Fleets Search for Savings Through Strategic Equipment Purchases

By Sarah Godfrey, Staff Reporter
This story appears in the March 3 print edition of Transport Topics.

With fuel prices at a record and the economy teetering at the brink of a recession that could cut into carrier revenue, some truckload carriers are pushing harder for savings by using lighter trailers, limiting idling to save fuel and shortening trade-in cycles.

While those practices involve initially higher expenses, fleets that have adopted them say they’ll save money in the long run, allowing them to remain competitive and profitable.
“People are always looking at new options to help them operate as low cost as they possibly can. Those are the big three things,” said John Kaburick, president of Earl L. Henderson Trucking Co., Salem, Ill.

Kaburick is a member of the Truckload Carriers Association’s Benchmarking/Best Practices program. TCA’s benchmarking program is a self-help forum in which business principals can compare operating benchmarks and best practices. Groups of between 12 and 20 members — divided into specialties such as refrigerated, dry-van and flatbed — meet three times a year to exchange proven ideas and measure their financial performance against fellow operators. A private service management firm takes the data from those meetings and provides industry benchmarks.

Investing in auxiliary power units is probably the biggest cost-saving practice for truckload carriers currently, Kaburick said. “From a truckload standpoint, putting APUs on [trucks] for idle-reduction is the big one,” he said.
APUs use small engines to power heating, cooling and truck cab appliances while the vehicle’s main engine is off. Manufacturers of the units and carriers that use them said they can cut the amount of fuel consumed while a truck is parked by at least 25%, compared with allowing the truck engine to idle for several hours while the driver is resting.

Though many APUs on the market use a small engine, typically with two cylinders, to drive an air conditioner and electrical generator, other units rely on energy stored either in a battery or other energy-storage device, or use a high-capacity thermal storage unit supplemented by a small fuel-powered furnace.

The U.S. Environmental Protection Agency estimates that long-duration truck and locomotive engine idling consumes more than 1 billion gallons of diesel fuel  annually.
APUs not only help fleets save fuel, but they also enable them to comply with tougher air quality standards that prohibit long periods of idling, such as those imposed by the California Air Resources Board at the beginning of the year.

Effective Jan. 1, CARB enacted a rule limiting truck idling time to no more than five minutes — including sleeper-berth time — with few exemptions.

The California rule is one of the strictest in the nation, but 15 other states and the District of Columbia currently have anti-idling regulations in place on a state, county or city level, according to the American Transportation Research Institute.

Those kinds of restrictions made APUs a desirable feature for Wellborn Trucking, a division of the Ashland, Ala., company Wellborn Cabinet Inc. “The last 28 tractors we bought, we had APUs installed,” said Ken NeSmith, Wellborn’s director of logistics. He said that before his company took possession of the new tractors, their dealer worked with APU maker Thermo King, Minneapolis, to install the technology.

NeSmith said that, depending on whether heating and cooling are being used, the tractors with APUs installed burn from 4/10 to 6/10 of a gallon of fuel per hour, compared with the 1.5 gallons per hour that his tractors without APUs were consuming.

Another way to cut idling fuel is to plug into a shore-power unit found at some truck stops and rest areas. One such system is offered by IdleAire Technologies of Knoxville, Tenn.

That system, which provides service at more than 130 locations throughout the country, allows drivers to access heating, cooling and various amenities from a central duct and electrical hookup system that attaches to a truck while it is parked.

“We also have an agreement with IdleAire Technologies where drivers can pull in, spend their 10-hour break hooked into IdleAire and use fuel cards that are charged to the company. We do it to fit with clean air [standards] and save fuel,” NeSmith said.

He added that he had not yet calculated exact fuel-saving statistics related to IdleAire use, but he said the fact that no fuel is being used when drivers turn their engines off and connect to the system has resulted in “significant” savings.

Greg Brown, president of B.R. Williams Trucking Inc., Oxford, Ala., said he believes APU add-ons could pay for themselves in just a little more than a year. “We are looking currently at adding APU units — we’re strongly considering them,” Brown said. “We’re looking at payback of 15 to 18 months.”

APU maker Black Rock Systems, of Reno, Nev., said on its Web site that trucks using its product consume only 0.3 gallon of fuel an hour when operating an APU, versus 1.2 gallons an hour when the truck engine idles without the device.

