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 truck
Fuel
Economy
Cost

Operational
Impact

Other
Needs and
Impacts

Estimated fuel usage

per-mile

Are estimates accurate based upon my

operations?

Cost to maintain

Does it break a lot?

Cost to purchase

Can I afford it today, with all my other

expenses?

How does this impact

operations today?

Cargo hauled, trailer(s) pulled?

How might this impact

operations in the future?

Customer/cargo changes?

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?

Cost to repair? Cost of lost business?

Driving geography? Customer Demands?

Can I modify to meet my needs?

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 Element

Base Cost

Tow truck

At least $500

Cost to repower the load

At least $500

Hotel Cost

At least $80/day

Meals, local transport, etc.

At least $80/day

Repair bill

At least $10,000

Lost income from load

At least $1,500

Lost income from down-time

At 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%

If high-cost and unreliable technology is

required to meet EPA/NHTSA GHG
reduction targets and stringency
requirements, small carriers will
avoid buying new trucks.

Fuel economy improvement targets will not

be achieved as older, less fuel-efficient
trucks continue to be preferred.

Average fuel mileage for OOIDA members

5 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.

Need to continue to enable efficient & diverse operations

Primary Trailers Used by Owner-Operators
Other
Lowboy
Livestock
Tanker
Dump
Grain
Van
Reefer
Flatbed

12%

Frequently the same tractor is used to

pull multiple trailers:

5%
2%

Different business operations during

different times of year

7%
3%

5%
29%
15%
21%

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

Image: ATRI

Cab Mounted Side Gap Fairings: gap fairings are of little use when
engaged in intermodal 20ft and 40 boxes or when hauling many lowprofile 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.

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.

Additionally, some equipment designed to improve fuel efficiency for the truck adds weight.

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.