407ETR to impose trip toll, hikes some peak tolls, offpeak unchanged

Tolls on the all-electronic 407ETR tollroad in Toronto are being rejigged Feb 1, 2009 to add a per trip charge of 25c (all rates quoted are Canadian dollar presently 82c US) - effectively a seven percent increase in toll rates. They are also increasing per-kilometer peakhour charges slightly. Offpeak toll rates will be unchanged and special video tolling charges are being reduced a bit.

407ETR is now among the largest grossing toll roads in North America.

The new per trip charge of 25c for cars works out to be an average per-km toll of 1.25c/km (2c/mile) since the average trip on the 407 is a 20km (12 miles) and $3.60. This is an average 7% toll increase in per-km terms on the offpeak toll rates of 18c/km (29c/mile).

407ETR peak hour per-km toll rates are being raised slightly and high tolls are being extended geographically westward. West of H400 toll rates for light vehicles will go from 19.25c/km to 19.85c/km (32c/mile) (up 3.1%) and west of H401 they go from 19c/km to 19.85c/km (4.5%). With the new per trip charge the increases are from 19c to an average 21.1c/km (34c/mile) or an increase of 11%, but in the center segment of the pike (H400 to H401) the average increase will be about 10%.

Offpeak tolls keep the same 18c-per-kilometer change but with the per trip charge averaging 1.25c/km being introduced for the first time the average offpeak toll goes up 7%.

As the maps show the peakhour toll zones are being reorganized. At present (called 2008 on map) the central section H401 to H404 has higher peakhour toll rates than the more lightly trafficked ends in yellow.

From Feb 1, 2009 the light zone peak rates apply east of H400 located pretty much due north of the CBD and the high toll rates in peakhours extend all the way from H400 west to the end of the pike at the QEW in Burlington.

Like the Foothill Eastern TR in California 407ETR has one well-connected and heavily trafficked end (the west) and a stub end (the east) with little traffic. Unlike California's FETR, Toronto's toll road looks like getting support for its eastern connections. Radical enviros are thinner on the ground in Canada than in California.

Video premiums being trimmed

The premium for being on the 407 tollroad without a transponder - there is no cash collection - and being "video tolled" (license plate is photographed and toll bill sent in the mail by reference to motor vehicle registry databases) goes down Feb 1 from $3.60/trip to $3.25/trip for light vehicles. On an average 20km trip that video premium still adds a massive 16.25c/km to the average 19.25c/km  for a total offpeak toll rate of 35.5c/km (57c/mile).

Monthly fees for lease of a transponder goes down 2% from $2.55 to $2.50 Feb 1.

407ETR has three vehicle classes: light vehicles, heavy singles, heavy multiples.

Light vehicles are those under 5t (11,020 pd) registered gross weight.

Heavy vehicles are those over 5t registered gross weight.

The heavy single unit or straightbody vehicles are twice the toll rates for cars (light vehicles) and the multiple unit heavies (tractor trailers etc) toll rates are three times the lights.

One difference is that heavy vehicles are legally supposed to only use the 407 pike equipped with a transponder but in fact they apply a $15/trip video toll charge for non-transponder equipped heavies which they say is "temporarily discounted" from $50/trip.

There is a minimum trip toll charge for single unit heavies of $10.50/trip offpeak and $11/trip peak and for multiple unit heavies of $18.60 and $19.50 which stays unchanged Feb 1.

REMINDER: all currency above is Canadian dollar, currently 82c US.

see http://www.407etr.com/about/custserv_fees.asp

Traffic down 8.2% in veh-km in Nov

407ETR is seeing the results of the economic downturn. November 2008 was 183.1m veh-km traveled - 8.2% down on the 199.4m veh-km of Nov 2007. October was down 3.5%. 

Average daily trips in Nov 2008 were 313.6k vs 334.7k Nov 2007. That's 6.3% down. In October trips were almost level pegging in number, suggesting trips are getting shorter on average.

Revenue outlook

The economic downturn is now hitting the Toronto area hard. If things weren't to get much worse the Feb 1 rate increases would probably about offset reduced vehiclae travel and keep revenue about stable, but if the economy goes down further nothing can do that.

COMMENT: The per trip charge makes sense in that short on-&-off trips probably impose costs disproportionate to longer trips. Other changes are just tweaks. 407ETR management seem to make small but frequent changes in their rates, perhaps to see how motorists react - a trial and error approach to getting rates right for the road. Some stretches of the road are now "built out" so they are going to have to rely increasingly in variable pricing to manage traffic and maximize income.

Analyst says the net effect is 7.4% increase in toll rate

Steven Fernandez of Exane BNP Paribas, investment bankers writes that the net effect of all the various adjustments to 407ETR toll charges for Feb 1 is an average increase of 7.4% in rates.

TOLLROADSnews 2009-01-01 ADDITIONS 2009-01-02 11:00, 12:30