Fleet Management News & Business Info | Commercial Carrier Journal
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P resident Obama has hinted at a new round of fuel efficiency standards and emissions reductions for commercial trucks in his Climate Action Plan last summer and most recently in his State of the Union ad- dress in January. On Feb. 18, he delivered on that promise by sidestepping Congress and signing an executive order requiring the Environmental Protection Agency and the Department of Transportation to create a rule by March 2015 to further tighten the already tightening screws on truck performance, although no specifics were an- nounced. The rule would go into effect a year later. The first rule that came out in 2011 impacts 2014-2018 model-year trucks. According to the White House at the time, the new standards were expected to reduce oil consumption by 530 million barrels and save the trucking industry $50 billion over the lives of the vehicles covered by the rule. That rule took effect Jan. 1. Engine manufacturers and OEMs immediately set to work on meeting those new rules, and the fruits of their labors are evidenced on a regular basis 2½ years later. For example, Cummins and Peterbilt announced its SuperTruck program partnership yielded 10.7 mpg in fully loaded real- world driving conditions on the heels of the president's address last month. Freightliner's Cascadia Evolution has shown great promise in fuel economy improvements in cross-country demonstrations, and Volvo and Mack's push toward vertically integrated trucks with proprietary engines and transmissions also have yielded big benefits in fuel economy. And so the march toward meeting stringent fuel econ- omy and lower emissions standards continues. Most of the 2014 improvements largely were made with already- available technology. Significant research and develop- ment continues for reaching requirements for 2018 and beyond. All these vehicle improvements aren't free to truck owners, as history tells us. New truck prices have risen sharply in the last 15 years as EPA and other agencies impose these new performance requirements and engine emissions reduction regulations. According to ACT Research, the estimated average price for a new Class 8 tractor sleeper in 2001 was $95,000. It rose to $117,000 after 2007 and 2010 EPA engine requirements, and now sits at $126,000 for model-year 2014. Any incremental improvements in vehicle performance resulting from yet-to-be-developed technology certainly will cause new truck prices to go even higher. For fleets that haven't purchased a new truck in the last few years, the sticker shock can be immense. But analysts say that while present price points look like a significant hurdle, the fuel economy gains from new trucks will pay back in short order, going from a 5.8-mpg truck to 7+ mpg. Medium-sized and large fleets understand this, and many have the tools and technology to squeeze every bit of profit out of a gallon of diesel. But for small fleets, large increases in new truck prices are more worrisome. "[In- creased truck prices] have caused changes in buying be- haviors for small fleets," says Steve Tam, vice president, commercial vehicle sector for ACT Research. "It lengthens trade cycles or knocks them out of contention from the new truck market. The third scenario is that they shrink the size of their fleets." Add to that the inherently more difficult time that small fleets have to finance a new truck, and the issue compounds. While the drumbeat for cleaner, more efficient trucks is a noble cause, perhaps the White House should have let the industry digest the first set of 2014-2018 standards for emissions and fuel efficiency before throwing out an order for new standards less than two months after the first wave has taken effect. 4 COMMERCIAL CARRIER JOURNAL | MARCH 2014 UPFRONT Obama's order for new fuel efficiency standards will decrease emissions and improve fuel economy, but truck prices are sure to rise BY JEFF CRISSEY At what cost? JEFF CRISSEY is Editor of Commercial Carrier Journal. E-mail jcrissey@ccjmagazine.com. Cummins and Peterbilt Motors said their SuperTruck demonstration tractor-trailer achieved 10.7 mpg under real-world driving conditions.