Tolling is generally an amount, or a fee paid to access any road, bridge, or tunnel and the revenue generated by this is utilized for maintenance, construction, and/or other such operations
Toll Business can be simply understood as a way to deal with transportation challenges and provides positive impact on freight transport in several ways. The toll in many ways, has been benefiting the society without placing an excruciating financial burden on the entire transport system. The advantages the toll business offer include improved transport efficiency, increased revenue for the public budget and reduced external costs of road vehicles.
There is numerous research that have time and again proved that tolls can positively impact transportation in several ways. Below are the few examples –
- Improved Transport Efficiency – With the road tolls being introduced, empty headings have been seen to decline. Additionally, tolls are also helping in reducing the vehicle km required for transportation as trucks are improving loading rates because of the pricing pressure.
- Affordable choice, without impacting consumers prices – In most of the industries the range of transportation cost is between 1% to 5% of the total production cost which is comparatively low, and the accumulated statistics will not show any significant effect.
- Significant contributions to transport sector funding comes from the toll revenue – This is true that money that comes from toll revenue is one of the major sources of funding that the transport sector earns.
How Tolling business can help in reducing the worldwide challenge of traffic Congestion
The increased number of vehicles on road are certainly the cause of massive traffic jams during the peak hours in many parts of the world. Managing the traffic congestion problem on a high scale would not only be sign of relief to the economies of various countries across the globe but, this would also be helpful for sustained productivity and competitiveness.
A report by UK government suggests that congestion may cost the economy of England £22 B a year in lost time by in 2015. The U.S Transportation Institute said in 2011 that cost of congestion is more than $120 billion, nearly $820 for every commuter in the U.S. World’s record traffic jam in China, Hebei province, was 110 km long during 12 days in August 2010.
There are three main purposes of road pricing and tolling among these tolling is utilized to generate revenues. The other two important reasons include congestion or value pricing which helps in managing demand, and environmental pricing to reduce environmental impacts.
E-Tolling System – What is E-tolling and what are its advantages:
E-tolling or Electronic tolling collection (ETC) is a wireless means of automatically collecting the usage fee or toll charges from the vehicles using toll roads, HOV lanes, toll bridges, and toll tunnels etc. without requiring any action or stopping by the driver. This not only is time saving but also keeps the entire process of toll collection transparent. Electronic tolling is also cheaper when compared to staffed toll booth as it does not require manual processing and it helps in reducing transaction costs for both government and private road owners.
Advantages of E- Tolling –
- No stopping of vehicles at a toll booth
- Time saving
- Reduced traffic congestion problem
- Can save gallons of gasoline every year
- Efficient, safe, and secure
Evolution of Business Models and Non-toll Revenue –
Toll pricing models have been evolved the most in the past few years. With the evolution and several new innovations, it has become more complex with customer demanding loyalty benefits, discounts, and vouchers. Specially the customers who own large number of vehicles, deal with a lot of such task forces and have to take similar journeys several times.
Tolling charges vary depending on what time of the day the trip was taken. How many travelers are there in a car, total distance covered or even customer’s residence. The payment itself could be prepaid (wallet based), postpaid (Bank settlement) or hybrid model. Also, taxes could depend on type of vehicles to subsidize electrical vehicles.
Besides the pricing and billing complexities in Toll itself, tolling companies have lot of avenues to grow non-toll business and get additional revenue. The same vehicle cards which are being used for Toll could be used for paying for fuel, parking, E-vehicle charging, hiring bikes and car wash services.
Challenges Faced by Tolling Business
- Road transport accounts for around 16% of global man-made CO2 emissions. Also, the number of crashes subsequently increases due to congested roads.
- Tolling business deals with a lot of administrative tasks and paperwork which becomes quite a headache if not managed with the help of proper dedicated solution
- Juggling between too many transponders and navigating the customer service maze
Role of SAP BRIM Solution in Toll Collecting –
Billing and Revenue Innovation Management (BRIM) solution under the hood comprises of various different solution components which are pre-integrated in a suite. The Customer, Products Master and Order, Contract Management is handled in Subscription Order Management (SOM) component that allows new customers to register, along with their e-tag information. On the tolling plaza where the vehicle information is actually captured by tolling operational systems which will then pass that on to Convergent Mediation which allows data massaging and validation.
SAP BRIM Platform can orchestrate information to downstream systems or can couple separate events together like vehicle entry and exist events received from two different toll points on the same route. Convergent charging takes care of the complex rating and charging logic and find out whom to charge and how much to charge for the journey. Finally, Convergent Invoicing can handle billing, invoicing and settlements processes with banks and postings to subledgers.
Tolling Systems – Open versus Closed
In the closed tolling system, the vehicle is tracked both at entry and exit points. While in the open system toll plazas or charging booths are charging points for the applicable road section.
The customer journey begins right from the moment when he/she either purchases a card or e-tag from the store and registers it along with the vehicle registration details. Customer can then top-up his card/e-tag using banking services like bank mobile app or ATM. Now when the customer makes a toll-applicable journey, based on closed or open toll system the toll plaza will record the details or his card/e-tag verifying them against the vehicle plate number to detect any fraud.
These details will then be fed through Convergent Mediation where there will be further validations like multiple journeys on the same path in very short amount of time or improbable time difference between entry and exit timestamps recorded. Once the event data is validated it is rated by the Charging system to create billing items (records) of transactions. These transaction records/items are aggregated to be shared with customer and the bank for any applicable settlements later. To minimize credit exposure it may very well happen that the entry point registers the vehicle entry and reserve or block some amount on customers e-tag account and at the exit point the charges are calculated and the e-tag balance is either deducted immediately or send to bank for settlements.
Advantages of Using SAP BRIM –
- Simplified Customer interactions
- Meeting real time expectations
- Real time insight for true customer 360-degree view
- Increase Transparency and efficiency
- Real time Execution for context sensitive offerings
- Improved Customer engagement
- Innovative pricing and Bundles
- Consolidated Billing to manage credit and collection efficiently
- Handles hybrid payments
While now you already know what role SAP BRIM plays in managing toll business efficiently than ever, it also important to get a holistic view of some other advancements offered by SAP solutions to its customers and how Acuiti Labs could be the most suitable choice for you –
Business Responsiveness – SAP BRIM offers Innovative pricing model, charging and billing models and also opens up smart revenue stream that are personalized for your B2B offerings and you get a chance to know your customers better and thus can offer customized solutions to them.
Efficient Revenue Management – SAP Solutions could be the best choice when you are looking forward to increase customer satisfaction and improve financial performance with a converged view of customer account, receivables, payables, and disputes.
Flexibility of Deployment – Get a flexibility of deploying a complete, integrated customer care and next gen billing system with SAP Billing Solutions or choose to deploy in smaller implantable steps for targeted incremental value. You get the freedom of doing it the way you wish to choose!
How Acuiti Labs can help with the digital transformation of the tolling businesses?
Acuiti Labs’ SAP BRIM solution can efficiently handle the issues that toll businesses are currently facing. We can manage the toll Industry pain points and also support potential future grow avenues. Contact us for the digital transformation of your tolling industry today!