vehicles with E-ZPass and $1.00 per trip for vehicles with E-ZPass and 3 or more people verified in vehicle.3 or more people verified in vehicle.

SI Bridge Program:SI Bridge Program: $50 for 20 Trips in a 35-day period at the $50 for 20 Trips in a 35-day period at the Goethals and Bayonne Bridges and Goethals and Bayonne Bridges and Outerbridge Crossing with E-ZPass.Outerbridge Crossing with E-ZPass.

Discount Programs Discount Programs (available all hours with special registration through E-ZPass account)(available all hours with special registration through E-ZPass account)

Commercial Toll Rates:Commercial Toll Rates:

OvernightOvernightHoursHours

PeakPeakHoursHours

Off-Off-PeakPeakHoursHours

CASH CASH All HoursAll Hours

New Rate $ 5.00 $ 6.00 $ 3.50New Rate $ 5.00 $ 6.00 $ 3.50 $ 6.00 $ 6.00 (per axle)(per axle)

Old Rate Old Rate $ 3.60 $ 3.60 $ 3.60$ 3.60 $ 3.60 $ 3.60 $ 4.00 $ 4.00 (per axle)(per axle)

Truck TollsTruck Tolls

Stakeholder OutreachStakeholder Outreach

Elected Elected Officials Officials & Community & Community GroupsGroups

Business Business & Industry & Industry GroupsGroups

Special InterestsSpecial InterestsTransportationTransportationInterestsInterests

Public Communication PlanPublic Communication Plan

Wide-ranging customer Wide-ranging customer communications program communications program and materials.and materials.

Web SiteWeb Site Toll-free Telephone Information Toll-free Telephone Information Direct MailDirect Mail Advertisements Advertisements In-Lane MaterialsIn-Lane Materials Toll Plaza HandoutsToll Plaza Handouts

The Importance of the MediaThe Importance of the MediaThe importance of using The importance of using the media effectively the media effectively cannot be overstated.cannot be overstated.

Newspapers, radio, and Newspapers, radio, and television stories and interviews:television stories and interviews: Ensuring the facts are presented Ensuring the facts are presented

accurately.accurately. Keeping the program in the public Keeping the program in the public

eye.eye. Informing the public about the Informing the public about the

needs and objectives.needs and objectives.

The New Jersey Television Network

Favorable Newspaper Favorable Newspaper EditorialsEditorials

November 18, 2000

The Cost of Crossing the Hudson… Price hikes are inherently painful, but these are worth applauding, if not demanding, as a matter of fairness and as a means to fight congestion.

Outreach to the editorial Outreach to the editorial boards of the major boards of the major regional newspapers regional newspapers paid tremendous paid tremendous benefits.benefits.

January 29, 2001

As good as could be… The increases across the board are manageable, and it’s reasonable that after a 10-year hiatus, a toll increase was due.

January 18, 2001

The Case for Hikes… (The Port Authority) has devised a rate change designed to prevent a web of traffic jams from strangling bistate commerce.

Most effective means of Most effective means of educating the public and educating the public and shaping opinion.shaping opinion.

Toll RevenueToll Revenue

== $$ Toll $$ Toll RevenueRevenue

XX

Avg. TollAvg. Toll

VolumeVolume

The Static The Static Pricing YearsPricing Years

rr22

Plaza ProjectionsVehicle Type

Regional

Economic

Variables

Weekday

Type

Vehicle

Occupancy

Price

Elasticity

E-ZPass Shares

Temporal

Traffic

Distributio

n

Time

of Day

Scenario Testing

Risk

Assessment

The Value The Value Pricing EraPricing Era

Model based on price elasticities derived from mid-1990s Model based on price elasticities derived from mid-1990s research.research.

E-ZPass participation estimated through price trade-offs.E-ZPass participation estimated through price trade-offs.

Incremental Revenue Incremental Revenue ProjectionsProjectionsIncremental Annual Revenue Projection = $150 million. Incremental Annual Revenue Projection = $150 million.

E-ZPass market share projected was approximately 4% E-ZPass market share projected was approximately 4% greater than actual experience.greater than actual experience.

Growth in E-ZPass transactions realized Growth in E-ZPass transactions realized more slowly.more slowly.

Revenue generation greater than expected.Revenue generation greater than expected.

Toll Revenue ComparisonsToll Revenue Comparisons

535.0

670.0

698.4

542.0

662.4

704.2

$400

$450

$500

$550

$600

$650

$700

$750

2000 2001 2002

Toll Revenue (in $ millions)Toll Revenue (in $ millions)

Plan Actual

Actual PlanPlan Actual

Future Revenue Future Revenue EnhancementEnhancement

Value Pricing:Value Pricing:

Current toll structure provides authority to Current toll structure provides authority to change peak and off-peak hours.change peak and off-peak hours.

Future strategies to adjust pricing in Future strategies to adjust pricing in smaller increments.smaller increments.

Time of DayTime of Day Travel CorridorTravel Corridor Vehicle TypeVehicle Type Managed Roadway Managed Roadway

Potentially less complicated to Potentially less complicated to advance.advance.

Opportunity for smoother Opportunity for smoother revenue infusion to sustain revenue infusion to sustain interstate transportation interstate transportation network.network.

