US infrastructure investment: How road and toll operators can maximise revenue

July 31, 2022

The US highway system dates back to the 1950s, and 70years on it is requiring record amounts of investment so it can handle a growing population and sustain economic growth. This renewed focus on aging infrastructure will require specific investment in smart technology solutions, including hardware and software, which addresses key areas such as safety, congestion, sustainability, and revenue maximisation.

With approximately 4 million miles of roadways across the country, the US has the biggest road network in the world, exceeding that ofIndia and China. Over 200,000 miles of this make up the National Highway System(NHS), which plays a key strategic role in the US economy and includes the entireInterstate system.

Highways in particular are a critical national asset that contributes to economic activity throughout the country by transporting both goods and people that are needed across a range of industries, and even for national security.

A massive trillion dollar investment

The Biden administration has prioritised infrastructure modernisation and in 2021 the President signed the Bipartisan Infrastructure Law (BIL), which is a $1 trillion investment package for areas including rebuilding America’s “crumbling roads and bridges”.

As part of the BIL, State Department of Transports (DoTs)and Metropolitical Planning Organizations (MPOs) can also tap into more than$27 billion of federal funding to help meet greenhouse gas (GHG) emission targets.

While infrastructure investment will see traditional construction works taking place, it will also see a rise in the use of smart technologies that will leverage areas such as 5G network-enabled sensors, Big Data, andAI-powered data analytics and fusion software.

The importance of road travel in the US

The US population predominantly uses cars for personal travel rather than public transport, which places a significant burden on the country’s road infrastructure. Over 10 billion tonnes of freight is also transported by trucks each year on US roads.

This presents challenges for both government and private sector organisations that manage road networks, especially as the nation’s population grows and as a result so does car ownership and the amount of freight shipped.  And as more road networks generate revenue through tolls, there are additional challenges for operators when it comes to maximising revenue to meet their commercial goals.

Much of the US highway system can be traced back to the1950s, when the US population was half of what it is today. The population boom in the years since has placed significant strain on US road infrastructure, resulting in unprecedented congestion on many of the nation’s roads and resultant rise inGHG emissions and road deaths. Last year saw a 10.5%increase in US fatalities that resulted from a motor vehicle crash.

Increasing numbers of stakeholders

Owing to the sheer size of the US, its road network is a hugely complex space with many different stakeholders, both government and private, that have a role in planning, design, construction, maintenance and operations. While complex, the proliferation of data is allowing these stake holders to better understand user behaviour and the decisions made as to why their roads are used versus competing routes, as we explored in our last blog here.

Government plays a key role in US road networks with theFederal Highways Administration (FHWA) – an agency within the US Department ofTransport (DOT) – working with both state and local governments in areas such as the design, construction and maintenance of the US highway system.

However, like other countries around the globe, US authorities have turned to private companies to inject capital into state and local highways, resulting in privately-run roads that collect tolls (fixed and variable) for revenue generation, which can be used for debt repayment or ongoing road maintenance.

According to the InternationalBridge Tunnel Turnpike Association (IBTTA) – a worldwide association for toll road operators – there are over 5,000 miles of toll roads in the US withAmericans making more than 5 billion tolled trips per year. Toll roads are “an essential part of the toolbox of transportation funding options”, according to the IBTTA, especially as the purchasing power of the federal gas tax has reduced over the years.

Most toll roads now collect their toll electronically and the fee itself can be fixed according to vehicle category, occupancy or time of day; it can also be changed in real-time to match travel conditions. The latter can include express lanes that aim to ease congestion and speed up journey times, but can only be used if a driver pays a toll charge.  

Making road operations as efficient and smart as possible

Software solutions, such as Lanternn by Valerann, will be key to the next generation of US highways, including toll concessions.

More and more data will be generated and collected by a range of Internet-of-Things (IoT)-enabled sensors on a highway – including cameras, radar and weather sensors – as well as generated by data from connected vehicles (including vehicle-to-vehicle communications) and apps includingGoogle Maps and Waze.

As these data sources are fused using AI into one operational picture for a command centre, then better and faster decisions can be made by operators. The use of advanced machine learning algorithms also means that events can be predicted before they happen.

By leveraging this wealth of data, road operators will have a much clearer and accurate real-time view of their road’s performance in terms of traffic flows, incidents and journey times. This will also empower toll operators with even more data to find efficiencies in their operations in order to maximise profits, as well as understand their market share when compared with other roads and modes of transport.

Conclusion

We are in the midst of an infrastructure revolution in theUS, which hasn’t been seen since legislation was signed for the US InterstateHighway System nearly 70 years ago. Valerann is well placed to meet the US government’s ambitious infrastructure goals and we are now working closely with a number of US partners to implement our solutions.

It’s also safe to say that many of the challenges faced by road operators in the US are present in other global regions – such as Europe andSouth America – particularly where there are toll roads and the need to maximise revenue.  

Intelligent transport solutions such as Lanternn by Valerann are set to revolutionise the road operations market globally, and we look forward to rolling out our AI-enabled solutions across the US for both government and private road operators.