Suppliers see opportunity in new heavy-duty truck rule

Note: This blog was originally posted in February 2014.

By Roger Kerson

Is environmental regulation bad for business? Not necessarily, say firms that supply the heavy truck industry, which is now gearing up for new fuel standards recently announced by President Obama that will reduce truck emissions and increase fuel efficiency.

Major domestic auto parts suppliers like Eaton are making components that help truck manufacturers meet requirements for heavy trucks issued in 2011 by the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA).

While these components save truckers fuel, they’re also benefiting businesses and creating jobs across the auto industry.

“We view regulation as beneficial for our business,” says James Michels, manager of business communications for the Eaton Vehicle Group. “It allows us to showcase our innovation. We’re very involved in helping our customers achieve compliance with new regulations through new technologies, and new ways of looking at longstanding common components.”

Eaton makes automatic transmissions that use microprocessors to ensure vehicles operate in the most efficient gear range. Using Eaton’s new transmission, companies report efficiency gains as high as 1.5 miles per gallon – a significant improvement, since 18-wheel tractor trailers typically achieve just 6.5 miles per gallon.

The federal Heavy-Duty National Program – the first-ever mileage and emissions regulations for large-scale vehicles – covers model years 2014 through 2018 and requires annual improvements for tractor trailers, delivery vans, construction trucks and other vehicles, depending on size and weight. The initiative is projected to reduce U.S. fuel consumption by 530 million barrels of oil and save truck operators $50 billion in fuel costs during the five years the regulations are in effect.

In February 2014, President Obama announced a timetable for a second round of regulations, which will require further improvements for trucks built in 2019 and beyond.


Photo courtesy of Bailey Trucking

Stakeholders weigh in

Eaton isn’t the only company whose business benefits from fuel efficiency standards. Mitch Greenberg is the chief commercial officer for SmartTruck Systems, a Greenville, S.C.-based company that sells an aerodynamic foil that fits underneath the body of the 48- to 53-foot trailers used by long-haul truckers.

Greenberg said that by improving air flow and reducing aerodynamic drag, the company’s foil, called UnderTray, delivers fuel efficiency gains of as much as 5.5 to 10 percent.

A truck without aerodynamic enhancements operates as if it were carrying a huge parachute in back of the vehicle, Greenberg said. Uncorrected air flow creates a low-pressure zone that, in effect, pulls the truck backward.

Founded by engineers from the aerospace and motor sports industries, SmartTruck Systems is just three years old. But state-level fuel standards have quickly led to an increase in demand for its fuel-efficient foils.

For example, greenhouse gas regulations adopted by the California Air Resources Board (CARB) require all trucks entering California to be equipped with aerodynamic improvements for their trailers. Since most large truck fleets do business in California, a hub for U.S. domestic and international freight, UnderTray and other aerodynamic products are in high demand.

Smart Truck chart

Courtesy of SmartTruck Systems

Growing sales, growing jobs

So far, SmartTruck Systems has sold 35,000 UnderTray installations. The company’s staff handles research and development, prototyping, design, and sales. Manufacture of the polyethylene foils is sourced to companies in Georgia and Oklahoma, supporting additional jobs. The company also buys components from more than a dozen metal fabricators and metal coating companies in and around Greenville.

While current federal truck regulations for 2014 through 2018 don’t cover trailers – instead focusing only on improvements in tractors and engines – that may change down the road, and new federal regulations could create even more demand for aerodynamic products.

“There’s a consideration,” says Greenberg, “to include trailers in what they’re calling the Phase 2” of heavy-duty truck regulations. “Our opinion would be that a program would make sense, provided that the return on investment for the fleets are sensible.”

Pushing new, costly technologies too quickly, he points out, means that many operators will avoid purchasing new equipment and leave older trucks on the road for longer, with no gain in fuel efficiency.

“EPA and NHTSA do a good job of that, a good balance of pushing the envelope [while allowing for] an appropriate rate of fleet turnover,” he said.

Greenberg said the truck industry is going to see a dramatic increase in innovation in coming years.

“There are regulatory drivers, coupled with the expected price of diesel fuel. Fuel is the number one cost for fleet operators, so they have every incentive to improve,” he said.

Greenberg said his company plans to participate in the next round of rule-making.

“We’ve talked with EPA,” he said. “EPA and NHTSA have done a good job in communicating with all the stakeholders, making sure we know the lay of the land.”