Category Archives: Transportation & Logistics

Pico y Placa – Is Washington DC ready to tackle traffic congestion?

Congestion pricing (also known as variable tariff and dynamic pricing) is a mechanism to charge different amounts for traffic at different times.  As a simple example, you may have to pay 2$ for using a road at peak hours, and it may cost you only 1$ (or be free) at non-peak hours.  Washington DC metro uses the same concept, although they have more than two tiers and have the dreaded peak of the peak charge as well.  Airlines and hotels use the same concept, with their prices being computed similarly through a demand and supply mechanism.  Generally speaking, congestion pricing is a good mechanism for passenger traffic, compared to appointment scheduling and network capacity management, which is usually used in freight traffic management systems, for example, NX FTMS.

However, congestion pricing (charging more) does not work, if you are not setup to charge anything at all!  So a different mechanism is used at times – the one to only allow some vehicles on the roads.  This is typically known as road space rationing.  For example, you could choose to allow only blue cars on the road at one day, and the red cars on the road another day.  Oh wait, you can’t actually do that as that appears to be politically motivated.  So, let us try again.  You can try to allow the cars that have the last digit of the license plate numbers odd on the road on one day, and the cars for which the last digit is even on another day.  Then, you can turn those digits and days around as you wish to make sure that the system is fair and not gameable (and you may need to have some provision for vanity plates).

Bogota - Plaza Bolivar - 2012The best example of this that I have come up is in Bogota, where the system is called pico y placa, which combines the peak traffic hour (pico) also with the license plata (placa), although the peak hours have since 2009 been extended to almost the entire day (6 am to 8 pm).  Knowing Bogota’s traffic, I think that is a fair characterization of the peak hour.  The way the system works is that cars with number plates ending in 5, 6, 7 or 8 cannot driving between 6 AM and 8 PM on Mondays.  Last digits for other days are:

  • 9012: Tuesday
  • 3456: Wednesday
  • 7890: Thursday
  • 1234: Friday

There are no restrictions on the weekends.

So, firstly we observe that if you have two cars, one ending in 5 and the other ending in 0, then you have at least one good car every day.  So, the people with means try to have two cars with different number plates.  For that reason, the Bogota pico y placa changes the digits every year.  So, it is theoretically possible that your good combination may not be that good next year.  However, based on my understanding of Bogotá pico y placa, the digits are always in contiguous blocks of 4, so if your two license plates end in 0 and 5, then you are perpetually safe.  If my understanding is correct, then that is a limitation of the system, and the numbers should be mixed up more thoroughly.  To put in perspective though, that limitation is small as only a limited number of people buy two cars to circumvent the system.

Washinton DC - World War II Memorial - 2011 04 02Could pico y placa work in DC?

Granted, we would have to call it peak and plate here, but could the concept work?  For about 8 months of 2011 I participated in ride share program wherein me and my ride share partner would drive during alternate weeks, to take advantage of the HOV restriction on I-66.  The ride share program works as is, and there is even a full slugging system in DC, but if there were more people participating in ride share programs, that would perhaps be easier to find people leaving from and going to same places, and the ride share could really work even better.  Participation would of course be almost mandated by peak and plate in DC.

Although WMATA stopped trying to be price-competitive a very long time ago, it is even possible that due to increased ridership, even the metro fares may come down a little. (For a visual on how high metro fares suppresses ridership which raises fares, consider this.)

After a lengthy preamble, here is a question for you:

[poll id=”5″]

Challenges for Latin American Ports to Lower Their Logistics Costs

At the first session of the day – “El Desafío de los Puertos Latinoamericanos para bajar sus costos logísticos: La Visión de las Autoridades Portuarias” at the 21st congreso latini americano de puertos

Domingo Chinea (Port of Buenaventura, Colombia), Rafael Plaza Perdomo (Port of Esmeraldas, Ecuador) and Valentin Moran (Port of Bahia Blanca, Argentina) present their views on the how the ports can lower their logistics costs and become more competitive. A common thread between their presentations is the cost of the movement of the goods from the port to the hinterland.

What are interesting metrics for measuring competitiveness of ports? (AAPA Congreso Guatemala)

At the 21st congreso latin americano de puertos in beautiful Antigua in Guatemala. The first panel consisting of Robert West (Worley Parsons), Alejandro Couttolenc Villar (Port of Vercruz, Mexico), Franc Pigna (AEGIR) and Kenneth O’Hollaren (Port of Longview, Washington state) certainly seems to agree on the importance of improving port competitiveness. The important question on the table – how do you define (and then measure, and then improve) the competitiveness of a port – what KPIs (metrics) are interesting?

From my work in the various Latin American ports, the land transportation costs are still relatively higher compared to the cost of goods. There are a lot of opportunities for improving the IT infrastructure and processes for trucks to load and unload the goods at the ports. Many times there is not enough visibility of the trucking operations to allow the terminals to plan ahead for their arrival, and that leads to unnecessary congestion inside and around the terminals. Sometimes the trucks simply queue up outside, and sometimes the trucks simply linger outside after doing a drop off, hoping to pick up another load. One KPI that is sometimes used is the “turn time”, which tries to measure the total time that a truck spends inside the port (or the terminal) in order to do an operation. Of course, the turn time depends on the port and also on the operation, but the trend on that KPI value with time can at least provide us with if the efficiency with respect to trucking operations is improving or not.

AAPA Guetamala Puertos - LongViewFranc Pigna (AEGIR) focused significantly on the implications of the Panama canal expansion, and with the knowledge that only one port on the US East Coast that is currently ready for very large vessels (and that port is Norfolk, as you all know), the question becomes if the situation will change for a lot of non US Atlantic ports, such as Cartagena, Kingston, etc.

Kenneth O’Hollaren focused his presentation on opportunities of bulk exports from Latin America to North America. There are significant bulk supply chains currently between these two regions, and some of my past work has focused on that.