Those looking for a glimpse of the future of trucking could do worse than to study the idle reduction marketplace today. It has become a leading indicator, a convergence zone where many of the issues that are shaping the industry are concentrated and condensed. From the effects of volatile fuel prices and the economic recession, to evolving technologies, battles over who gets to set regulations, and the potential impact of President Barack Obama's economic stimulus package, it is all there and more.
It is not all bad news though, far from it. For fleets hoping to reduce costs and position their businesses for a stronger future, there are real opportunities as well as insights to be gained by giving idle reduction a closer look in 2009.
As diesel prices began their unanticipated climb to record highs last summer, fuel efficiency turned into a matter of real urgency for many carriers and reducing engine idling became the fastest way for many companies to see big fuel savings in a hurry. “When diesel was approaching $5/gal., people did not need the federal government to tell them not to idle,” notes Joe Tario, project manager, transportation and power systems research at the New York State Energy and Research Development Authority (NYSERDA). As a result, suppliers of idle reduction systems saw huge spikes in demand, sometimes more than even the largest companies could accommodate. According to the Environmental Protection Agency (EPA), SmartWay affiliate partners reported annual sales of over 86,000 idle control devices in the past four quarters, with an associated fuel savings of over 115 million gal.
“We've seen a huge growth in our business,” says John Dennehy, vp of marketing for Espar Heater Systems. “We saw 15% growth from 2007 to 2008, and that was on top of 20% to 25% growth the year prior.”
“The year 2008 was something of a rollercoaster ride,” says Eduardo Navarro de Andrade, director of business development for Carrier Transicold's Truck/Trailer Products Group, which offers the ComfortPro auxiliary power unit (APU). “Demand increased more dramatically than we expected.”
Today, the urgency may have abated, but the interest in idle reduction remains. “People are continuing to look at APUs and other idle reduction systems because nobody really expects fuel prices to stay low,” says Tom Kampf, product manager for Thermo King, maker of the TriPac APU. “Besides, fuel is still higher than it was a few years ago. It still hurts the bottom line; it is just not as acutely painful as it was.”
“While declining diesel prices have alleviated some immediate concerns about fuel consumption when idling, most fleets appear to be actively looking for idle-reduction solutions,” notes Lou Siegel, senior vp for Dometic Corp., a supplier of battery-based AC systems. “The new California regulations are also in effect and being enforced now, which is also impacting market demand for California Air Resources Board [CARB]-approved idle reduction systems,” he says.
“At this point, it is pretty clear that idle reduction will continue to be important,” notes Dr. Linda Gaines, of Argonne National Laboratory's Center for Transportation Research, Energy Systems Division. “Reducing fuel use with strategies like idle reduction are true win-win opportunities. I don't see any barriers. It is more a question of which direction the technology will take going forward.”
According to Gaines and many other industry observers, the road forward will be determined by a number of factors, including the idling patterns of various fleet operations. “It seems to me that there are opportunities for everything now; it depends on the type of operation, on what a fleet needs,” notes Michael Tunnell, director of environmental research for the American Transportation Research Institute. “There will be a need for a variety of idle reduction options for some time to come. We still get calls from companies developing new solutions, too. This story isn't finished yet.”
One of the newest solutions in the idle reduction story was introduced by Bergstrom Inc. and Kohler at The Maintenance Council meeting last month. It combines two technologies to create a hybrid approach to providing onboard auxiliary power. “We have partnered with Bergstrom to create a new hybrid power system,” says Sean Kenefick, sales manager for Kohler. “Basically, it pairs the new battery-driven NITE Plus system from Bergstrom [which is 30% more powerful, but has the same footprint as the original NITE system] with Kohler's 3APU power unit. The Bergstrom system manages the heating and cooling, while the Kohler unit recharges the batteries.”
“We think the new hybrid system is the best of both worlds,” adds Bill Gordon, national director-aftermarket and global director of marketing for Bergstrom. “Kohler's efficient power unit can effectively extend the running time and performance of Bergstrom's battery-based system, yet the system can still operate in the zero emissions mode where required in places like California.”
Another new idle reduction system was introduced by Glacier Bay in 2008. Dubbed the ClimaCab, this battery-based, ductless cooling system features a variable speed compressor and blower plus variable speed controls designed to deliver 8,000 Btu/hr. of cooling for over 12 hrs., according to Kyle Houston, North American sales manager.
For fleets interested in off-board, shore power solutions, there will also be new choices, including the EnviroDock from EnviroDock Inc. With help from NYSERDA, the company will install five of its prototype docks at the Ambest Super Stop parking area off Thruway Exit 28 in New York. The compact units are designed to deliver heat, air conditioning and AC power through the passenger side window opening.
“We like [this approach],” notes Joe Tario of NYSERDA. “It is less expensive and it can still accommodate any truck. We think it is a natural fit with distribution centers where trucks might arrive overnight and sit idling awaiting the day shift to unload.”
Other idle solution suppliers are also incorporating changes to their existing systems based upon lessons learned from the real-world experiences of their customers and in response to changing market needs. For example, Carrier Transicold recently made a diesel particulate filter (DPF) available for its ComfortPro APU, according to Eduardo Navarro de Andrade. The DPF, called ClearSky, enables users to legally operate the diesel-powered APU in California or other locations with zero emissions regulations.
Last year, CARB implemented a five-minute idling limit for all diesel-fueled trucks over 10,000 lbs. GVWR operating within California's borders plus a zero-emissions requirement for any auxiliary power devices. Now CARB has begun to actively enforce the new limits. The minimum fine is $300 for a first offense and $1,000 to $10,000 for subsequent violations.
