Okay, I know you're sick to death of talking about the new 2007 engine and exhaust aftertreatment systems required for all medium- and heavy-duty commercial trucks starting this month. The fact that new emissions rules are in effect now is good, because it's not talk anymore; it's reality.
But let me throw this out there: All the Sturm und Drang about '07 technology is really only one aspect of the year ahead. And what I've seen, it isn't going to be as huge an issue as everyone fears.
Yes, your diesel-powered medium-duties will cost more in '07 — about $4,000 to $6,000 more per unit, on top of the diesel premium you already pay. Yes, the mandatory use of ultra low sulfur diesel (ULSD) fuel for these trucks will be costly, too — perhaps 5 or 10 cents more per gallon, with a 1% to 3% loss in fuel economy due to its lower energy content. And yes, new CJ-4 engine oil required for these engines will cost anywhere from 25-50% more than the CH-4 blends you used last year.
That's a lot of dollars, and it will complicate your fleet's bottom line immensely. But here's why '07 in and of itself won't be a gargantuan issue: The technology will work. It'll reduce pollution and won't require your drivers to do anything more than pull over now and then to “regenerate” the diesel particulate filter (DPF) on the exhaust pipe to clear out accumulated toxins.
Fleets will have bigger worries this year, which could prove to be a tipping point for many of the trends we've been watching.
Labor: Driver and mechanic shortages will go from bad to worse as the baby boomers (78-million strong) start to retire, with only 45-million Gen-Xers to replace them. By 2012-2015, when the baby boomers are completely out of the workforce, it's going to be really hard to convince younger workers to drive delivery vehicles or get dirty working on truck engines when they can find less taxing — and better paying — jobs elsewhere. How are you going to attract new blood?
Brain drain. Those older workers represent years of experience walking out the door. Experience navigating roads, handling the weather, dealing with traffic congestion, staying on schedule, plus fixing confounding breakdowns with skill and aplomb will disappear. How are you going to fill the gap?
Health care costs. According to the National Coalition for Health Care, spending on health care in the U.S. reached $1.9 trillion in 2004, and is projected to reach $2.9 trillion in 2009. With premiums shooting up 8% to 10% a year, how do you pay for them?
Fuel costs. We hit $3-gasoline in 2006, and diesel was even higher. Prices may be lower right now, but to plagiarize my boss, we are a coup, a hurricane or an embargo away from an energy nightmare. Can your fleet survive when diesel costs $5 or $10 a gallon? Are you prepared to use an alternative fuel?
Pollution. It's ironic, but worldwide pollution, especially in the air, is probably going to keep zooming up — despite all of our clean engine regulations. The clean-air efforts here in the U.S. are probably going to be negated — if not overwhelmed — by the pollution-spewing industrial growth going on in China, Russia, India, and parts of Africa right now. And remember the Kyoto Protocols? Turns out none of the signatories to it are reducing their greenhouse gas emissions.
None of these issues are insurmountable. But solving them will mean lots of good thinking and really hard work. They'll also pack a wallop at the fleet level. So don't fret so much over those '07 engines. You'll be faced with much bigger obstacles this year.