The GigReporter

Congestion pricing, additional motor vehicle tolls are set to go into effect in early 2025 in parts of Manhattan. Originally set to go into effect earlier this year, Governor Hochul paused the implementation of the program over concerns the toll amounts were too high, with a planned $15.00 per day toll for entry into the congestion zone. She later allowed congestion pricing to move forward with lowered toll amounts, with a planned start date of January 5.

The new congestion pricing tolls will apply once per day to motor vehicles entering the Congestion Relief Zone, that includes most streets in Manhattan below 60^th Street (roughly coinciding with the lower border of Central Park). The amounts vary based on time and vehicle type; during “peak periods” (5 AM to 9 PM on weekdays, 9 AM to 9 PM on weekends) the toll will be $9.00 for most vehicles, otherwise the toll will be $2.25. This price includes cars up to the size of small vans, with a more expensive tier for single-unit box trucks and an even higher tier for multi-unit trucks. Payments will be collected either through the existing E-ZPass electronic toll collection system, or a Toll by Mail system based on photographs of the vehicle’s license plate, although the latter will include a surcharge.[1]

Logistics brokers should probably expect owner/operators to demand premiums for delivering into lower Manhattan to compensate for the cost of the tolls, or to refuse to make deliveries there at all. On the other hand, many owner/operators already dislike going into Manhattan because of the dense traffic and lack of parking. If the congestion pricing program succeeds in its goal of substantially reducing traffic, there may be more owner/operators willing to make deliveries in downtown Manhattan.

The new tolls could also incentivize some different business models. For example, customers, logistics brokers, and owner/operators may plan to have deliveries performed only outside peak hours to minimize the cost of tolls. (New York is “the city that never sleeps”, after all!) Congestion pricing could also increase the economic attractiveness of last-mile shipping by motorcycles, which are subject to a much less expensive tier of tolls, or bicycles, which avoid them entirely. Two-wheel couriers have always had problems with high insurance costs, but these congestion pricing advantages may be enough to offset that for some segments.  It is time to consider thinking outside the box how to handle these extra costs.

[1] https://new.mta.info/document/131571