To stay square with the EPA, makers of big diesel engines have found new ways to curb the clouds of noxious diesel exhaust. But the low-emissions engines carry a high price.
It may be small comfort as you sit stalled behind an 18-wheeler in traffic, sucking soot down into your lungs from the clouds of diesel exhaust. But our air's actually getting cleaner all the time. Makers of big diesel engines have tinkered furiously with their products in the past few years to bring them into compliance with the first phase of the EPA's tough anti-pollution rules. And they've made real strides in getting the lead—or more precisely, the nitrogen oxide and particulates—out; nitrogen oxide alone is expected to be down a third from 1998 levels by the end of this year. Now they're gearing up to meet the next phase of the agency's aggressive timetable. With luck, Americans everywhere will be inhaling far fewer particulates and a lot less nitrogen oxide (NOx) by 2010.
But there's a price to pay for cleaning up this act. The new low-emissions engines introduced in October 2002 cost more than their predecessors—anywhere from $2,500 to $4,000 more per unit, according to Fleet Owner magazine. They also burn fuel more freely. And those are just the quantifiable concerns. What's really giving fleet operators the chills are the unknowns: Will the new engines need more frequent maintenance? Will they stand up to the day-in/day-out demands of real-world hauling conditions? Will they last as long as the older, non-compliant models?
The engine manufacturers themselves are unhappy about the uncertainties, but they point out that they've had to meet what they consider a tough set of standards in a very short time. The first phase of the EPA's rules, which called for lowering both NOx and particulates (soot), were originally set to take effect in 2004. But as part of a $1 billion 1998 settlement arising from an EPA "enforcement action" against engine makers for alleged testing irregularities, "several engine manufacturers had to sign a consent decree with the EPA to move the standards ahead to 2002," explains Bill Gouse, vice president of engineering at the American Trucking Associations (ATA), based in Alexandria, Va.
Moving up the deadline meant scaling down the testing. And that's what worries truckers."While we supported the 2004 standard," says Gouse,"we weren't able to test the product as we would have liked in time for the 2002 pull ahead, so there were a lot of concerns about the new engines." Adds Tom Freiwald, senior vice president of marketing for Detroit Diesel, "We worked closely with the EPA and we wanted the new engine introduction process to go as smoothly as possible. But the truck manufacturers and their customers would have preferred to test the technology before it was int roduced. They usually get two years to do this, and that didn't happen this time."
Not ready for prime time?
Given the time constraints for compliance, most manufacturers opted to outfit their engines with cooled exhaust gas recirculation (EGR) hardware to cut NOx emissions. Under this system, much of the exhaust stream is recirculated, cooled and then reintroduced into the combustion chamber, where it's burned off.
The fix was quick, as fixes go, but it's also somewhat experimental. Because this technology's largely unproven, many fleet owners fear that the engines' longevity may be compromised. "We'd like to stay on the same [engine] life cycle of about 800,000 miles," says Steve Duley, vice president of purchasing for Schneider National of Green Bay, Wis."Logic would tell you that with the new technology, the new engines won't last as long, but right now it's too early to tell."
Another concern has been the amount of maintenance the low-emissions engines will require,though the manufacturers downplay this one."The standard used to be oil changes at 15,000 to 25,000 miles, although changes with our engines were typically at 35,000 miles," says Tom Kieffer, executive director of marketing at Cummins, based in Columbus, Ind. "With the new engines, we recommend changing at 25,000 miles, which is still above standard."
But Gouse says that this one's too early to call."In some of the new engines,exhaust is cycled back into the oil,so the oil must do more work," he reports. "So we really don't know yet how this will play out."
Perhaps the truckers' biggest concern has been fuel economy. The EGR technology is said to cut fuel efficiency anywhere from 3 percent all the way to 15 percent, depending on who you talk to."This is the first time we've had a reduction in fuel economy from new engines," Gouse notes.
Freiwald of Detroit Diesel counters that the engine manufacturers are continually working to improve fuel economy, and the industry can expect improvements in this area in the future. "We have to be sensitive," he says. "The fuel economy issue hasn't been as bad as people had predicted, but it is a loss." In fact, Freiwald believes that as a whole,the en gines have perform ed mu ch bet ter than pred icted . "People who tried to get the standard delayed based their arguments on the worst-case scenario," he says. "The issues were unknown then," he says, "but most of them haven't come to fruition."
Rush delivery
Those assurances apparently weren't enough for fleet operators, however. Many hastily revised their spending plans last year and pre-bought trucks equipped with engines made prior to the October 2002 deadline. Ann Arbor, Mich. -based Con-Way Transportation Services, for instance, pre-bought all of its truck needs for 2003. Con- Way,which operates three regional less-than-truckload carriers that provide service across the United States, bought 400 new trucks before the October 2002 deadline kicked in, forestalling the need to purchase any trucks in 2003. "And we're not planning on buying any in 2004 either," says Doug Stotlar, COO and executive vice president for the company. "Our concern was that when technology changes this quickly, it's not given an adequate test period."
Schneider National, based in Green Bay, Wis., also prebought tractors. "There weren't any engines available for testing to help us make a decision about the technology," says Duley. "We did our best to help delay the standard, but that didn't work."
Schneider bought about a third more trucks than it normally would have for 2003 in advance of the new standard. Since that time, the company has also purchased 50 trucks with the new engines to begin testing their performance and will start adding some of the trucks to its fleet in the coming months.
This spike in demand disrupted operations not only for the engine manufacturers, but for the truck manufacturers as well. Many had to go from one or two shifts to three on short notice in order to meet the sudden demand for vehicles equipped with the pre-standard engines.
Yet most of the engine manufacturers insist they were able to weather the pre-buy storm as well as the ensuing sales drought. "There was about a two- to three-month drop-off," admits Kieffer of Cummins, "but it wasn't as significant as had been predicted. We're at or exceeding our plan for market size at this point in the year."
Too much, too soon?
Fleets won't be able to put off equipment purchases indefinitely, however; at some point, they'll have to make the switch. And when they do, they'll have to choose between two competing technologies. Two of the Big Three engine manufacturers—Cummins and Detroit Diesel—met the 2002 EPA standard by adding EGR technology to their new engines; the third, Caterpillar, took a different route, developing advanced combustion emission reduction technology (ACERT) . But because it has only recently been able to put its ACERT technology to work in its engines, Caterpillar has had to pay fines for its out-of-compliance engines in the interim.
Yet Caterpillar dismisses the fines, which averaged $3,000 per engine, as a small price to pay for the added development time."We knew we couldn't have the ACERT technology available in time for the 2002 deadline," says spokesman Carl Volz. "But the ACERT technology is revolutionary and will certify our engines in time for the next deadline."
That will come in 2007, when the final stages of the EPA's anti-pollution mandate start to kick in. The 2007 standards, which focus on further reducing NOx and particulates, have the fleet owners seriously worried. According to Stotlar, none of the engine manufacturers has yet been able to demonstrate a clearly delineated strategy for meeting the stand a rds even though they must be ready for testing the new technology by 2004.
At this point, the industry's best hope for meeting the NOx limits appears to be installing an aftertreatment device known as an adsorber. But that won't be cheap. Stotlar of Con-Way estimates the cost of installing NOx adsorbers on engines at anywhere from $4,000 to $15,000 apiece, and he predicts another large equipment pre-buy prior to 2007. "Those buying and using the engines will have to pass that cost along to the consumer," he says."We support clean air," adds Duley of Schneider."But these standards are too much to absorb, too quickly."
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."