Reducing the Operating Costs of Truck Transportation

Stephen DeAngelis

August 17, 2011

The cost of a gallon of diesel fuel remains high and it doesn’t look like prices will be reduced dramatically any time soon (if ever). That fact has started a lot of people thinking about what can be done to keep truck freight costs in check. Keeping trucking costs as low as possible is important because it has been estimated that “trucks haul about 70 percent of the tonnage carried by all modes of domestic freight transportation.” [“Trucking and the Economy,” American Trucking Associations, 2007-2008 edition] The same report claims that because so many supply chains have evolved into “just-in-time/on-demand inventory” networks that “the manufacturers, wholesalers and retailers who represent trucking’s largest customers have found that trucks are best suited to satisfy their transportation needs.”

The first place one naturally looks to reduce truck operating costs is to the truck itself. Back in 2007, PACCAR and Eaton Corporation announced that they had entered into an agreement to jointly develop proprietary hybrid technology for heavy-duty commercial vehicles in North America. Their announced goal is improving vehicle fuel efficiency by 30% “for selected medium duty applications over the next seven years.” [“Hybrid Truck technology hopes for 30% improvement in fuel efficiency,” Gizmag, 24 August 2007] PACCAR manufactures commercial vehicles sold around the world under the Kenworth, Peterbilt and DAF nameplates. The PACCAR website indicates that “engineers at its technical centers are utilizing sophisticated simulation technologies and rapid-prototyping processes to develop several hybrid vehicle platforms across a variety of applications.” In October 2008, “Navistar unveiled its new hybrid truck configuration – the International® DuraStar Hybrid tractor. The Class 7 International DuraStar Hybrid tractor has the capability to provide fuel savings from 20-25% on a standard in pickup and delivery applications.” [“International Presents its New DuraStar Hybrid Tractor,” Infrastructures, October 2008] I’ll dedicate a couple of future posts entirely to the subject of fuel-saving commercial delivery vehicles designed for use in urban environments.

While PACCAR and Navistar are looking at hybrid engines to achieve significant fuel savings. A researcher at the Lawrence Livermore National Laboratory named Kambiz Salari believes that truck design can also make a big difference. [“Kambiz Salari and the Aerodynamics of Trucks,” by John Tozzi, Bloomberg BusinessWeek, 14 July 2011]. Tozzi reports:

“Trucks waste a lot of energy overcoming the drag created by their boxy frames. Designing sleeker big rigs, though, is harder than designing sleeker airplanes given that cargo containers can’t be anything other than rectangular. Kambiz Salari puts the challenge this way: ‘Here is a box, and you have to somehow make it more aerodynamic, but it’s still a box.’ Salari … has spent the last decade figuring out ways to make trucks slice through the air more gracefully. His research meshes with a new national imperative: The Energy Dept. awarded $115 million in grants last year to develop ‘super trucks’ that are 50 percent more fuel efficient by 2015. Salari says we can get part of the way there—a 17 percent efficiency gain—by making relatively modest tweaks to a truck’s contours.”

Add a 30 percent improvement gained by using hybrid technology to a 17 percent improvement gained through better streamlining and you’re at 47 percent. That’s not bad. Tozzi continues:

“An expert in the field known as computational fluid dynamics, Salari uses software to simulate the flow of air across a truck’s exterior. Certain areas, such as the underbody or the gap between the trailer and the cab, cause a lot of resistance, but even the ‘grab handles’ that drivers use to climb into their seats create drag. Salari’s complex models take days to compute, even using Livermore’s supercomputers. The simulations help Salari’s team zero in on the most promising design modifications, which they then test in the world’s largest wind tunnel, at NASA’s Ames Research Center in Silicon Valley. One product they’ve tested is the ‘truck skirt,’ a pair of flat panels that drop down from the sides of the truck to redirect air away from the underbody. Skirts have been available for years, but many truckers question whether they work. Salari’s research proves they do. Over the next 18 months, he expects to publish more such conclusions to help trucking companies evaluate products on the market and design new ones.”

Tozzi reports that improvements suggested by Salari’s research “could save the shipping industry 6 billion gallons of diesel and $24 billion a year.” Tozzi concludes:

“Andrew Smith, founder of ATDynamics, says Salari’s work helped ‘us to write a business plan.’ His company makes a large attachment that fits on the back of a trailer and reduces the vacuum behind a truck. Salari, who emigrated from Iran as a teenager, says he’s been fascinated by the complexities of air flows since his undergraduate days at the State University of New York at Stonybrook. After earning a mechanical engineering PhD at the University of New Mexico, he studied such air-flow topics as how hypersonic jets fly and how explosions affect fluids. To Salari, making sleeker tractor trailers is just as fascinating.”

