Highway Reservation System Design and Its Application to Freight Transportation

Congestion and safety associated with freight trucks are key issues that arise in the context of highway transportation, especially in the heavily-traveled commercial corridors. To address these issues, truck-only lanes for freight trucks have been proposed as a solution to improve the productivity and reduce congestion, safety hazards and emissions. Truck-only lanes combined with a reservation system can potentially enable efficient operations and reliable demand management to guarantee high quality of service. In this regard, a reservation system with a real options approach can address key issues associated with the user-pays principle (i.e., the beneficiaries of truck-only lanes pay the toll) and fair reservation fees for both highway operators and the users for truck-only lanes. This research seeks to develop an option-pricing mechanism consistent with the highway system’s operation and to formulate a closed-form pricing-function on reservation options on truck-only lanes to guarantee a threshold level of service, given the vulnerability associated with system management failure.