North American fleets wage war on carbon

NACFE’s Mike Roeth outlines the most promising opportunities for increasing fleet efficiency - and doing so profitably

The fuel costs faced by the tractor-trailer industry have been swiftly and steadily rising over the past decade (Figure 1). By 2012, fuel costs had reached US$0.641 per mile, as reported by the American Transportation Research Institute, surpassing even the costs for the driver (wages plus benefits). These costs have driven all fleets to include fuel efficiency in their new equipment specifications and operational strategies, but many do not know where to start.

NAFCE-1In light of this trend, investment into proven technologies and practices that allow a truck or fleet to increase fuel efficiency – meaning that it can do the same amount of business while spending less on fuel – is a hugely promising option for the industry.

A compounding issue is the vast diversity of needs in the industry. These needs are driven by multiple, and sometimes seemingly, incompatible demands. The equipment must operate in differing duty cycles, driven by variations in operating locations (urban, rural, or a combination), geographies (mountainous/flat, hot/cold, etc.), access to capital and strategy for risk and even the business model of the fleet itself (lease vs buy equipment, use company drivers or independent contractors, in-house or contracted maintenance). These combine to create a significant challenge for end-users to determine what technologies to pursue and which companies to consider purchasing from.

NAFCE-2The North American Council for Freight Efficiency (, an emerging non-profit dedicated to doubling the efficiency of North American goods movement, is working in the industry to better identify and deliver the information needed for fleets to choose the best strategies for each of them. NACFE takes a data-driven and industry-sharing approach to use prior experiences and best practices of early adopters to accelerate the overall adoption of technologies that eventually will be purchased at high scale.

To better understand the history of adoption, in 2010, the Council created a best practices sharing methodology to document and learn from these early adopting fleets in order to provide an early roadmap for the industry on technologies to improve the efficiency of Class 8 tractor trailers. By the third, annual fleet fuel study completed, in mid-2014, data has been accumulated on the purchasing habits of 11 fleets, made up of over 41,000 tractors and nearly 130,000 trailers. Information gathered and shared includes the percentage of each year’s purchases that included 70 currently available technologies for lowering fuel consumption and the overall fuel efficiency of their fleets. With 70 technologies, 11 fleets and 11 years of data, this process provides nearly 8,500 data points of purchasing behaviour on new features with these end-users.

NAFCE-3This information allows the organisation to share some key insights with the industry. They include:

  • 108,000 miles per truck in 2013;
  • 3.1 trailers for every tractor;
  • Average age of tractors was 3.5 years and 6.2 years for trailers;
  • 15% of the tractors pull refrigerated trailers;
  • 11 years of adoption experiences for 70 technologies;
  • And the average mpg of all tractors in the study was 6.77, up 13% since the start of the study in 2011.

NAFCE-4Armed with this powerful dataset, much can be learned about the past and inferred to help forecast the future of these features to support a significant improvement in tractor trailer fuel efficiency. The opportunity is enormous: there are about 1.5 million tractor trailers operating in the US, consuming something like 26 billion gallons of diesel fuel. For every 1% reduction in fuel use, 260 million gallons of fuel, or about US$1bn per year are saved. A subset of the findings is now shared here. This includes a comparison of how the 11 fleets vary, an example of some adoption curves, the overall adoption rate compared to fuel consumption and finally the consistency of how the various technologies are adopted by these different fleets.

Fleet adoption diversity

As with nearly all consumed products, from business-to-consumer or business-to-business, end-users tend to fall in different categories when new offerings become available. Some adopt early while others wait for them to experience the benefits and potential risks of being on the leading edge of new technologies. The 11 fleets in this study are no different. Fleets B, D and J can be considered as early adopters who have continued to expand their adoption, while E, I and K although later adopters have closed the gap to their more innovative counterparts. This may infer that as the fuel costs continue to rise, some end-users are more aggressively benchmarking and in some cases moving to adopt these new products earlier in the overall adoption experience of a given product.

Technology adoption curves

NAFCE-5Given the data provided, 70 technology adoption curves were created for these recognised potential fuel saving devices currently available on today’s NA tractor trailers. It is important to keep in mind that these charts show the adoption practice of only 11 fleets; although large, they represent about 2.5% of the overall trucks in NA. It also recognises each fleet as a single decision in the adoption calculation rather than by total volume of tractors or trailers procured. This does, though, provide a good new insight into not only the current level of adoption but in the ramp over the last decade. For example, the ramp up of purchase of trailer skirts to over 70% is the quickest current rate of all technologies.

NAFCE-6Fuel saved compared to technology adoption

Now that we understand directionally the uptake over time of these various technologies, many additional questions come to mind. What impact do these technologies have on the fuel efficiency of the trucks in the fleet? What is the payback on investment of each of these technologies? The list of questions goes on. The individual fuel efficiency of this fleet of tractors is shown below and is shaped rather like a bathtub. In the first third of this time period under study, 2003-2006, the impact of the introduction and purchase of EPA04 and EPA07 emissions level engines caused an overall decrease in fuel efficiency. In the second third, 2007-2010, procurement of new fuel economy technologies began to stabilise and overcome the degrading effect of the emissions engines. Finally, in the years 2011-2013, the fuel efficiency of this fleet improved from 6.34 to 6.77 mpg, a nearly 7% improvement. The study team also created a business as usual prediction, one that compares these fleets with a baseline fleet which only procured a few of the highest adopted technologies. Given this, these fleets are saving over US$7,200 per truck per year in fuel related to a fleet which is not buying these technologies. A basic analysis was conducted on the payback of the technologies that provide the majority of the savings for these fleets. That review determined a paynack for these technologies of about three years.

Fleet consistency of adoption

Finally, the consistency of adoption by the various fleets was evaluated. Here, each of the 70 technology decisions by each of the 11 fleets is compared using a categorisation methodology showing whether the technology is being purchased by the fleet, how quickly it increased to 100% of all purchases or even if that fleet decided to stop buying them. When stacked by the most popular, other fleets now have a roadmap of technologies that should be considered and ones that possibly should be analysed more deeply. Also, they can compare themselves to some of these fleets to better understand which ones are most applicable to their needs.

In conclusion, new technologies are becoming much more available to improve tractor trailer efficiency, but this poses both opportunities and challenges. Each fleet must determine the best set of solutions for its individual needs, and this study data can assist them in doing so. Doing nothing and losing ground in fuel cost competitiveness to other fleets is not an option.

This article was first published in the Q2 2014 issue of Automotive Megatrends Magazine. Follow this link to download the full issue