Another thing that people have been considering for long-haul trucks is using natural gas rather than diesel fuel. Jeffrey Ball writes, “An 18-wheeler can burn as much fuel in a year as 40 cars. What if it burned domestic natural gas instead of imported oil?” [“Natural-Gas Trucks Face Long Haul,” Wall Street Journal, 17 May 2011] Ball continues:

“The typical semi-trailer truck guzzles 20,000 gallons of diesel annually and uses the same roads day after day. So switching trucks to natural gas from diesel, which comes from oil, could make a big dent in U.S. petroleum use. And it wouldn’t require building nearly as many new fueling stations as switching America’s roughly 240 million cars and light trucks to something other than oil. Like all roads to a potential alternative-energy tomorrow, however, this one is strewn with potholes. A world in which most 18-wheelers run on natural gas instead of diesel is ‘going to be pretty slow in coming,’ said Bill Graves, president of the American Trucking Association. For years, environmentalists have lobbied for taxpayer subsidies for natural-gas cars and trucks, arguing the fuel burns cleaner than gasoline or diesel. They have had limited success—notably in smoggy Southern California—getting regulators to prod bus and trash-truck operators, owned or contracted largely by municipalities, to make the change. Often, buyers of these natural-gas trucks have received government subsidies that have helped defray the higher purchase price.”

Clearly, the political climate has turned against government subsidies. If natural gas-powered tractors are going to become a significant portion of the America’s truck fleet, they will have to join the fleet on merit not subsidies. With “U.S. natural-gas prices to historic lows,” arguments favoring natural gas-powered vehicles can be reasonably made. Ball reports, “Where natural gas is available at U.S. pumps today as a motor fuel, it typically costs about two-thirds the price of diesel after adjusting prices for the different energy contents of the two fuels.” He continues:

“Exact figures for the number of natural-gas vehicles on the road are hard to come by. But James Harger, chief marketing officer of Clean Energy Fuels Corp., an installer of natural-gas fueling stations that is partly owned by billionaire investor T. Boone Pickens, estimates 15% of U.S. buses and trash trucks run on natural gas. … If America could affordably manufacture natural-gas trucks and build enough fueling stations to keep them on the road, the economy could shave billions of dollars a year in imported-fuel bills, backers of the technology say. But that is a big if. Trucks configured to burn natural gas cost more than trucks that run on diesel. They need modified engines and bigger and stronger fuel tanks. How much more they cost differs wildly depending on the type of truck.”

Ball indicates that “long-haul trucks present a bigger challenge” than other types of trucks that use natural gas. He explains:

“In the U.S., they consume about 10 times as much diesel as trash trucks and buses combined. The biggest guzzlers are 18-wheelers, which average six miles per gallon. Some 225,000 were sold in the U.S. last year, but many analysts expect that number to soar to 400,000 this year, as the economy improves. United Parcel Service Inc., which runs one of the country’s biggest truck fleets, pays about $95,000 for an average long-haul ‘tractor’—the front part of the 18-wheeler, housing the engine and driver. It recently ordered 48 natural-gas versions at a cost of $195,000 apiece—about double the cost of a diesel model, said Mike Britt, UPS’s director of engineering and maintenance. Fewer than 1,000 natural-gas 18-wheeler tractors have been sold in the U.S., industry experts say. They are ‘just about being hand-built, much like a Rolls Royce,’ Mr. Britt said. Ramping up assembly lines to build them at volume, he thinks, could ‘lower the price dramatically.'”

Ball reports that “UPS bought its natural-gas trucks only after getting $4 million in federal stimulus money to help defray the cost. … UPS won’t buy more natural-gas trucks unless the government forks over additional subsidies.” He claims that “the experience of other countries suggests natural-gas vehicles sputter without long-running government aid.”

One final way of increasing efficiency is reducing weight. Cargoshell is trying gain ISO certification for its collapsible TEU container which is “25 percent lighter than a steel container, meaning significantly less energy would be required to carry every container on their estimated 200 million annual trips.” [“The Cargoshell: ingenious collapsible replacement for the standard shipping container,” by Mike Hanlon, Gizmag, 6 January 2010, and “Collapsible Cargoshell shipping container seeks ISO certification,” by Mike Hanlon, Gizmag, 26 July 2010]. In its collapsed state, the container also has a significantly reduced profile. The Cargoshell containers have roll-up doors versus traditional swing-out doors, which means they can be stacked closer together. There are, however, drawbacks. It takes one man approximately half-an-hour to expand or collapse the container. Considering the millions of containers used around the world, that represents a significant manpower cost.

The bottom line is that there are some very promising advances being made toward reducing the operating costs of trucks. That’s good news for supply chain professionals. The bad news is that many of these advances are not widely available.