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February 4, 2008 7:45 AM, EST

Fleets Weigh Competing Technologies as New Emission Standards Loom

By Jonathan S. Reiskin, Associate News Editor
This story appears in the Feb. 4 print edition of Transport Topics.

Truck buyers for some of the nation’s largest fleets are already contemplating their choices for the January 2010 generation of heavy-duty truck engines. Their challenge is matching the original equipment manufacturers they like with one of the two main technologies upon which the OEMs will rely.
Except for products from Caterpillar Inc., all engine OEMs use exhaust gas recirculation to meet the 2007 federal regulations to limit nitrogen oxides and particulate matter. For the even-tighter 2010 standards, the choice will be between a new generation of EGR and selective catalytic reduction, an approach that started in Europe and uses the nitrogen-based organic compound urea in the aftertreatment process.
In recent interviews with Transport Topics, fleet buying executives were unanimous in their eagerness to get test vehicles to drive.
Bestway Express, a dedicated contract carrier from Vincennes, Ind., summarizes the dilemmas involved. Company President Shepard Dunn said:
“Our main provider of trucks and engines, Volvo [Trucks North America], has a solution, but it’s based on the European model — urea spray. Evidently, it does fine in Europe, but there is no network for distri-bution of this product in the United States. So, we’re not sure of what they are planning on, if they cannot resolve that major issue.
“Our approach in the past was to dodge the bullet. Let the big guys take the financial hits on being the guinea pigs,” said Dunn. “My guess would be the same approach for 2010, that is, pre-buy,” he said, referring to the practice of buying lots of trucks ahead of a regulatory change and then hardly at all immediately afterward.
Con-way Inc. walks both sides of trucking’s great divide. Con-way Freight is the nation’s third-largest less-than-truckload carrier, and Con-way Truckload, based on what was Contract Freighters Inc., is also a substantial carrier.
In simultaneous telephone interviews, Mike Grima, director of fleets for Con-way Freight, and Bruce Stockton, vice president of maintenance and asset management for Con-way Truckload, said they like sharing testing notes, but they are headed in opposite directions, come 2010.
“The truckload and LTL worlds are completely different animals,” said Grima. “We have a longer life cycle on our trucks. Our linehaul tractors are all Class 8, but we use some Class 7 in pickup and delivery. Some of our heavy-duty vehicles that do both applications can run 24 hours a day.”
The LTL division also has built and relies upon Con-way’s network of more than 400 North American truck terminals. All of Grima’s trucks return to a terminal at the end of every shift, whereas Stockton’s truckload vehicles return far less often.
“In a truckload fleet, the less complex an engine is, the better it is. If we have the option not to select SCR, we would like to do that,” said Stockton.
Stockton, who came to Con-way from CFI, said his division will take possession this year of 140 Kenworth Trucks powered by Cummins ISX engines. He said he is also very interested in Freightliner Trucks’ new Cascadia model but hopes there is a way to get it with EGR rather than SCR.
Freightliner is the North American flagship of Daimler Trucks, the world’s largest truck maker and a leading proponent of SCR.
Grima said he will be able to maintain his association with Sterling Trucks, also a Daimler brand, which uses Detroit Diesel Corp. engines. While SCR is new in North America and is more complicated than EGR, early reports say its advantage will be that it gets better mileage.
“We did do a pre-buy in 2006 to avoid 2007s, but if what we’ve heard about fuel and SCR is true, we won’t do a pre-buy in 2009 to avoid 2010s. We’ve been hearing there’s a 5% increase in mileage, and we want that,” said Grima. He added that Con-way managers are already at work figuring out how to store urea at their terminals.
Although generally optimistic about SCR, Grima was quick to acknowledge a substantial list of challenges that accompany the new system.
“Two-thirds of the urea solution will be water, so the tank that holds it will need to be heated,” he said. But Grima said he also thinks Daimler engineers from Germany and Volvo engineers from Sweden should know how to operate in the cold.
Yet, he does not anticipate that SCR will sweep the nation in a month or even a year.
“What will be the aggregate population of SCR-equipped trucks in 2010? It might not be anything you would see on the radar screen, compared with 2020. Demand for urea will be small at the outset. I think this will be more of a ramp-up process rather than a sudden switch to ‘on,’ ” Grima said.
FedEx Freight is an even larger LTL than Con-way, second only in size to YRC Worldwide, and Dennis Beal, vice
president of physical assets, came to the opposite conclusion. His Memphis, Tenn., carrier did not pre-buy in 2006 and is very much interested in EGR rather than SCR.
“We’d prefer not to deal with SCR and liquid urea,” Beal said, citing concerns over freezing and the stuff’s availability.
“Based on what we know today, we’ll go with a non-SCR approach. But what will this be like in two or three years? We don’t know.”
Beal manages 15,000 tractors for FedEx’s regional and longhaul LTL divisions. Even though Volvo is also a leading proponent of SCR, Beal said he is inclined toward Kenworth and Volvo trucks that will be spec’ed with Cummins’ EGR engines. Beal cautioned that his current observations are not final decisions.
“It’s still very early in the process. It’s not too early to be thinking about it, but we really don’t know now.”
Beal said there are several reasons FedEx shuns pre-buys, and one of them is that actual operations can differ from worries voiced early in the production process.
