E&MU: CARB Issues Fines for Reefer Violations

By Frederick Kiel, Staff Reporter

This story appears in the May/June 2010 issue of Equipment & Maintenance Update, a supplement to the May 17 print edition of Transport Topics. Click here to subscribe today.

Agents of the California Air Resources Board have fanned out to ticket truck operators who fail to comply with the state’s complicated schedule for reducing emissions from the small diesel engines that power transport refrigeration.

California now requires the engines on model year 2002 and older reefer units to be replaced with cleaner engines or retrofitted with diesel particulate filters.

Violators, whether based in California or elsewhere, are subject to a fine of $1,000 for the first offense and $1,800 for the second.

“We have written quite a few of those tickets,” Manfred Ochsner, manager of CARB’s diesel enforcement section, told Equipment & Maintenance Update.

Enforcement was launched Jan. 1 on a rolling compliance  schedule that stretches over years and eventually encompasses all transport refrigeration units on California streets, highways and rails.

The Level 2 standard for pre-2003 units represents a 50% reduction from a baseline in exhaust soot. Coming is an 85% reduction, dubbed Level 3, which will apply to TRUs made during and after 2003.

In a March interview, Ochsner said it was too early to provide detailed statistics about enforcement results. But to illustrate CARB’s commitment, he offered results of inspections for a related mandate. California-based fleets were required to register their reefers by July 2009.

“Last year, we inspected 1,271 California TRUs” for registration stickers, Ochsner said. “We wrote 426 citations, for $197,000. To date, we have collected $45,300, all from California-based fleets only.”

The California Trucking Association, which won an earlier postponement, continued to press for an enforcement delay, arguing that replacement equipment hasn’t proven itself in real-world applications.

“There is fear that the equipment may fail or shut down during transport of a refrigerated load, resulting in a very expensive loss of freight,” said Julie Sauls, spokeswoman for the California Trucking Association.

Some truck drivers reported TRU inspections at ports of entry and weigh stations inside California’s borders. High-traffic distribution centers also were being policed, but the activity did not appear widespread to a number of truckers who spoke with E&MU.

A couple of fleet managers in California were unhappy that enforcement was not more aggressive.

“This regulation has been a hardship on us,” said Scott Cramer, general manager of Certified Freight Logistics, Santa Maria, Calif. “We were running 12- and 16-year-old trailers at one point, so that we completely changed our business philosophy to conform to CARB.”

Certified Freight has 250 refrigerated trailers,  which are pulled by 80 company drivers and 70 owner-operators, moving produce across the West Coast and Arizona.

It was ready to go six months ahead of CARB’s schedule — but at a cost.

“We spent $350,000 on retrofits in 2009 and that accounted for 70 trailers or so, which made us 100% compliant,” Cramer said.

“When the July [2009] deadline was postponed, we didn’t get any early-compliance rewards,” Cramer said.

Cramer also said that noncompliant fleets have gained an economic advantage over Certified Freight by not paying the hefty retrofit fees.

“We see guys rolling in from out of state that don’t appear to be compliant,” Cramer said. “We see guys running around locally with two, three or four trucks, and they have no [CARB] identification labels on them.”

The manager of a refrigerated fleet from out of state complained about the registration-sticker requirement, because anyone who operates a California refrigerated dock with 20 or more doors comes under the rule’s reach.

Shippers and receivers pay that fine, said Steve Dickson, vice president of John Christner Trucking, Sapulpa, Okla., which runs reefers into California often.

“When Jan. 1 rolled around, we had shippers refusing to load our trailers because they didn’t have [our] CARB number,” he said.

Dickson said that as an out-of-state carrier, John Christner Trucking wasn’t required to have a number on its reefers, but eventually would apply for them.

“We were waiting for things to settle down,” Dickson said. “We were going to voluntarily comply. We have started to voluntarily apply for those numbers.”

In some ways, California’s TRU rule is a small worry for a major continental operator such as C.R. England, based in Salt Lake City. The company ranks No. 30 on the Transport Topics 100 list of the largest for-hire carriers in the United States and Canada and it has the largest truckload refrigerated fleet in the nation. It does not allow its equipment to get too old.

