The extensive rebuilding of highway tractors to extend their useful life is once again in the news — for the first time in some 30 years. Just as the last time the practice gained attention, it's the state of over-the-road trucking that's driving the action.
Back then it was the double-whammy of the 1980-81 recession and trucking deregulation, signed into law in 1980, that led many traditional LTL carriers to overhaul their tractors. In some cases, the overhaul went as far as completely rebuilding linehaul tractors, including everything from the engine to the cab.
Now, many long-haul carriers are fighting to get through today's freight slump while at the same time seeking to avoid buying new trucks that are much more expensive — thanks to EPA 2010 emissions rules — for as long as possible. To help those customers, at least two major truck OEMs have launched their own programs to thoroughly refurbish trucks on a customer-by-customer basis.
During its news conference at this year's Mid-America Trucking Show, Navistar devoted considerable time to explaining its new all-makes “ReStar” program. And during a question-and-answer session at the Daimler Trucks North America news conference, Mark Lampert stated that DTNA's Freightliner Trucks operation “has a refurbishing program, we just haven't announced it.”
The programs of both OEMs aim to take a late-model, low-mileage truck from a customer and then refurbish it thoroughly enough that the fleet can get more use out of it, presumably without driving up maintenance costs. At the same time, the fleet can avoid selling the vehicle now at today's depressed used-truck values.
CREATING OPTIONS
“We understand in this tough economic time that buying a new truck often is not an option,” said Jim Hebe, Navistar's senior vp-North American operations, at the OEM's event. He noted that by Navistar's calculations, the base cost of a new truck due to emissions regulations has jumped by $27,000 since 2002. “We are offering ReStar so fleets can extend the life of an International or any other OEM truck model.”
Hebe said the ReStar process makes sense for fleets whose vehicles don't require major overhauls. Focus is on upgrading electrical components, HVAC systems, clutches, drivelines and brakes. “The key is to stay out of the engine,” he explained. Avoiding an engine rebuild means fleets commit to between $5,000 and $20,000 at most to take a typical three-year-old truck and, in effect, reset its lifespan clock back two years, according to Hebe.
Navistar's ReStar specialists as well as fleet owners carefully pick the trucks for refurbishment to stay within those cost parameters, he pointed out. “The return for the fleet is a like-new vehicle that avoids the 12% excise tax on a new truck and also keeps depreciation around 10 to 13 cents a mile,” Hebe added. He also pointed out that Navistar will be running its program at a dedicated facility.
Bruce Stockton, vp-maintenance & asset management for Joplin, MO-based Con-way Truckload, told Fleet Owner he is looking into the ReStar program, having sent Navistar one of the fleet's Kenworth T600s for analysis. This particular truck has 600,000 mi. on it, so engine work would be expected.
“I gave them a budget including swinging a remanufactured engine,” said Stockton. “I'm looking into the program because the price of new equipment keeps going up. We had been trading trucks at 3 yrs./400,000 mi., but our goal now is to get to 600,000 mi. We did it [refurbishing] ourselves,” he added, “but found the money we put in did not pan out in time for our operation.”