THE CALIFORNIA EFFECT
There is more coming from The Golden State as well. In 2005, California's governor asked for a waiver of federal regulations to enable the state to impose tougher carbon-dioxide emissions standards on automobiles. After two years of discussion, the EPA declined the request. As one of his first official acts, President Obama asked the EPA to reconsider that decision and grant California the waiver. “We could see a decision coming down in as soon as two months,” says Glen Kedzie, environmental council for the American Trucking Assns.
If California is given permission to set its own higher emissions (and fuel economy) standards, other states can use the precedent and ask for similar waivers. Thirteen other states and the District of Columbia have already done so, in fact. The impact on the trucking industry is not clear. However, one result could be the imposition of de facto tougher national emissions regulations by California and other like-minded states as fleets are forced to choose between establishing California-only operations or standardizing on CARB-approved equipment.
“There is a lot of concern about letting each state make their own rules for emissions and fuel economy,” says Rex Greer, president of Pony Pack Inc. “Fleets and manufacturers need more standardization in these tough times, not more product proliferation.”
Fleets considering implementing idle reduction technologies don't just need uniform regulations, they also need investment capital — and that has been harder to come by. Now, however, there is a new financing program for owner-operators and smaller fleets designed to enable more companies to purchase approved fuel-saving and emissions-reducing equipment or even newer used trucks.
In September 2008, the EPA awarded $3.4 million in grants to provide loans to small trucking companies through the SmartWay Clean Diesel Finance Program. Applicants fill out a single form, which is then submitted to multiple participating vendors. According to the EPA, since its inception in March 2008, loan and lease applications have averaged over 350 per month.
Some idle reduction equipment suppliers have also established their own finance programs to help make it easier for fleets to acquire systems. Webasto, for example, has partnered with Magellan Capital to offer 0% down lease financing. “People have the option of leasing BlueCool alone, BlueCool plus an Air Top heater or the BlueCool and heater package with an engine preheater,” says Josh Lupu, marketing specialist for Webasto.
“Access to financing is critical today,” notes Shawn Wasson of Cummins. “Most of our distributors have financing ties themselves and can assist customers. We also do what we can to help customers learn about and take advantage of grant programs.”
The financial support plan of all support plans has been signed into law by President Obama. The compromised House and Senate plan contains several items that may impact the trucking industry in general and idle reduction in particular if they are incorporated into the final package.
Chief among these is $300 million to fund the existing Diesel Emissions Reduction Act (DERA), which provides grants and loans to state and local governments for projects that reduce diesel emissions, including idle reduction programs. Other items on the list that might also give idle reduction efforts a boost include $200 million for a new grant program to encourage electric vehicle technologies and $2 billion for the Advanced Battery Loan Guarantee and Grants Program to support U.S. manufacturers of advanced vehicle batteries and battery systems.
Green is definitely the color of the stimulus package no matter how you look at it, and the ramifications for trucking are anybody's guess right now. In the meantime, many fleets will be doing some serious “greening” of their own this year by reducing idling to help position their businesses for success right through this recession and on to recovery.
Federal excise tax relief
Fleets purchasing eligible idle reduction equipment or advanced insulation can now enjoy a 12% cost savings, thanks to a recent amendment of the Internal Revenue Code. Section 206 of the Energy Improvement and Extension Act of 2008 amended Section 4053 of the Internal Revenue Code to include the purchase and installation of a long list of idle reduction devices and advanced insulation packages among products eligible for an exemption from the 12% federal excise tax. The exemption applies to equipment sold after Oct. 3, 2008. A complete list of eligible systems is available on the EPA SmartWay web site at www.epa.gov/otag/smartway. Additional information is also available on the Internal Revenue web site at www.irs.gov. Refer to the instructions for Form 720, Quarterly Federal Excise Tax Return.
The weight (or wait) exemption
The Energy Policy Act of 2005 created a national 400-lb. weight exemption for onboard idle reduction systems on heavy-duty vehicles. At first, the exemption seemed to be good news for weight-sensitive carriers. However, each state was permitted to adopt the exemption at its own discretion without being subject to any penalties if it elected to take a pass. Initially, only a very few states got onboard, but today some 34 states allow the exemption and three others have legislation pending.
For fleets that can steer around the non-participating states, this may be good enough. For others, unless all states sign on, the weight exemption remains a “wait exemption.” States that do not currently permit the 400-lb. weight exemption include California, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Kentucky, Massachusetts, North Carolina, Rhode Island, Tennessee and Wyoming. (Alabama, Colorado, and West Virginia had legislation pending as of the publication of this article.)
Argonne National Laboratory publishes a monthly newsletter called “National Idling Reduction Network News,” which reports on the status of the 400-lb. weight exemption by state. Go to www1.eere.energy.gov/vehiclesandfuels/resources/fcvt_national_idling.html.
For more information about the companies and organizations mentioned in the article, visit these web sites:
- American Transportation Research Institute: www.atri-online.org
- American Trucking Assns.: www.trucking.org
- Argonne National Laboratory: www.anl.gov
- Bergstrom Inc.: www.nitesystem.com
- Carrier Transicold: www.trucktrailer.carrier.com
- Cummins Power Generation: www.cumminscomfortguard.com
- Dometic Corp.: www.dometictruck.com
- Environmental Protection Agency: www.epa.gov
- EnviroDock: www.envirodock.com
- EPA SmartWay Clean Diesel Finance Program: www.SmartWayFinanceCenter.com
- Espar Heater Systems: www.espar.com
- Glacier Bay: www.glacierbay.com
- Kohler: www.kohlerpower.com
- New York State Energy and Research Development Authority (NYSERDA): www.nyserda.org
- Pony Pack: www.ponypack.com
- Thermo King Corp.: www.thermoking.com
- Webasto: www.webasto-us.com