Fleet Experts Weigh In: Fuel Economy Rules for Trucks Pay Off

, senior vehicles analyst | September 14, 2015, 4:47 pm EDT
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With fuel such a key expense for truck fleets, one of the questions I get asked the most is—why do we need fuel economy rules? As I outlined in Engines for Change, there are actually a lot of market barriers that can slow investment in efficient trucking, including fuel surcharges and the risk-averse conservatism of a capital-constrained marketplace. But you don’t need to take my word for it: Fleet owners across the country also support fuel economy regulations. Fleet Owner is even hosting a webinar (register here) with the North American Council for Freight Efficiency to explain why the proposed global warming emission and fuel economy regulations for heavy-duty vehicles should help fleets save money.

Fleets of all shapes and sizes are poised to save money with federal fuel economy and global warming emission standards for trucks.

Fleets of all shapes and sizes are poised to save money with federal fuel economy and global warming emission standards for trucks according to a recent survey and analysis.

What fleet operators have to say

A recent national survey of 45 fleets of all types and sizes by CALSTART revealed some common themes among fleet operators when it comes to fuel economy regulations:

“Fuel consumption is a high operating cost that can be acted upon.  Increasing vehicle and system efficiency results in higher fuel economy, which will lower overall operating cost.”

We couldn’t agree more. Our own analysis showed paybacks well within what would be acceptable for fleet operation, which is why we think the agencies’ proposed rule should be strengthened to provide even greater benefits.

“Due to highly variable on-road and off-road drive cycles, special care must be taken to ensure that fleets have adequate purchasing options for higher fuel-economy vehicles that are applicable to their drive-cycle and fueling capability.”

The heavy-duty vehicle regulations cover a wide variety of vehicles, from delivery vans to dump trucks, tractor-trailers to transit buses, and even RVs and ambulances—basically every fueled on-road vehicle you can think of that isn’t a motorcycle or a passenger vehicle. The government agencies (the EPA and NHTSA) have worked to make their rules more specific to the various duty cycles, but most importantly these rules are flexible enough for manufacturers to provide the most-efficient truck for each market segment.

“Manufacturers need to ensure technologies do not reduce reliability and that their fuel economy goals are reachable, with deployments [that are] neither cost- nor time-prohibitive to fleets.”

This is something we definitely recognize—ultimately, these trucks are meant to work, and any downtime means they aren’t doing their job. In analyzing what is feasible through these rules, we’ve considered the manufacturers’ ability to invest in development, demonstration, and deployment of more advanced efficiency technologies within an appropriate product cycle. We find that the proposal allows far more time than is necessary to deploy robust, durable fuel economy technologies. We agree that adequate lead time will reduce reliability concerns, but this proposal moves too slowly, which will ultimately hurt businesses’ bottom lines by limiting efficient options for fleets.

 “Emission reduction as a result of increased fuel economy is a humanitarian goal that affects everyone. Reduction in fossil fuel consumption carries the additional benefit of reducing dependency on volatile foreign oil markets.”

Kudos to many of the fleets who recognize that these rules extend beyond just providing value to fleets, which they certainly do. Reducing oil consumption is part of why we work so hard to make sure EPA and NHTSA do their job.

“Fuel economy on commercial vehicles has not increased significantly in years because there has been no regulation either forcing or incentivizing manufacturers to improve efficiency.”

Amen.

How fuel economy rules can help fleets and consumers

Fuel economy regulations can not only help drive investment in technology by increasing market certainty but also help reduce costs by scaling up deployment of these technologies.  The ultimate goal for businesses that use these trucks is to reduce operating expenses, and having more efficient vehicle choices can help them do so.  That’s why companies like Pepsi, who own their own trucks, are supportive of these standards. But those savings can also be passed on downstream.

M.J. Bradley and Associates, a consulting firm, found that strong fuel economy regulations could reduce freight costs by nearly 3% by the end of the Phase II rule and almost 7% in 2040 as new trucks continue to enter the market. This is one of the reasons why we’re seeing a number of companies who don’t even own their own trucks come out and support these standards—companies like Apple or American Eagle could see reduced shipping rates for getting their goods to consumers. BICEP, a coalition of leading businesses committed to working with policymakers to enact strong energy and climate policies, wrote a letter to EPA and NHTSA supporting a 40% reduction in fuel use by 2025. Ben and Jerry’s, a BICEP member, knows that transportation is a huge chunk of their carbon footprint and are looking to the standards to “deliver…pints to your freezer more cheaply, and with less greenhouse gas pollution, than [they] are able to do today.” And IKEA and Stonyfield Farms are similarly calling for strong standards because “these rules save consumers and businesses money at the pump, lessen the economic and national security threats presented by oil dependence and price volatility, and help American manufacturers develop new technologies.”

Of course, these fuel savings can help reduce the costs not just for shippers but for consumers as well. Consumers Federation of America estimates that households could save $200 annually under the proposed fuel economy standards. And I’m sure everyone is looking for a bit more money in their pockets…even if it might just end up buying me a pint of Chubby Hubby.

If you’re a fleet interested in learning more about how fuel economy standards could benefit you, check out the Fleet Owner webinar. And if you work for a fleet or have another role in the trucking industry, feel free to let me know your thoughts on these new standards in the comments section below.

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  • Rose Westwood-Merrick

    Our city buses in Corvallis, Oregon, are using bio-diesel fuel made from recycled vegetable oil. It’s much more pleasant to ride the bus when the fumes smell like french fries! Willie Nelson and his business partner have a bio-diesel fuel made from hemp oil they sell from a station in Texas. Changing the type of fuel available is another way to reduce the use of fossil fuels and production of greenhouse gases. http://www.hemp.com/hemp-education/uses-of-hemp/hemp-fuel/

    • Sustainable biofuels are definitely a choice that is complementary to efficiency policy–it’s a major focus of my colleague Jeremy Martin and a significant part of UCS’s Half the Oil plan (http://http://www.ucsusa.org/clean-vehicles/clean-fuels/half-the-oil-how-it-works). But it’s also important that regardless of the fuel, we use it smartly to minimize environmental impacts.

    • neroden

      City buses should go fully electric. There are very good battery-electric models available in the US from BYD, New Flyer, and Proterra, and probably other companies by now.

      They already have similar or lower Total Cost of Ownership to a fuel-powered bus, in a city-bus duty cycle (lots of start-stop).