Future fuel economy standards for heavy duty trucks could be beneficial for shippers

Reducing emissions and increasing over-the-road transportation productivity is likely to be at the top of many shippers’ strategy playbooks. What’s more, it is also very timely these days, considering the White House recently called on the Department of Transportation and the Environmental Protection Agency to develop new fuel economy standards for heavy-duty trucks.

When he first raised the new standards, for which a proposal is due in March 2015 with the new rule coming about a year later, President Barack Obama called for the DOT and EPA to partner with various entities, including manufacturers and autoworkers and states and other stakeholders like truckers to come up with the specifics.

As previously reported, the President stressed the fact that the nation wants trucks that use less oil, save more money and cut pollution, and he noted that the White House’s National Clean Fleets Partnership, which was established in 2011 and is focused on helping large companies cut down on diesel and gasoline usage in their fleets by meshing electronic vehicles, alternative fuels, and fuel-savings measures into their daily operations, is now up to 23 member companies, including transportation titans UPS and FedEx.

Specifics of the improved fuel efficiency standards is Obama calling for have yet to be disclosed, but he did note that for in order to have businesses and manufacturers meet the new goals, the White House is offering new tax credits for companies that manufacture heavy-duty alternative-fuel vehicles and those that build fuel infrastructure so that trucks running on biodiesel or natural gas or hybrid electric technology, will have more places to fill up.

Jason Mathers, senior manager, supply chain logistics, for the Environmental Defense Fund (EDF), said this rule has tremendous potential for shippers and their supply chains in that it brings huge opportunities to cut emissions and reduce fuel consumption, as well as an overall benefit for the economy by reducing petroleum spend.

“From a shippers’ perspective, they are in the unique position regarding the real time costs of operating trucks in that they pay for fuel through the fuel surcharge and also a little bit through linehaul fees,” noted Mathers. “Along with that are linehaul fees that reflect the costs of purchasing a truck and maintaining and staffing it, with fuel representing about 40 percent of the total costs of owning and operating a truck.”

This rule addresses number one costs of shippers for moving freight and from that perspective it is a little bit different than it is for fleet partners in that the trucking companies’ top concern is upfront costs and more efficient trucks will cost more to purchase and cost a lot less to operate making it a good long-term proposition.

“Shippers could be in a nice position to operate and work with their fleet partners to encourage them to support a strong role, and shippers who save on fuel surcharges with a little bit of that going back to their carrier partners could help to offset the higher costs of a new truck,” explained Mathers.

While specifics of the rule won’t be available for nearly a year, Mathers stressed that when details become available shippers should pay attention to the stringency of the rule in terms of efficiency gains, noting that the higher the efficiency gains are, the more the cost savings and fuel savings need to be balanced.

Other factors for shippers to pay attention to regarding the rule include:
-the timeframe for it to go into effect, which will impact related technologies and standards applicable to it;
-to see if it includes requirements for aerodynamic trailers that can reduce tractor-trailer fuel consumption by up to ten percent; and
- if federal agencies will call for low cost fuel saving technologies and

Mathers made it clear that there are many complex issues on the table when it comes to drafting this new rule, adding a lot of work will be put into to in order to draft the best rule possible. And with that, he said, comes opportunities in the coming months for the shippers to work with federal government agencies and engage in public forums to make their needs clear in this process.

This rule presents a terrific opportunity to push the conversation forward and beyond just talk with a rule that can truly make a difference from supply chain, economic, and environmental perspectives. Let’s hope all the key players are up to the task.