New regulations proposed for the trucking industry
By: Phil Sneed
The Environmental Protection Agency is preparing to propose new regulations that will require trucks to become more fuel efficient, according to The New York Times.
Fuel economy has been regulated by the EPA since 2011, when the agency and National Highway Traffic Safety Administration began to require trucks to have better fuel economy. One of the initial standards put forth by the proposal required trucks to use more fuel-efficient tires, and initial implementation went relatively smoothly. However, this new proposal has some truckers and manufacturers concerned for a few reasons. They worry about the increased manufacturing costs of new tractor-trailers, according to The Seattle Times. Higher costs will stem from innovation and more disruptive options, which may include using recycled engine heat to power another turbine.
2015 study shows promising results
Trucks have been making steady strides to increase fuel efficiency. John Yandell Jr., – president of Yandell Truckaway – told The New York Times his trucks were averaging five mpg about 20 years ago. He said trucks are now averaging 6.2 to 6.4 mpg. The non-profit organization, North American Council for Freight Efficiency, seeks to help double freight efficiency of goods transported throughout North America. Along with the non-governmental organization Carbon War Room, a think tank founded by Sir Richard Branson, a study was conducted in 2015 looking at fuel-efficiency adoption. According to the report, the NACFE average of seven mpg has resulted in nearly $9,000 in annual savings per truck. The two organizations hope to "accelerate the trucking sector's fuel efficiency." More trucks are adopting new technologies to save on fuel, such as aerodynamic improvements for trailers and idle reduction solutions. Logistics management is also helping to increase fuel efficiency by utilizing proven methods and software to find the quickest route when it comes to shipping goods, all without strict government regulation.
Effect of regulations
According to the American Trucking Association's trends report for 2015, there are an approximate 3.4 million drivers moving an estimated 9.96 billion tons of domestic freight. Truckers are able to transport large amounts of important goods, such as food, televisions and clothes, in a timely matter. In fact, trucks account for only 14.2 percent of miles traveled, according to an American Trucking Association infographic. These vehicles are the lifeblood to the U.S. economy.
It is estimated the new regulations will add roughly $12,000 to $14,000 in tractor-trailer manufacturing costs. The EPA said these costs will most likely be recouped within 18 months. Despite that, one manufacturer in particular, Volvo vice president for government relations, Tony Greszler, told The New York Times he is still unsure of the proposal because the EPA has yet to tell manufacturers what the agency plans to do.
"In all, truckers haul about 12.9 trillion tons of freight annually."
Impact on smaller businesses
Despite the EPA's claims regarding increased truck costs, manufacturers have differing viewpoints on the regulation. Yandell told The New York Times he is concerned the costs may be too high for him to realistically abide by the regulations and is hesitant to believe how the EPA expects fuel efficiency to increase to 10 mpg.
"Talk is cheap, but I don't see how they get there," Yandell said.
Yet, a number of companies – including PepsiCo – recently sent a letter to the EPA urging them to continue developing fuel regulation standards. The letter said companies will save money as the demand for goods continues to increase.
Their letter ended with the signees urging the EPA and U.S. Department of Transportation to continue proposing fuel efficiency standards for medium and trucks throughout 2015.
Federal officials have reportedly been in talks with manufacturers to get a better understanding of what is achievable when it comes to fuel efficiency.
Regulations may have more impacts
The first Friday of June brought good news to the trucking industry. According to the newest U.S. Department of Labor's report, the trucking sector added 8,600 jobs throughout May. The report also upwardly revised totals from March and April. Overdrive Magazine said this positive growth may lead to the highest industry employment in eight years.
"The trucking sector added 8,600 jobs throughout May."
The current total is 3,500 jobs short of January 2007's high. This good news is a step in the right direction for an industry that has long faced a driver shortage. However, regulations demanding greater fuel efficiency must be balanced to ensure trucking companies can financially follow the rules. It may not be possible for numerous trucking companies to purchase new equipment and hire drivers to keep up with demand, which might decrease job growth.
It is not even summer and the trucking industry has already seen two important developments. Regulators want to increase the fuel efficiency of vehicles, but drivers and manufacturers are wary if new fuel-efficiency standards will produce results because of associated costs, especially now that driver employment seems to be on the upswing.