Landmark emissions standards highlight efficiency potential in the domestic freight sector

Earlier today, the federal government heeded the call of a diverse group of fleet managers, independent owner operators, and environmentalists, announcing more efficient heavy and medium-duty trucks through a new standard projected to save 530 million barrels of oil and $50 billion in fuel costs over the lives of the vehicles covered.

These new standards require truck manufacturers to reduce fuel consumption and emissions of new tractor-trailers 5% each year between 2014 and 2018. To meet this requirement, truck manufacturers will use several currently available technologies including low-cost aerodynamic features, super-efficient wide-base single tires that replace traditional dual tire configurations, and efficient shifting mechanisms like automated manual transmissions.

The White House decision to allow truck manufacturers to meet fuel economy targets with a diversity of technologies is significant: this is the first time that any national government in the world has set efficiency standards for a full heavy-duty vehicle. Historically, regulations in both Japan and the U.S. only established emissions standards for heavy truck engines.

In contrast, today’s announced standards encompass the entirety of the vehicle.
This allows manufacturers to design the whole truck with efficiency in mind instead of focusing on small, incremental improvements to engine technology.

For example, investing in advanced wide-base single tires for a full tractor-trailer can improve fuel economy 10–12% over heavy trucks’ current 6 miles-per-gallon average. In comparison, spending the same amount of money on engine improvements may only yield a 1–2% fuel economy benefit.

The North American Council for Freight Efficiency (an RMI spinoff) is currently partnering with private fleets across the country to identify technologies like these with the greatest efficiency potential. This information will help future regulators make well-informed decisions based on real-world performance of heavy truck efficiency technology.

The impacts of the announcement will be felt differently across each segment of the domestic freight sector. Some private fleets like those operated by Walmart or other major retailers already had the capital and the incentive to invest in the various efficiency technologies that will proliferate under the new ruling.

But, these fleets only move about 20% of truck ton-miles in the U.S. About 540,000 independent contractors—individuals operating on thin profit margins with severe capital constraints—are responsible for most of the rest. This segment of the industry stands to benefit greatly (especially over the long run) from the ruling.

Since manufacturers will now be required by law to provide more efficient market offerings, independent for-hire drivers will soon have no option but to purchase higher efficiency trucks capable of saving hundreds of thousands of dollars in fuel costs over the vehicle’s lifetime. Moreover, with fleets and independents purchasing increasing numbers of advanced, efficient trucks, manufacturing costs will decrease as truck companies produce more units at scale.

Even without policy, escalating energy costs and competitive market forces will continue drive the U.S. transition off of fossil fuels—especially within the domestic freight sector. However, smart policies like today’s announced standards will help to accelerate this transition.