There’s something wrong when the cost to comply with a piece of legislation could be $37 million a year. For one truck fleet. And that’s just for fuel. This is what FedEx Freight, the package giant’s LTL division, would expect to pay in incremental fuel costs if all of its 9,130 tractors were running engines that comply with the current diesel emissions standards laid down by the U.S. Environmental Protection Agency.
I cite this particular fleet because I happen to know some of its numbers. Dennis Beal, executive vice president in charge of physical assets at FedEx Freight, spoke at the Engine Emissions Summit during the annual meeting of the Technology & Maintenance Council in Florida last month (our coverage begins on page 46). In fact, since the EPA rules took effect for most engine companies in October 2002, Beal has bought only 758 new tractors. With at least 35,000 miles on the clock and as many as 175,000, their fuel economy is 15-per-cent worse than the trucks with the pre-October 2002 diesels.
Beal is hopeful that engine makers will develop more efficient engines between now and January 2007, when the next round of emission restrictions strikes. And who knows what those engines will bring in terms of performance and price? It’s possible that they won’t be any less efficient than the current motor offerings, but nobody’s saying. At this stage, nobody can.
Not surprisingly, Beal calls the costs associated with ’02 heavy-duty engines “horrendous.” But it’s not his father’s money so he was able to tell his tale to 1,100 Summit delegates without breaking into tears. I have to admit, though, that I got a little weepy just listening to him.
My $37-million figure is utterly theoretical, by the way. Assuming a fuel-efficiency rate of 6.0 mpg to start with (sorry, I don’t care what that is in litres per 100 km), a 15-per-cent degradation brings that to 5.1 mpg. Beal’s trucks do 2.3 million miles a day, and assuming fuel at an easy-to-compute $1.50 a gallon south of the border, the extra cost is $101,470 every 24 hours. The rest of the math brings you to $37 million. Scary.
Really scary, because that doesn’t account for the incremental cost of buying those engines: around $5,000 a pop. I’m too emotional to do the math there. You take over.
Let’s bring it home and way down the ladder to the individual Canadian owner-operator. Assuming 130,000 miles a year and the same fuel efficiencies, with fuel at 65 cents a litre, the math creates an operating-cost hike of about $11,300 every year. Know an owner-op who can absorb that? I sure don’t.
If all 40,000 or so Canadian owner-operators suffered the same fate, the total annual bill would be over $45 million. This isn’t unrealistic. One steel-hauling owner-op I know saw his fuel economy drop nearly 20 percent with an ’02 engine.
I spoke to a Canadian fleet manager at the Summit who reports a similar 20-per-cent slide. Assuming all 800 of his tractors sported ’02 engines, and that they all did 130,000 miles a year, the incremental cost would be around $11 million. Know a fleet that can absorb that? Again, I sure don’t.
My point is not to cause trouble and woe amongst engine makers, nor to point fingers at them (they’re blameless). Rather, I agree with those calling for a review of the real impact associated with the EPA’s bull-headed approach to environmental improvement. One that’s been matched by Canada.
By all accounts, the EPA did no deep and careful cost-benefit analysis of its emissions mandates before ploughing ahead, which verges on the criminal in my mind. At the very least, the agency’s superficial look at the impact on trucking was and remains callous and irresponsible.
Here’s what the EPA should do now: relax the ’07 emissions rules but stay with the low-sulphur-fuel mandate; offer tax breaks to fleets and owner-operators who buy anti-idling devices like auxiliary power units; and help fleets devise fuel-saving strategies such as route optimization and driver incentives.
Some of this is happening in Canada, but the equivalent effort in the United States is tiny and tax breaks for trucking non-existent.
Why, I have to ask, should truckers and engine builders bear the burden of cleaning our air alone?