New truck technology is great for the environment, but tough on businesses, large and small.
No one disputes the fact that fuel efficiency and clean air are goals much to be desired. But, as in everything desirable, there’s a cost to be weighed. Two articles on two different sites deal with the issue from two different sides of the industry.
Early in May of this year, an article on FleetOwner.com, “Cleaner Trucks Are Risky Business,” quotes Denny Slagle, Executive Vice President of Volvo Group saying, “It’s risky for a manufacturer to bring new technology. With all the excitement around natural gas, one would have to ask why none of the major North American truck manufacturers except Volvo are planning to introduce their own natural gas engines.” He made this statement as part of his keynote speech at the 2014 Alternative Clean Transportation (ACT) Expo. Research and development, and the resulting technology innovations are extremely costly endeavors, so businesses need to see the promise of scale and return on investment before they begin. Part of the problem for the OEMs is that, when a new truck technology, especially one like natural gas, is introduced, there is low volume production of these vehicles. That makes the cost of producing them even higher.
Slagle had suggestions for regulators and government, including: tax incentives to help both producers and truck users explore the feasibility of alternative fuel, and updates and options on fuel taxes Yet, despite the high costs involved, Slagle made clear that “the business world has never been more ready to find sustainable solutions and accept changes that improve the economy.”
We know how corporations feel; how about truckers themselves?
The cost of new technology is something that every company has to consider, but this cost can be crushing for individual truckers. Yet, even there, the benefits need to be weighed. An article on npr.org back in January, “Cleaner Air in L.A. Ports Comes at a Cost to Truckers” discussed the stringent air quality requirements in California, especially at the twin ports of Lost Angeles and Long Beach through the eyes of truckers Pedro Menendez and Shannon Bell. Both drivers have children with asthma so they welcome the fact that the regulations have resulted in a 70 percent drop in harmful emissions. The downside for small businessmen like these drivers, however, is the cost of new trucks that run on natural gas. According to trucker Bell, “I didn’t suspect that the truckers would end up paying the costs. Those new, cleaner trucks… cost anywhere from [$100,000] to $180,000.” His last truck cost $17,000. Now he has truck payments of $1,300 of month plus the higher cost on maintenance and repair. A plan that would have shifted those costs from individual truckers to trucking companies failed I court.
Both Slagle on the corporate side and Bell on the trucker side want lower emissions and appreciate the health benefits than ensue. Yet both have to consider the costs involved. Finding the right balance between the two is the biggest challenge the industry faces.
This article originally appeared on the NationaLease blog.