Consultant Sees Another Pre-Buy of Trucks Ahead of 2014 Fuel Efficiency Standards
By Eric Miller, Staff Reporter
This story appears in the Feb. 7 print edition of Transport Topics. Click here to subscribe today.
WASHINGTON — The first-ever proposed federal commercial truck fuel-efficiency and carbon emissions standard could cause an industry pre-buy before it becomes effective in 2014, or drive motor carriers to delay retirement of their fleets, a transportation consultant said.
“I think it’s fair to say that the perspective of the proposed rule is essentially, ‘Build it and they will come’,” said Harry Foster, a transportation consultant and principal in Charles River Associates, Boston, an economic, financial and business management consulting firm. “I’ll express a contrary view: Customer preference will slow the adoption of new trucks meeting the proposed rule.”
Foster, speaking here Jan. 25 at the Transportation Research Board’s annual meeting, said the new fuel-efficiency standard will make new equipment more costly and could cause reliability concerns among motor carriers.
“I think to some extent you’re going to see delayed retirements as a result of this regulation,” Foster said.
The proposed new joint Envirosystenmental Protection Agency and National Highway Transportation Safety Administration standard, which will be phased in from 2014-2018, could cause a repeat of the spike in older truck models purchases just before EPA’s stringent particulate matter and nitrogen oxide engine emission-reduction standards went into effect in 2007, Foster said.
Federal regulators estimate the cost of Class 8, 2017 fuel-efficiency complaint equipment will increase by an extra $5,900 on average, but will save an estimated $74,000 in fuel costs over the life of the engine.
The proposed greenhouse gas emissions regulation, announced in October, would cut emissions from large trucks by 7% to 20% by 2017, depending on the size of the truck and the way it is used.
But even without the new rule, there already are barriers that tend to make motor carriers slow to employ the use of high-return energy technologies, Foster said.
Even though some of the technologies offer a quick payback in energy savings, there still is a general industry reluctance to make the upgrades, a factor known as the “energy paradox.”
Foster said some in the industry believe that truck buyers “systematically undervalue fuel cost savings.”
“They are unduly price sensitive and don’t recognize the full benefits that come down the line,” he said.
Some carriers also have concerns about reliability and don’t want to be the first in the industry to test the new technologies under real-world conditions.
“Reliability is a big factor in the heavy duty truck market, more important than small fuel gains,” Foster said. “A missed delivery, a truck stranded at the side of the road a few times is going to cost more than the fuel savings that you might expect.”
“Everybody would like somebody else to adopt them first and develop an information base,” Foster said. “But this problem can be offset with good government and private sector testing like the SmartWay program that certifies technologies.”
Another barrier to the employment of new energy saving technologies occurs when drivers don’t own the equipment they use. That, in turn, can cause a truck owner to be reluctant to fund capital equipment costs for new energy technologies, Foster said.
“This split may create inadequate incentives to invest in future fuel savings, even though it may make perfect economic sense,” Foster said.
