Increased Focus on Fleet Sustainability
Sustainability has been a buzzword for many industries over the past 20 years, and with good reason. As concerns increase about climate change and our economy’s fuel dependence, many in the trucking industry are beginning to take a serious interest. Heavy-duty trucks constitute the second-largest source of greenhouse gas emissions within the transportation sector (with passenger cars and light trucks as the largest source), and that number is not going unnoticed.
Roughly 29% of all U.S. greenhouse gas emissions come from the combustion of transportation fuel, and that does not even include emissions from production and refining.
When the entire cycle is considered, the emission figure rises to roughly 43%. Those numbers come from Projal Dutta, the New York Metropolitan Transportation Authority’s director of sustainability initiatives who was active in a 2014 Climate Leadership Conference in San Diego. The conference raised several important points about fuel emission. Denise Kearns from the U.S. EPA’s SmartWay program explained that commercial freight emissions have grown by 30%since 1990, and are expected to continue to grow 20% in 20 years.
The carrier focus on sustainability is crucial. While heavy-duty trucks account for just 4% of motor vehicles, but they create roughly 25%of the recorded carbon emissions. Many fleet managers are realizing that they have a responsibility to take mediating action, and are looking for new sustainable options.
New Possibilities and Sustainability Standards
Transportation fuel systems are seeing a number of emerging alternatives. Examples include natural gas, electric vehicles, unconventional oil, and synthetic drop-in fuels. Companies with a long term investment in the transportation industry must recognize upcoming changes in fuel solutions. The sooner companies take the initiative to research their options, the better. The Environmental Protection Agency (EPA) and the Department of Transportation (DOT) are expected to issue the next phase (Phase 2) of medium to heavy duty vehicle fuel efficiency and greenhouse gas standards by March 2016. A Notice of Proposed Rulemaking (NPRM) is expected by March 2015.
The government projects that the first set of sustainability standards issued in September 2011 has saved 530 million barrels of oil and saved owners around $50 billion in vehicle lifetime fuel costs. In fact, the new technology upgrades may financially pay off. A 2018 semi truck could see a total of $73,000 in fuel savings, essentially paying for technology upgrades and offering a more financially and environmentally sustainable purchase.
As the government pushes for higher sustainability standards, carriers will be forced to reevaluate their day-to-day methodology and long term options. Many carriers are turning to SmartWay, the EPA’s flagship program targeting sustainability efforts in the transportation supply chain industry. Established in 2003, Smartway Transport consists of partnerships, policy options, technical solutions, and research on ways of reducing greenhouse gases and optimizing transportation networks. Companies that participate use performance based reporting tools to benchmark carbon emission performance, publically demonstrating a commitment to sustainable business practices. Currently, SmartWay reports that 2,900 companies are involved in the program, and that number is expected to rise as interest in sustainability increases.
Environmental protection isn’t the only reason fleet owners should focus on sustainability. Fuel economy is one of the strongest motivating factors for cutting down on greenhouse gas emissions. Even with cheaper fuel costs, carriers are looking for emerging technologies and alternative fuels that will be more sustainable for the long term, while also being financially feasible.
The U.S. Energy Information Administration notes that diesel fuel prices decreased for 6 consecutive months through December 2014, falling to a monthly average of $62 a barrel, the lowest since May 2009. Prices reflect growth in U.S. oil production and international demand. The EIA predicts crude oil prices will average $58 a barrel in 2015. However, they note that future values have a very high uncertainty.
Despite the generally good outlook for cheap fuel, many in the industry are taking a more far sighted approach to reducing fuel consumption. There is an increased focus on exploring other cost saving techniques, even if they are not currently on the market. These include:
- Engine and powertrain efficiency improvements
- Aerodynamic devices
- Weight reduction
- Improved tire rolling resistance
- Automatic engine shutdown
- Accessory improvements (like water pumps, fans, auxiliary power units, air conditioning)
Natural gas is shaping up to be a fuel of high interest for the U.S. heavy Class 8 truck transportation sector, despite the recent drop in diesel prices. According to trucking industry research firm ACT Research, Class 8 is expected to constitute 23% of the units sold in 2025. Assuming the number of U.S. Class 8 truck and transit buses that year is 200,000, the number of those using natural gas would total 46,000. ACT notes that natural gas is cheaper and cleaner than diesel fuel, and is equally available. However, the transition to natural gas would require ongoing cooperation between shippers and truckers, meaning the move towards natural gas will be a slow and involved development.
As fleets move forward with an eye on sustainability, drivers and managers alike will need to be consistently updated on the latest technology and trends. The trucking industry is notoriously risk averse, avoiding change and often with good reason. Companies want to ensure they deliver goods on time as promised, and often this dedication to a job well done means putting off important and necessary future changes.
In the upcoming years, owners and managers are expected to take a more holistic approach to sustainability, approaching the issue through day-to-day driver action, and long term logistics and technology management. The sooner companies begin to research new sustainable practices, the easier it will be to make smarter low-carbon fuel investments.