All 5,000 of its trailers are reefers.

But CARB compliance will hurt the company in one important way.

“We have taken an indirect loss on the trade value when selling those older trailers,” Ron Hall, director of business strategy, said. “The resale loss is significant, because used trailers that aren’t TRU-compliant have less value.”

In Oklahoma, John Christner Trucking, which runs 1,050 trailers, tracks reefer hours rather than age to decide when replacement is due.

“We don’t have any reefers that are 2002 or older,” Dickson said. “One of my self-appointed duties is to oversee this. I stay up on everything. We knew this was coming. We sold our last 2002 trailer two years ago.”

He said the oldest reefer in his fleet was an ’06.

“But resale prices are terrible of trailers that aren’t CARB compliant,” Dickson said. “Absolutely, we had a financial loss in selling trailers.”

The legal clock is also ticking on another California equipment requirement.

This rule, built on the voluntary SmartWay program initiated by the federal government, requires new sleeper tractors and 53-foot or longer van boxes to have low-rolling-resistance tires and aerodynamic components.

As with the reefers, this rule applies to any equipment that operates in California, regardless of where it is registered.

Aerodynamic components include trailer skirts, nose cones and other fairings.

C.R. England feels more heat from the cost of the aerodynamics requirement than from the emissions restriction.

“Since most carriers don’t have the capacity to transfer loads at the border of California, the CARB rules were essentially requiring full-fleet implementations” by out-of-staters.

That is why C.R. England is ordering its 2011 trailers as CARB-compliant, no matter where they will run. Also, by 2013, the firm’s 2009 and 2010 models will be fully compliant, Hall said.

“We selected a skirt manufacturer after wide scale testing,” Hall said, conceding that smaller fleets may not have the resources to do the same.

“We ran identical equipment on a pre-determined route, both with and without a particular aerodynamic device,” Hall said. “We take the same routes with the same loads, and switch between equipped and nonequipped trailers. We were able to determine what the actual fuel use was with both regular trailers and CARB- compliant trailers through this process.”

C.R. England did not find that such trailers delivered the fuel savings that CARB promised would more than make up for the extra expense.

“What we have found out in our testing program is that the 7% improvement in fuel economy mentioned by CARB is achieved only in a heavy cross wind of about 40 miles per hour,” Hall said. “Real life test results in usual conditions only give a 3-to-3½% fuel savings. That is more realistic. That is about a break even for our ownership cycle, which is seven years.”

John Christner Trucking is addressing the same problem by, in effect, pre-buying.

“We actually started last year to deal with CARB’s SmartWay regulation when we placed an order for 50 Great Dane and 50 Utility trailers,” Dickson said. “These trailers were originally going to be 2011 model year delivered in January and February of this year. We changed that, because 2011 has to be SmartWay approved, and that involves $1,800 in additional costs for side skirts.”

Dickson added that John Christner  placed an order for 50 additional Great Dane trailers that were to be delivered in April and May.

“We have specifically requested that they will be 2010 models to avoid the higher costs,” Dickson said.

Dickson made no apologies of using loopholes. “We are circumventing the regulation,” he said. “Here’s the rub. The speed limit in California is 55-60 miles per hour. If you look at research done by SmartWay, all the fuel economy increases are based on longhaul highway speeds of 65 mph or greater.”

Dickson believes the SmartWay trailer “really doesn’t apply to California.”

Ronald Silva, owner of Westar Transport, Selma Calif., a for-hire regional carrier with 80 tractors and 120 trailers, said that he wants to comply with CARB but finds it difficult to justify the expense.

Westar runs only five reefers, and as 2008 models, they are currently unaffected by CARB’s TRU schedule. But the aerodynamics mandate was causing trouble.

“California carriers seem to be conforming to the reefer regulation, but a lot of fleets don’t seem to be doing much about the SmartWay rules,” said Silva.

He has decided not to buy any trailers this year.

“This is the worst business environment I’ve seen in my 30 years in trucking, and the added CARB regulations will drive dozens if not hundreds of California trucking companies out of business,” he said.