Trucking & Fuel Economy/GHG Regulation Perspectives from Small Business Truckers Presentation to the Office of Information & Regulatory Affairs | May 13, 2015 Trucking: Diverse, Small Business Dominated 500,000 trucking companies in the U.S. 96% have 20 or fewer trucks in their fleet; fewer than 650 carriers are bigger than 500 trucks (0.3% of all carriers) 50% of all companies are 1-truck operations While this is trucking This is also trucking, especially for the small carriers that dominate the industry Differences between Large & Small Carriers Basic Operating Model for a Larger Carrier Carrier serves regional distribution centers. Trucks generally drive on the Interstate. Specifications of the trucks maximize the overall efficiency of this network-based operation.Basic Operating Models for Medium & Small Carriers Lots of variance, depending on market conditions, season, etc Work with established customers hauling similar loads on similar runs; Obtain loads from brokers/load boards with limited predictability on what is being hauled where and when; often point-to-point; Different loads depending upon what kind of equipment you own and your ability to modify equipment to meet needs of customer. Small carriers depend upon a truck that is optimized for their operations whether that is one type of load and run or something extremely variable and unpredictable Fuel economy is a crucial factor for owner-operators, but it is not the only factor. Fuel economy is one of many factors considered by small carriers in purchasing a truckCost Cost to maintain Can I afford it today, with all my other expenses? Cost to purchase Does it break a lot? Cost to repair? Cost of lost business? Operational Impact How does this impact operations today? Cargo hauled, trailer(s) pulled? Driving geography? Customer Demands? How might this impact operations in the future? Customer/cargo changes? Can I modify to meet my needs? Other Needs and Impacts The truck as my home Is it comfortable for me 200+ nights out of the year? Safety of my truck Will it be safe in an accident? Fuel Economy Estimated fuel usageper-mile Are estimates accurate based upon my operations? Breakdowns significantly reduce fuel savings benefits White House Fact Sheet: Opportunity For All: Improving the Fuel Efficiency of American Trucks (February 18, 2014) - an operator of a new 2018 semi truck could pay for the technology upgrades in under a year and realize a net savings of $73,000 through reduced fuel costs over the trucks useful life. One breakdown can start a domino effect of disastrous proportions for an owner-operator High repair costs how to pay for? Lost income from the load they were hauling impossible to recover Lost income from load or loads missed while the truck is in the shop impossible to recover Loss of customer, negative impact to business reputation impossible to recover If a truck has equipment that frequently breaks down, the costs can quickly eclipse any fuel savings. Potential economic cost to an owner-operator of a real-world breakdown Cost ElementBase Cost Tow truckAt least $500 Cost to repower the loadAt least $500 Hotel CostAt least $80/day Meals, local transport, etc.At least $80/day Repair billAt least $10,000 Lost income from loadAt least $1,500 Lost income from down-timeAt least $500/day Potential cost of one breakdown with a 5-day repair time (conservative estimate) $15,800 A small business truckers take-home pay averages around $40,000 - $50,000 a year, so a few unplanned days of no work, plus high repair bills, are economically crippling to the business. Potential fuel savings from untested technologies (such as waste-heat recovery) is not achieved, and leads to an increase in small carrier costs, potential bankruptcies. Breakdowns and high purchase costs make new trucks less attractive Price paid by OOIDA members for their truck: New: $123,000 |Used $42,000 Cost for a new truck likely to exceed $200,000 in a few years. Will your next truck be:New 26% | Used 74%Average fuel mileage for OOIDA members5 to 5.9 mpg 36%; 6 to 6.9 mpg 43%; 7 to 7.9 mpg 11%; Other 11%Almost 40% of OOIDA members have some type of fuel-saving equipment.Many are seeking glider kits because they offer fuel efficiency improvements plus more reliable engines. Small business carriers care about fuel economy, but wont put achieving fuel economy gains above the other considerations in their business. If high-cost and unreliable technology is required to meet EPA/NHTSA GHG reduction targets and stringency requirements, small carriers willavoid buying new trucks. Fuel economy improvement targets will not be achieved as older, less fuel-efficient trucks continue to be preferred. Need to continue to enable efficient & diverse operations 21% 15% 29% 5% 3% 7% 2% 5% 12% FlatbedReeferVanGrainDumpTankerLivestockLowboyOtherPrimary Trailers Used by Owner-Operators Frequently the same tractor is used to pull multiple trailers: Different business operations during different times of year Flatbed for most of the year, reefer during harvest season Business operations, customer base changes Had purchased truck based around van trailer operations, but due to business shifts, flatbed work is more profitable A fairing like this offers significant benefits when pulling a van trailer, but is nothing but a fuel economy drag when pulling a flat-bed. But an overly restrictive rule could prevent an owner-operator from removing this fairing and IMPROVING fuel economy. Other examples where flexibility matters Trailer Tails: only effective once the truck reaches 55 mph, and many local or shuttle delivery routes do not reach that speed. Trailer Gap Reducer: gap fairings are of little use when engaged in intermodal 20ft and 40 boxes Trailer Side Skirts: trailer skirts are most effective at the top end of highway speeds, a local/shuttle operation may never see highway speeds. A driver who regularly visits a dock facility where a steep loading dock ramp would damage the side skirts would want to remove them. Low Rolling Resistance Tires: reduced tread depths can cause serious traction loss in off-road use such as oil field, agricultural or construction deliveries.Also traction is an issue on snow packed surfaces.Cab Mounted Side Gap Fairings: gap fairings are of little use when engaged in intermodal 20ft and 40 boxes or when hauling many low-profile flatbed loads. Aerodynamic Bumper: cattle guards may require at least a modification to a bumper.Fuel Tank Skirts: increasingly aerodynamic fuel tank skirts have smaller step areas and the hand-holds are smaller. Especially an older driver may need the larger steps to safely enter/exit the cab. Idle Reduction Auto Shut Off: if the truck owner is using the truck power to operate a PTO pump or other device this feature prevents that operation. Transmission and Other Engine/Powertrain Changes: mountain driving, heavy haul, etc. Additionally, some equipment designed to improve fuel efficiency for the truck adds weight. Image: ATRI Factors to incorporate into a Phase II GHG Proposal Technology reliability must be considered as standards/stringency is set If standards or stringency requirements push OEMs to utilize unreliable technology, costs for truckers will go up, while environmental benefits will be reduced.Cost for OEMs to develop reliable technology must be a factor. In developing cost-benefit analysis, impacts of breakdowns should be calculated broadly If the high costs of breakdowns are not reflected, then costs for truckers will go up, while environmental benefits will be reduced. Reflect market realities regarding impacts of technology-driven truck piece increases Even the most efficient truck can be priced out of reach for small business owner operators. If this reality is not reflected, the environmental benefits will never be realized due to lack of new truck purchases and increased life-cycles of older trucks. Diverse operations of small carriers must be considered There is a huge amount of diversity among small carriers, and their businesses may change multiple times during the ownership of a truck.Standards designed to save money through reduced fuel usage should not cost the trucker money through constrained operational flexibility.