Tuesday, March 20, 2018

Dealer spokesman: Next fuel-efficiency rules for trucks must hit ‘sweet spot’ of affordability, performance

Monday, August 10, 2015
No variable cost is more critical to truck dealership customers than fuel, American Truck Dealers Chairman Eric Jorgensen, told a federal regulatory hearing. (The Trucker file photo)
No variable cost is more critical to truck dealership customers than fuel, American Truck Dealers Chairman Eric Jorgensen, told a federal regulatory hearing. (The Trucker file photo)

WASHINGTON — Phase 2 truck and efficiency standards must be affordable and not compromise performance, Eric Jorgensen, chairman of the American Truck Dealers told a joint Environmental Protection Agency/National Highway Traffic Safety Administration at a hearing August 6 in Chicago.

What’s more, Jorgensen said, is that the rule be uniform across the United States and that “doing the rule right is more important than doing it quickly.

“Cleaner/greener new equipment will do nothing for the environment or for energy security until it is bought and placed into service, more often than not replacing older, less efficient equipment,” said Jorgensen, president of JX Enterprises, a multi-state medium- and heavy-duty truck dealership group located in Hartland, Wisconsin, which sells Peterbilt, Volvo and Hino trucks, Kalmar Ottawa tractors, and Paccar and Cummins engines. “Consequently, your goal should be to hit a regulatory sweet spot by setting performance standards that result in new products purchasers are willing and able to buy.”

No variable cost is more critical to truck dealership customers than fuel, Jorgensen said at the hearing.

“Consequently, the overwhelming majority of customers who order new vehicles from one of our stores put some focus on fuel economy performance,” he said. “To be sure, their primary focus is on those vehicle and drivetrain features they believe are essential to meet their specific work and duty-cycle needs. Nonetheless, although fuel economy performance will never rank first on a customer’s list of purchase decision criteria, it will always be near the top. In fact, given my customers’ relatively strong demand for fuel economy, it’s fair to ask what “market failure” is the administration trying to “fix” with its Phase II proposal?”

Cost will always be a concern when a carrier is purchasing new trucks. Jorgensen said, adding that while some carriers can afford to be “early adopters” of new technology, others can’t.

“The vast majority of prospective new truck buyers are businessmen and women who rationally pencil out the up-front cost of vehicle features, especially during times when credit is relatively tight and/or freight rates and profit margins are relatively low. In order to work, the fuel economy/GHG mandates being considered for model years 2018 and beyond must pass economic muster,” he said. “Remember, my customers have options. Instead of choosing to buy new cleaner/greener equipment, they can instead pay my service and parts operations to help them keep their existing vehicles on the road, up to and including re-building engines or vehicles. Alternatively, they can buy used trucks or tractors that meet their needs, at lower cost than equipment covered by new mandates. Any new mandates must be affordable to succeed in the marketplace.”

Jorgensen said he hoped that the industry learned with the roll-out of the tailpipe standards for 2002, 2007, and 2010, that any new fuel economy/GHG mandates must avoid compromising — or even appearing to compromise — the performance of new vehicles.

“Prospective customers will avoid like the plague vehicles they know or perceive will be less reliable or that will require more intense service, maintenance, and/or repair. Simply put, my customers will not invest in higher downtime rates,” he said. “In addition to higher operating costs, tractors and trucks that don’t move, don’t make money.”

Jorgensen reminded the regulators conducting the hearing that even in good years, when the economy is doing well, only a few hundred thousand potentially-regulated tractors, trucks, engines, and trailers are sold nationwide. This number pales in comparison to the 17-plus million light-duty vehicles that likely will be sold nationwide this year. Given this relatively small total volume of vehicles, any new Phase II mandates must truly be designed to apply nationwide, he said.

“In other words the American Truck Dealers believes strongly that allowing for multiple sets of non-identical mandates would impose an untenable burden on the R&D resources, the manufacturing processes and the marketing and distribution systems of tractor, truck, engine, and trailer manufacturers. Moreover, our customers operating in so-called California states should not have to worry about potential ordering complexities involving special vehicle configurations. The fact that the state of California presently requires some of my customers who run trucks into California to buy new trucks that comply with emissions standards different than those mandated by EPA has meant some must forego providing freight service inside California’s borders or engage in unnecessarily expensive strategies to satisfy their California customers.”

When ATD hears rumblings that California has signaled that it might go its own way on new NOx standards, might push for greater stringencies or tighter timeframes than what EPA is proposing for GHG emissions, or might propose tighter APU or minimum engine controls, it “makes us very nervous.

“Bottom line: there must only be one uniform national set of economically practical and technologically feasible fuel economy/GHG standards,” he said.

 The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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