Brief

Kentucky toll enforcement plans show costs of infrastructure fall on supply chains

Dive Brief:

  • Kentucky's new tolls on three Ohio River bridges threatens to raise rates along the supply chain, according to a recent WRDB.com report.
  • The tolls are approximately $10 to $12 for larger trucks traversing Interstate 65  via the Kennedy and Lincoln Bridges, as well as the new Lewis and Clark Bridge, which could result in up to $140,000 in operating costs for Usher Transport and a 15 percent to 18 percent rate increase for the company's customers. 
  • In addition, Kentucky enacted a plan wherein truck drivers delinquent in their toll bill payments can be taken off the road by law enforcement, although questions remain on their capacity to enforce the rule, specially for out-of-state drivers. 

Dive Insight:

Kentucky's new tolls and the steps it is taking to enforce payment of them show just how hefty a price transportation providers can pay for maintaining the nation's infrastructure.

A $10 to $12 toll may not seem like much, but when supply chains rely on frequent transit across certain routes, there is no winning solution for the payers. At one end, companies like Usher Transport could absorb the cost and spread it to its own clients, or at the other, universally extend travel times to avoid tolls altogether.

Of course, given a wide deficit between infrastructure needs and funding, tolls are necessary. But opponents argue local businesses and transporters suffer most, despite the large amount of foreign transit. It is similar to raising parking rates in a city to pay for repairing a highway most widely used by non-residents to traverse it.

That said, proponents note high benefits for the community. Predictions suggest that the Ohio River Bridges project should generate $27.3 billion in personal income for the area, plus approximately 17,796 jobs per year, beginning from the start of construction in 2012 to the year 2042, as determined by an economic impact study of the project by the Indiana Department of Transportation and the Finance Authority.

Of course, there's also the convenience factor. Thanks to the new bridges, drivers can potentially save more than 30 minutes, for which many are willing to pay a fee. For those who may struggle with the added costs, Indiana Senator Ron Grooms has also promised to sponsor two bills meant to ease the burden for payers in Clark and Floyd counties, which are likely to be the most affected.

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Filed Under: Logistics Regulation
Top image credit: Oregon DOT