Comparing the more than 500 tractors FedEx Freight bought in 2007 with early models from the 2002-06 generation of tractors, Beal said his mileage is 5% to 6% better.
“We were surprised; we weren’t expecting that,” he said.
“We’ll get the trucks we need, when we need them. This also helps us do right by the environment.” If the carrier were to pre-buy, he said, either FedEx would have unused trucks sitting or he would have to sell good equipment very early, and both of those options are unpalatable.
“We don’t want that,” he said.
Beal said the company buys 1,000 to 1,500 trucks a year, and sometimes more if the economy is booming. Given the current state of affairs, though, buying more trucks is not the case this year.
Beal said he likes this approach because he’ll be ahead of the curve on learning the subtleties of the new engines, compared with carriers that pre-buy.
“Every group of engines has a personality, almost. This serves us well.”
He also said his company is inclined to “stick with the manufacturers we know and with whom we are well acquainted, but we’ll test all of them.”
The smaller number of LTL carriers have some of the best-known names in the industry, but the strong majority of trucking companies are truckload carriers, where obsessing about tractors is a way of life.
Steve Duley, vice president of purchasing for Schneider National, Green Bay, Wis., has spent much of this decade worrying about what happens to engines when federal regulations change.
“The last two regulatory changes [October 2002 and January 2007] have been problems — not just in terms of cost but also the reliability of the engines.
“We’ve thought quite a bit about this already and met with our suppliers. We’ve been asking, ‘What are our options, and what has been the progress for 2010?’ ” said Duley.
“We’d like not to use SCR but would use it if there is a high cost associated with EGR. We’ve made no final decision yet, and we hope to get a few trucks in so we can validate what has been said. We’ll run some of each type [SCR and EGR] before buying in large quantities.”
Marty Fletcher, director of equipment research and development for U.S. Xpress Enterprises, said that, while engines are tremendously important, they are just the beginning of the issue for the Chattanooga, Tenn., carrier.
“We’re having two test units built that should be ready in mid-January, and we’ll consider more during the year,” he said about the Detroit Diesel Corp. 15-liter DD15 models without SCR he is expecting.
“This will give us some good data on durability and reliability,” Fletcher said. “When you get serious downtime on new components, that is what causes trouble.”
“This means we’ll be getting test trucks almost two years in advance of the changeover,” he said. “That’s good notice, but we really do need at least a full 18 months of operations to test an engine. You need to have both the tractor and the engine broken in.”
Beyond the engine, a truck needs break-in time for the driveline, wheel-ends and other systems because a new truck is a stiff truck, Fletcher said. “Once you get past 70,000 miles, you’ll see some mileage improvements.”
“You have to reduce the rolling resistance from the initial point. You also want to go through at least 12 months from a climactic view, too,” he said, explaining that the change in seasons also affects performance.
In addition to the DD15s, Fletcher said he will test Volvo tractors, some with engines from Cummins and others from Volvo Powertrain. Leaving no stones unturned, he also said U.S. Xpress Enterprises will be looking into Kenworths and Peterbilts from Paccar Inc. and International’s ProStar model.
“We’re searching for the best partners now, and then we want to narrow it eventually to two OEMs. If Cummins can do it [meet the 2010 EPA emission standards] without requiring additional substances, meaning urea — if you don’t have to fool with that, then it would seem like a positive thing to me.
“But if SCR gets you more fuel efficiency, that might be a better trade-off,” Fletcher said, showing what his agenda will look like in coming months.
Duley said Schneider once again will “pre-buy but not to the same degree as with the ’07 change. We won’t do it as heavily in ’08, until we see a recovery in freight. We’ll buy our normal 1,500 to 2,000 trucks a year in 2008 and ’09.
“We’ll keep our fleet age reasonable and reduce it by the end of 2009 with a mild pre-buy. We’d prefer not to have these large cyclical fluctuations, but we’re concerned with reliability and costs. While a steady state of purchases would be better, we’re glad that we did those pre-buys.”
Duley said he does not consider this preparation for 2010 to be a battle between motor carriers and OEMs.
“Manufacturers have done an excellent job on this, but there are a lot of issues going on here,” he said.
Looking back at 2002, he said, “A lot of components had to change, and there was a substantial amount of retrofitting. The predictions then were for a fuel-economy loss of 3% to 4%, and that’s precisely where we came in.”
Staying within the 2002-2006 generation of tractors, Duley said, the December 2006 trucks got 3% less mileage than did the September 2002 models, the last ones before the regulatory changeover that year.
“Also, the maintenance costs have been significantly higher. It costs 20% to 30% more to maintain them, compared with the pre-2002 vehicles.”
Bestway’s Dunn said, “Three to four years ago, I joked that, with the 2010 emission standards being so difficult to hit, how were the OEMs even going to figure out how to get an engine to run, much less do it efficiently and within EPA standards? Here we are with 2010 engines now on the horizon — and still asking the same questions.
“I certainly hope the OEMs will get this figured out sooner rather than later, but we’ll all have to wait and see, won’t we?”