I remember my very first foray into fuel efficiency. I was in engineering at International, tasked with creating a master plan for our trucks to operate with more fuel efficiency. I began my work by looking at the technologies that had been developed to save fuel. In the 2007 to 2008 timeframe, there were a lot of technologies to consider, some of which had been invented and lab-tested in the 1970s.
Another thing I found was that in times of high fuel prices, a lot of R&D money was directed toward finding ways to save fuel, but when fuel prices came down, some of the companies that had developed these fuel-efficiency products ended up going out of business.
However, over the years, I’ve noticed that some of those companies—or at least some of the products they developed—were resurrected when fuel prices soared again.
What I learned from my first fuel efficiency assignment is that companies—even ones with great ideas and useful products—come and go.
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I think we all need to keep that in mind as we are navigating through trucking’s Messy Middle. I’m sure all of you are aware that there has been a lot of news about some of the alternative fuel start-ups now having to scale back, alter production dates, or seek bankruptcy protection. Some folks are taking this as a sign that developments on alternative-fueled vehicles in general, and battery electric and hydrogen fuel cell vehicles in particular, will stop.
In my opinion, that couldn’t be further from the truth. For one thing, there are still many companies—both traditional OEMs and alt-fuel startups—working on these technologies.
Some are quick to add that the new administration's priorities are different than those of the previous administration, so all work on alternative-fueled vehicles will stop. I don’t think that is true either. Without incentives, manufacturers of these powertrain solutions will have to sharpen their pencils and work hard to bring the cost of these trucks closer to parity with diesel-powered trucks. But that is nothing new.
One thing I know with certainty is that any new trucking technology has to have a TCO that allows fleets to remain profitable. I also know that when a new technology is introduced, prices tend to be higher because there are no economies of scale to be leveraged. As product acceptance grows and technology improves, prices come down.
My advice to fleets is to continue their efforts to move freight more efficiently and to remain confident that the technologies that make practical and economic sense will survive. Based on my years in this industry, some surviving technologies will make trucking cleaner and more profitable.