Regional Regional CoordinationCoordination

Coordinated hours for maximum impact.Coordinated hours for maximum impact. Jointly targeted market segments (auto, trucks) to Jointly targeted market segments (auto, trucks) to

manage demand.manage demand. Coordinated E-ZPass Customer Service statements to Coordinated E-ZPass Customer Service statements to

encourage behavioral change.encourage behavioral change.

Value Pricing:Value Pricing:

Regional coordination of pricing in the future Regional coordination of pricing in the future will ensure optimal traffic management benefits.will ensure optimal traffic management benefits.

Roadway Pricing andRoadway Pricing andCorridor Corridor ManagementManagement

Relationships exist and Relationships exist and benefits will be realized.benefits will be realized.

RoadwayPricing

TransitCapacity &Services

New Technology& Efficiency

RoadwayCapacitySolutions

IntermodalConnections

Only one piece of a Only one piece of a much larger puzzle.much larger puzzle.

Mark F. MurielloMark F. MurielloAssistant DirectorAssistant Director

Tunnels, Bridges & TerminalsTunnels, Bridges & Terminals

Value Toll Pricing atValue Toll Pricing atThe Port Authority of NY & NJThe Port Authority of NY & NJ

Value Pricing Value Pricing Regional WorkshopRegional Workshop

Washington, D.C.Washington, D.C.June 4, 2003June 4, 2003

The Initial The Initial ExperienceExperienceEncourage shifts to less congested periods.Encourage shifts to less congested periods.

Value Pricing:Value Pricing:

0%

5%

10%

15%

20%

25%

5 - 6 AM 6 - 7 AM 7 - 8 AM 8 - 9 AM 9 - 10 AM

2000

2001

2002

2003

5-10

AM

Pct

g.

Tra

ffic

Dis

trib

uti

on

5-10

AM

Pct

g.

Tra

ffic

Dis

trib

uti

on

* Does Not Include Holland Tunnel* Does Not Include Holland Tunnel

22ndnd Qtr Qtr

The Early The Early ExperienceExperienceEncourage shifts to less congested periods.Encourage shifts to less congested periods.

Value Pricing:Value Pricing:

13.0%

11.1%

12.4%

13.7%

12,976

14,056

12,981

11,714

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%

2Q00 2Q01 2Q02 2Q0310,500

11,000

11,500

12,000

12,500

13,000

13,500

14,000

14,500

% of Peak Volume

5-10 AM Pctg. Traffic Distribution5-10 AM Pctg. Traffic Distribution

5-6 AM Total Traffic5-6 AM Total Traffic

The Initial The Initial ExperienceExperienceEncourage shifts to less congested periods.Encourage shifts to less congested periods.

Value Pricing:Value Pricing:

23.1%23.8%

23.4%23.2%

24,435 23,817 23,08725,020

17.0%

18.0%

19.0%

20.0%

21.0%

22.0%

23.0%

24.0%

25.0%

2Q00 2Q01 2Q02 2Q0317,000

18,000

19,000

20,000

21,000

22,000

23,000

24,000

25,000

26,000

% of Peak Volume

5-10 AM Pctg. Traffic Distribution5-10 AM Pctg. Traffic Distribution

6-7 AM Total Traffic6-7 AM Total Traffic

The Initial The Initial ExperienceExperienceEncourage shifts to less congested periods.Encourage shifts to less congested periods.

Value Pricing:Value Pricing:

5-10 AM Pctg. Traffic Distribution5-10 AM Pctg. Traffic Distribution

6-7 AM Total Traffic6-7 AM Total Traffic5-6 AM Total Traffic5-6 AM Total Traffic

13.0%

11.1%

12.4%

13.7%

12,976

14,056

12,981

11,714

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%

2Q00 2Q01 2Q02 2Q0310,500

11,000

11,500

12,000

12,500

13,000

13,500

14,000

14,500

% of Peak Volume

23.1%23.8%

23.4%23.2%

24,435 23,817 23,08725,020

17.0%

18.0%

19.0%

20.0%

21.0%

22.0%

23.0%

24.0%

25.0%

2Q00 2Q01 2Q02 2Q0317,000

18,000

19,000

20,000

21,000

22,000

23,000

24,000

25,000

26,000

% of Peak Volume

The Initial The Initial ExperienceExperienceEncourage shifts to less congested periods.Encourage shifts to less congested periods.

Value Pricing:Value Pricing:

0%

5%

10%

15%

20%

25%

3 - 4 PM 4 - 5 PM 5 - 6 PM 6 - 7 PM 7 - 8 PM

2000

2001

2002

2003

3-8

PM

Pct

g.

Tra

ffic

Dis

trib

uti

on

3-8

PM

Pct

g.

Tra

ffic

Dis

trib

uti

on

* Includes Holland Tunnel* Includes Holland Tunnel

22ndnd Qtr Qtr

The Initial The Initial ExperienceExperienceIncrease E-ZPass market share at PA crossings.Increase E-ZPass market share at PA crossings.

Value Pricing:Value Pricing:

56%

58%

60%

62%

64%

66%

68%

70%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

AutosAutos

TrucksTrucks

Wee

kday

E-Z

Pas

s M

arke

t S

har

eW

eekd

ay E

-ZP

ass

Mar

ket

Sh

are

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