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Equipment: Regulatory curve

Nov. 11, 2013

A veritable tidal wave of regulatory initiatives mandating everything from fuel economy minimums and stopping distances to equipment road worthiness are changing how fleets spec their Class 8 tractors and trailers.
“[They are] affecting purchasing decisions and driving up new asset costs, which are causing other concerns downstream such as residual values of used equipment, depreciation structures, and lease versus own decisions.  The list goes on and on,” says Michael Jeffress, vice president of maintenance at Maverick Transportation and former chairman of the American Trucking Assns.’ Technology & Maintenance Council.
He points out that regulatory changes, especially where fuel economy mandates are concerned, impact Maverick’s decision-making process directly when it comes to equipment specification.

“Generally speaking, we are testing technology up to two years in advance of the regulation release or have made the decision many years prior to it even becoming a concern at the regulatory level to add such technology,” he explains.

“Items such as [putting] disc brakes on trailers in 2008, wide drum brake designs on tractors in 2010, [switching to] 13L engines in 2012, [and spec’ing] aluminum carriers for our rear axles  in 2011 were all done in an effort to improve efficiencies and at the same time limit the impact caused by new regulations,” Jeffress says.

The rules affecting truck equipment spec’ing strategies the most right now are greenhouse gas (GHG) regulations developed jointly by the Environmental Protection Agency and the Dept. of  Transportation back in 2010 to cover three distinct sets of trucks, each with their own compliance timeline.

Clean air initiative

For tractor-trailers, those engine and vehicle standards begin in the 2014 model year and establish a 20% reduction in carbon dioxide (CO2) emissions and fuel consumption by the 2018 model year.

For heavy-duty pickup trucks and vans, the rules call for separate gasoline and diesel truck standards to be phased in starting with the 2014 model year.  These standards would be expected to achieve up to a 10% reduction for gasoline vehicles and 15% reduction for diesel vehicles by the 2018 model year (12% and 17%, respectively, if accounting for air conditioning leakage).

Finally, the standards for vocational vehicles kicked in for the 2014 model year and are targeted to up to a 10% reduction in fuel consumption and CO2 emissions by the 2018 model year.

Mike Roeth, executive director of the North American Council for Freight Efficiency (NACFE), notes that while complying with such regulatory initiatives “is not that easy,” it’s also not that difficult either as the trucking industry has lots of engineering expertise to draw upon.

“Truck engineers will deal with such requirements; it’s what their discipline demands,” Roeth says.  “You also must recognize there’s a tremendous amount of ‘engineering diversity’ in trucking among all the OEMs, fleets, and suppliers, and that diversity really helps bring forth solutions to address mandates such as the greenhouse gas rules.”

Maverick’s Jeffress emphasizes, however, that at the end of the day, fleets must  remain focused on what they are trying to accomplish when spec’ing assets amid such wide-ranging regulatory endeavors.

“Today’s process is more complex than, say, six or seven years ago,” he explains.  “While weight of the asset as well as durability are key at Maverick, I also have to ensure that the product meets our operator requirements, customer requirements, company image concerns, and, finally,  total cost of ownership objectives.  Each area affects the other.”

For example, weight savings efforts aimed at improving fuel economy can adversely affect durability, which then affects cost of ownership.  “While the ability to project future costs and lifecycles of new lighter weight assets are areas of interest, the question remains: Will new lightweight equipment designs perform as well and last as long as their predecessors?”

NACFE’s Roeth brings up another twist.  A recent report compiled by NACFE and Cascade Sierra Solutions on behalf of the International Council for Clean Transportation determined that five major hurdles are preventing many heavy-duty fleets from adopting a wide range of fuel efficiency technologies.  The hurdles identified in the report are payback time and high initial cost of trucks, lack of access to capital, lack of credible information, insufficient reliability, and unavailability of technology.

Perception vs. reality

“The report clearly shows the gap between perception and reality of the adoption of technologies,” he says.  “If implemented, currently available trucking technologies could earn fuel savings of as much as $20,000 per truck with a payback time of 18 to 24 months.”

Roeth believes that lack of credible information on fuel savings is the single biggest barrier preventing fleets from adopting any number of technologies aimed at boosting fuel efficiency.

“Most of the big fleets told us that if they get credible information detailing real-world fuel savings for a particular technology, then they usually can find the money to invest in it,” he explains.  Credible information for payback analysis, then, becomes the main domino that causes all other barriers to fall away.

Roeth contends that bridging that credibility gap is a “relatively easy problem to solve” via improved testing.
“One of the things we’ve found is that many technology providers will do a test with one fleet and believe that fleet’s operation is representative of the entire industry,” he points out.  “Better research means looking more closely at all the different applications within the trucking business so such systems get placed in the right truck duty-cycle for maximum return.”

Ken Gillies, manager of truck purchasing and engineering for GE Capital Fleet Services, believes fleets may need to rethink their strategies for meeting regulations in effect at equipment acquisition time, as well as applying diligent forethought to ensure that the specs they choose meet potential future regulations as well.

“The GHG reduction regulations create a formidable challenge,” he explains.  “The GHG regulation impacts spec development to ensure the truck meets applicable regulations at the time the truck goes into service. Additional challenges reside in maintaining that matchup as various future dates arrive with additional regulation requirements.”

Part of that thinking may revolve around how to achieve current performance metrics with smaller displacement engines. According to a study conducted by global consulting firm Frost & Sullivan, this trend is being driven by the implementation of GHG rules.

The study projects that the average displacement for Class 8 truck engines in the U.S. will shrink anywhere from 2 to 3% by 2018 as OEMs and fleets alike seek ways to improve fuel economy and payload capacity simultaneously for tractor-trailers.

However, Sandeep Kar, global director of commercial vehicle research for the firm, stresses that the power density of  Class 8 engines will actually increase significantly—some 6 to 8%—over the next six years even as they shrink in size. In many cases, this will provide an opportunity for fleets “to have their cake and eat it too.”

More power, smaller size

Based on its research, Frost & Sullivan projects that average Class 8 truck engine displacement will fall to between 13.4L and 13.7L by 2018, down from an average range of 13.7L to 14.1L back in 2011.  Conversely, average horsepower will climb to between 425 and 540 by 2018, compared to a range of 400 to 520 back in 2011.  Torque will also jump as well, increasing to between 1,300 and 1,750 lbs.-ft. on average compared to between 1,250 and 1,650 lbs.-ft. averaged in 2011.

According to Kar, technologies such as improved fuel injection systems and turbocharger designs, for starters, are helping engines shrink in size while pumping out more power. OEMs are looking at still further improvements, such as the use of waste heat recovery systems, as they look to comply with the GHG rules going into effect between 2014 and 2018.

“Remember, the real game here for truck OEMs is the move to global platforms and outside the U.S., smaller engine displacement sizes dominate,” Kar points out.  “Those smaller engines offer better fuel economy and payload for fleets but also better margins for the OEMs.  That has to be considered in this shift as well.”

Click for more on:

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Equipment: Regulatory curve

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