Green logistics/trucking news: President Obama and trucking industry agree on new fuel standards - Article from Logistics Management

Green logistics/trucking news: President Obama and trucking industry agree on new fuel standards - Article from Logistics Management

Green logistics/trucking news: President Obama and trucking industry agree on new fuel standards
By John D. Schulz, Contributing Editor
May 25, 2010
A fully loaded 80,000-pound tractor-trailer gets perhaps five miles per gallon of costly diesel fuel. If the truck is properly maintained. Going downhill. With a tailwind. Maybe.

President Barack Obama wants to change that. And, somewhat surprisingly, the American trucking industry largely agrees.

In a Rose Garden ceremony on May 21 with a handful of top U.S. trucking industry and heavy truck manufacturers on hand, President Obama signed a presidential memorandum that for the first time would set mileage and pollution limits for big trucks. The rules are set to take effect with the 2014 model year.

Although heavy trucks comprise just 4 percent of vehicles, they account for perhaps as much as 21 percent of air pollution from mobile sources. Heavy trucks consume 16 percent to 22 percent of this nation’s fuel, or about 54 billion gallons of fuel annually. When diesel reached its peak in 2008, the U.S. trucking industry had a fuel tab that exceeded $150 billion. Although this year’s figure cannot be determined precisely, the tab will approach that again.

After labor and equipment, fuel is the third-highest cost for a motor carrier. The average truckload carrier spends about 12 to 14 percent of its revenue on fuel, with the average LTL carrier spending perhaps 6 percent (The difference is because of the longer lengths of haul of a TL carrier, typically over 1,000 miles).

With the White House under pressure from environmentalists after the catastrophic BP oil spill in the Gulf of Mexico, the president chose to go the executive order route on truck mileage standards. That was an end-run around Congress, which could have been expected to dither for years (if not decades) on the issue. Instead, the presidential memorandum directs the U.S. Department of Transportation and the Environmental Protection Agency to develop national standards for fuel economy and greenhouse gas emissions for heavy- and medium-duty trucks.

“The nation that leads in the clean energy economy will lead the global economy,” Obama declared on May 18. “I want America to be that nation.”

Although a Class 8 truck is cleaner now that it has ever been, the nation’s 7 million commercial trucks are hardly pristine. According to the EPA, commercial trucks account for 21 percent of all greenhouse gas emissions in the transport sector even though they are roughly 4 percent of all vehicles.

“This is a small but commendable step,” Michael Levi, an energy and climate change expert with the Council of Foreign Relations, told the New York Times. “The oil spill can help focus people’s attention, but it will take something else to close the deal.”

That “something else” could be the surprising support of the organized trucking lobby. For an industry that fought deregulation, anti-lock brakes and other initiatives when they were first proposed, the trucking industry seems unusually sanguine and even supportive of the president’s proposal.

Hours after the president’s announcement where he was flanked by top executives of the trucking industry and its suppliers, the American Trucking Associations issued a press release trumpeting the announcement that the President “effectively endorses the ATA Sustainability Task Force recommendation” of 2008 that called for national fuel economy standards for trucks to reduce greenhouse gas emissions.

ATA Chairman Tommy Hodges, who also is chairman of Titan Transfer, Shelbyville, Tenn., attended the Rose Garden ceremony along with the heads of Daimler Trucks North America, Volvo North American Trucks, Cummins and Navistar International.

The trucking industry is determined “to be at the front of the fuel economy issue,” Hodges said. He said ATA would have “significant input” on the final rule to develop what the industry hopes will be beneficial and affordable fuel efficiency standards

SaaS and Outsourced TMS Strategies

The trend is up for Software as a Service and Outsourced TMS Strategies according to data from a recent Aberdeen Group White paper. With 69% of their respondents stating that they prefer to seek assistance through consulting on "best practice implementation".

We can break down the graph into three distinct groups:

1. Thought Leadership(69%) – Companies prefer to seek assistance on thought leadership with 69% considering consulting on "best practice implementation"
2. Optimization (40% range) – Companies prefer to seek assistance beginning with planning, shipment monitoring and problem resolution, and freight audit and settlement assistance
3. Execution (30% range) – Assistance in managed services for backhaul, inter-company coordinators, transportation execution and procurement / RFO management

The numbers of companies exploring release of control over execution-side capabilities is on the upswing. The aversions of the past to releasing control of execution-related areas is beginning to subside as SaaS hosted sites, B2B data exchange platforms and providers become more robust and secure, and 3PL options for managed systems and execution become more commonplace and expand their service offerings.
Source: Aberdeen Group