By Mike Antich
For the first time ever, the price of diesel
in many regions of the country exceeds $4 a gallon. Since Jan. 1, diesel prices
have risen more than 19 percent. The American Trucking Associations (ATA) predicts
that truck fleets will spend more than $135 billion on fuel in 2008. This
compares to $112 billion in 2007. If the ATA prediction comes true (and there
is no reason to believe it won’t), the amount of money truck fleets will spend
on fuel in 2008 is the equivalent to the entire gross domestic product of Ireland!
I don’t know about you, but I find this incredible.
Overall operating costs for Class 3-6 trucks increased in calendar
year 2007 compared to 2006. Operating costs (which include fuel, repair, PM,
and tire expenses) promise to increase again in 2008 above the 2007 level. The
key reason for last year’s increase was a more than 3-cents-per-mile (CPM) jump
in fuel costs and a 4- to 7-percent increase in replacement tire costs. All major
tire manufacturers increased base tire pricing for fleets in 2007 and are continuing
to do so in 2008 to counter rising material costs.
In addition, the mandate to use ultra-low sulfur diesel (ULSD) has
increased the retail pump price of diesel. The increased cost of manufacturing ULSD
has resulted in an average of $0.06 per gallon increase over regular diesel. One
silver lining is the anticipated 3-percent decrease in mpg for the new
2007-compliant engines did not occur. According to most truck fleets, the new
engines have not experienced degradation in fuel mileage.
There has been an indirect impact due to high fuel costs in ancillary
services such as mobile fueling and towing. Many mobile and towing vendors
added surcharges to cover higher fuel costs.
Modifying Truck Specs
Fleets are actively looking for ways to minimize fuel spend.
Increasingly, they are looking beyond pump prices for fuel savings. One way to
reduce fuel expenditures is by modifying truck specs to increase
miles-per-gallon fuel economy. For example, fleets in certain industries are
making changes to their truck, upfit, and tractor specifications to help
improve fuel economy.
PHH Arval recently conducted a study that showed fuel costs can be
reduced by slightly over-spec’ing a truck.
Fuel economy was improved by as much as 0.3 mpg by slightly
over-spec’ing an engine to run more consistently in the “sweet spot,” choosing
a gear ratio low enough to suit a fleet’s application and location and enabling
the correct fuel-efficient, engine-specific parameters.
Likewise, GE Capital Solutions Fleet Services cites four areas to
consider when spec’ing trucks to improve fuel economy:
1. Truck transmission and
drive axle ratio: By gearing a truck so the engine is running at a slower
RPM at a given speed, less fuel is burned. This must be balanced with meeting
“startability and gradeability” requirements.
2. Engine horsepower and
torque: When taking advantage of the first point (gear fast, run slow), it
may be necessary to in-crease engine horsepower and torque to meet power
demands at lower RPMs.
3. Multi-torque or multi-horsepower engines: These engines run at
a lower rating when the driver is operating the throttle. When the cruise
control is engaged, the engine rating is increased to its higher rating. This
encourages a driver to use cruise control, which can save fuel over a
4. Drivers’ influence on fuel economy: Driver training, in-truck
displays, and telematics are used to modify driver behaviors.
Other specifications to decrease fuel expenditures include specifying
aerodynamic mirrors, moving air filters under the hood, dropping fender-mounted
mirrors, and installing in-cab electronics for drivers to monitor fuel economy
performance while driving.
Altering tire specifications is also being investigated, such as
using low rolling resistance tires. However, the best way to reduce tire and
fuel costs is to establish a process for drivers to regularly monitor tire
inflation. To control replacement tire costs, eliminate driver behaviors that
decrease tread life of the tires, such as speeding, excessive braking, driving
over curbs, and load distribution. Another cost reduction strategy adopted by
some fleets is the switch to retread tires and/or leasing tires.
A Multi-Prong Cost Reduction Strategy
Fleet managers are looking for relief in operating expenses by
identifying ways to counteract higher fuel costs. In addition to modifying
truck specs, fleets are also focusing on training drivers to drive for improved
fuel economy. For instance, a controllable fuel expenditure is the elimination
of unnecessary idling. States, such as California
and North Carolina,
are assisting in this effort by mandating idling limit devices. A growing number
of fleets are also researching, piloting, and implementing telematics solutions
to optimize routes and reduce idling.
In the final analysis, reducing fuel costs involves the adoption
of a multi-prong strategy. One important component in a multi-prong strategy is
modifying truck specifications. This practice has been verified to yield
measurable fuel reductions.
Let me know what you think.