By Mike Antich
For the first time ever, the price of dieselin many regions of the country exceeds $4 a gallon. Since Jan. 1, diesel priceshave risen more than 19 percent. The American Trucking Associations (ATA) predictsthat truck fleets will spend more than $135 billion on fuel in 2008. Thiscompares to $112 billion in 2007. If the ATA prediction comes true (and thereis no reason to believe it won’t), the amount of money truck fleets will spendon 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 calendaryear 2007 compared to 2006. Operating costs (which include fuel, repair, PM,and tire expenses) promise to increase again in 2008 above the 2007 level. Thekey reason for last year’s increase was a more than 3-cents-per-mile (CPM) jumpin fuel costs and a 4- to 7-percent increase in replacement tire costs. All majortire manufacturers increased base tire pricing for fleets in 2007 and are continuingto do so in 2008 to counter rising material costs.
In addition, the mandate to use ultra-low sulfur diesel (ULSD) hasincreased the retail pump price of diesel. The increased cost of manufacturing ULSDhas resulted in an average of $0.06 per gallon increase over regular diesel. Onesilver lining is the anticipated 3-percent decrease in mpg for the new2007-compliant engines did not occur. According to most truck fleets, the newengines have not experienced degradation in fuel mileage.
There has been an indirect impact due to high fuel costs in ancillaryservices such as mobile fueling and towing. Many mobile and towing vendorsadded 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 toreduce fuel expenditures is by modifying truck specs to increasemiles-per-gallon fuel economy. For example, fleets in certain industries aremaking changes to their truck, upfit, and tractor specifications to helpimprove fuel economy.
PHH Arval recently conducted a study that showed fuel costs can bereduced by slightly over-spec’ing a truck.
Fuel economy was improved by as much as 0.3 mpg by slightlyover-spec’ing an engine to run more consistently in the “sweet spot,” choosinga gear ratio low enough to suit a fleet’s application and location and enablingthe correct fuel-efficient, engine-specific parameters.
Likewise, GE Capital Solutions Fleet Services cites four areas toconsider when spec’ing trucks to improve fuel economy:
1. Truck transmission anddrive axle ratio: By gearing a truck so the engine is running at a slowerRPM at a given speed, less fuel is burned. This must be balanced with meeting“startability and gradeability” requirements.
2. Engine horsepower andtorque: When taking advantage of the first point (gear fast, run slow), itmay be necessary to in-crease engine horsepower and torque to meet powerdemands at lower RPMs.
3. Multi-torque or multi-horsepower engines: These engines run ata lower rating when the driver is operating the throttle. When the cruisecontrol is engaged, the engine rating is increased to its higher rating. Thisencourages a driver to use cruise control, which can save fuel over adriver-controlled throttle.
4. Drivers’ influence on fuel economy: Driver training, in-truckdisplays, and telematics are used to modify driver behaviors.
Other specifications to decrease fuel expenditures include specifyingaerodynamic mirrors, moving air filters under the hood, dropping fender-mountedmirrors, and installing in-cab electronics for drivers to monitor fuel economyperformance while driving.
Altering tire specifications is also being investigated, such asusing low rolling resistance tires. However, the best way to reduce tire andfuel costs is to establish a process for drivers to regularly monitor tireinflation. To control replacement tire costs, eliminate driver behaviors thatdecrease tread life of the tires, such as speeding, excessive braking, drivingover curbs, and load distribution. Another cost reduction strategy adopted bysome 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 byidentifying ways to counteract higher fuel costs. In addition to modifyingtruck specs, fleets are also focusing on training drivers to drive for improvedfuel economy. For instance, a controllable fuel expenditure is the eliminationof unnecessary idling. States, such as Californiaand North Carolina,are assisting in this effort by mandating idling limit devices. A growing numberof fleets are also researching, piloting, and implementing telematics solutionsto optimize routes and reduce idling.
In the final analysis, reducing fuel costs involves the adoptionof a multi-prong strategy. One important component in a multi-prong strategy ismodifying truck specifications. This practice has been verified to yieldmeasurable fuel reductions.
Let me know what you think.