Another way to save money in the long run is to use newer equipment, thus saving on maintenance costs, Kaburick said, with some truckload carriers buying new vehicles and purging older ones on a more aggressive schedule than in years past.

After a time when truckload carriers swapped out older vehicles less frequently in an effort to save money, the conventional wisdom on trade cycles is changing, Kaburick said.
“I think a lot of people in the past tried to stretch their trade cycle out, but they are starting to shorten them back up,” he said. “Rather than keeping trucks for, say, four years, they are only going three years or 42 months before trading.”

Brown said one of the reasons for the trend toward shorter trade cycles is that meeting rigorous Environmental Protection Agency emission standards requires engines to run hotter, which he said shortens engine life.

Brown said that he previously could get a million miles out of an engine but that the hot-ter-running EPA-compliant engines begin to exhibit problems after 500,000 miles. Therefore, it’s easier and more cost-effective simply to trade vehicles in rather than attempt to extend the life cycle of truck engines.

“We would keep them for six or seven years before trading them — we’d run them in longhaul, then move them to regional, then to local service after they [accumulated] a lot of miles,” Brown said. “Now, since it’s costing more to maintain the engines due to them running hotter, we’ve shortened the trade cycle and buy only for the division, meaning we keep new longhaul trucks for 42 months and new regional and local trucks for  48 months, and we don’t transfer between divisions.”

NeSmith also said that maintaining a fleet of low-mileage tractors has proven cost-effective. He said he has begun trading in all vehicles before they reach the 500,000-mile mark. “I think 28 of our tractors are 2007 models, 16 of them are 2006 models and 20 are 2005 models,” he said. “We were running some 2002 and 2003 trucks up until the latter part of last year but pulled most of those off and sold them the first of the year.”

The third important leg of TCA’s best-practices recommendations is cutting weight by adopting lightweight tractor and trailer configurations.

Most heavy trucks are rated to a gross vehicle weight of 80,000 pounds. Without a special permit, that weight is a maximum, which includes the vehicle and any freight being hauled. Subtracting the weight of the tractor, trailer and other incidentals, most commercial heavy trucks can haul as much as 45,000 pounds without breaching their weight limit. By using lighter equipment, however, carriers have found they are able to haul 5,000 to 10,000 additional pounds without hitting their weight ceiling.

“The more progressive companies are really looking at [reducing] weight,” said George Edwards, president of the consulting firm George L. Edwards & Associates, Opelika, Ala.
 “There has been a lot of effort made by manufacturers of equipment, and there has been some great progress made with things like tire technology,” he said. “Anytime you can reduce the weight of a tractor, trailer or both, you are money ahead.”

Baltimore-based carrier Cowan Systems recently converted its entire fleet to lightweight configurations, swapping all equipment due for trade for less-heavy equivalents.

Dennis Morgan, chief operating officer of Cowan, said that, through lightweight spec’ing, Cowan’s trailers are 13,000 pounds and its tractors are between 16,000 pounds for day cabs and 18,000 pounds for sleeper berths. With a combined tractor-trailer weight of 30,000 pounds or less, Cowan is able to haul 50,000-plus pounds per vehicle, whereas most of the industry tops out at 40,000 to 45,000 pounds, Morgan said.

“The tractor-trailer combination can’t do more than 80,000 pounds,” Morgan said. “If your combination is less than 30,000 pounds, then you can haul 50,000-plus pounds and still stay within the legal limit.”

“It gives us an advantage of 10%, or 5,000 more pounds, than a normal configuration,” Morgan noted. “I jokingly say that we’ll haul one load and you get one free.”
  Cowan has 2,500 trailers and 800 tractors, and Morgan said it took five years to convert the entire fleet. Cowan completed its conversion to a 100% lightweight fleet in just the past few months.

 Morgan said Cowan specs tractors and trailers as light as it possibly can while still ensuring they have the stability to handle heavy loads. Those specifications include smaller, lighter engines and fuel tanks on tractors and aluminum wheels, composite flooring and single, rather than dual, rims on trailers.

 “The industry is starting to become aware of it,” Morgan said. “Shippers that haul heavier, dense products are very much attracted to it.

“It’s probably the next trend in trucking,” Morgan added. “There are things the industry has done to reduce costs for everyone, and I think this is the next avenue for transportation to go to [in order to] reduce costs. We can’t make the trailers any longer. There is only so much you can do, and this is one avenue left.”