Energy Use and Policy in the U.S.
Trucking Sector
State of the Trucking Industry
Steve Tam
ACT RESEARCH Co., LLC
October 10, 2012
Presentation Overview
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Axiom/Opportunity
Class 8 Trucks by the Numbers
Demand Drivers
Population/Average Age
Forecast
Emissions/Fuel Efficiency Standards
Alternative Fuels
Alternative Modes
Questions
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Axiom
• There is no substitute transportation mode for
heavy trucks and tractor-trailers.
• None. Not even if you live here.
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The Opportunity
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Class 8 Truck by the Numbers
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GVWR = 33,001+ lbs
GCWR = 80,000 lbs
1
Population = 2,552,865
1
Vehicle miles traveled = 175,910,268,555
1
Gallons of fuel consumed = 29,884,860,000
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MPG = 5.89
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Average Length of Haul = 206 miles
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Combination vehicles only - Source: US DOT FHA Highway Statistics 2010
Source: Bureau of Transportation Statistics and US Census Bureau Commodity Flow Survey 2007
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US Classes 3-8 Truck Retail Sales
History at a Glance
Percent Mix 1946 - YTD 2012
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
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GVW8
GVW7
GVW6
GVW5
GVW4
GVW3
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Class 8 Configurations
Straight Trucks
Tractors
(Combinations)
Sleeper
Non-sleeper
(Day Cab)
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Length of Haul
Average Length of Haul
Distribution of 2007 Truck Only
Mode
2007
2002
All Modes
619
546
Distance
(Miles)
% Truck
Tons
% TonMiles
Truck
206
173
< 50
65%
10%
- For-hire
566
523
50 – 99
11%
7%
- Private
57
64
100 – 249
11%
15%
Rail
728
807
250 – 499
6%
18%
500 – 749
3%
13%
750 – 999
2%
10%
1,000 – 1,499
1%
11%
1,500 – 2,000
1%
8%
> 2,000
0%
7%
Source: Bureau of Transportation Statistics and US Census Bureau
Commodity Flow Survey 2007
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Demand Drivers
• Replacement
– Roughly 75% of demand in any given period
• Economy/Freight
– Each percentage point change in GDP equates to a
10-12,000 unit increase/decrease in trucks needed
• Trucker Profitability
– Truckers do not add capacity during periods of weak
profitability
• Used Truck Values
– At record highs
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Marginal Demand Considerations:
Evolution not Revolution
Detracting from Demand
Accretive to Demand
Retail Consolidation
Population Growth
Packaging evolution
Internet Shopping
Long, Mediumterm
Electronics Miniaturization
Ubiquitousness of
electronics
Long-term
Intermodal
Rising Oil Prices
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Long-term
Long-term
Cheap Natural Gas
Mfg. On-shoring
Rising Equipment Prices
Trend Period
Regulatory Onslaught
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Recent/Now
Coming
Now
Used Class 8 Sales Gap: Average Selling Price
vs. Estimated New Class 8 Price
January '03 - July '11 (Not Seasonally Adjusted)
130
$(000s)/Unit
New Price Estimate (Tractor Sleeper)
$117K
120
$108K
110
100
$123K
$95K
$100K
90
$ GAP: New - Used
80
70
60
50
Average Used Class 8 Price
40
30
20
10
2002
03
04
05
06
07
08
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10
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1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012 F
2013 F
2014 F
2015 F
2016 F
2017 F
Millions
U.S. Class 8 Population
3.5
3.0
2.5
12
2.0
1.5
1.0
0.5
0.0
Active Pop
Total Pop
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Active Pop
13
Total Pop
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2017 F
2015 F
2013 F
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
1979
Years
U.S Class 8 Average Age
U.S. Class 8 Production
350,000
300,000
250,000
200,000
150,000
100,000
50,000
Tractor Sleeper
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Tractor Non-Sleeper
Truck Sleeper
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Truck Non-Sleeper
2017 F
2016 F
2015 F
2014 F
2013 F
2012 F
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
-
EPA Emissions Standards
1994
500 PPM
NOx / NOx+NMHC [g/HP-hr]
5.0
1998
4.0
SULFUR
2002
2.5
2007
1.2
0.2
0.0
0.0
15 PPM
2010
0.01
0.10
PARTICULATE [g/HP-hr]
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Combination Tractor Standards
EPA GHG
(g CO2/ton-mile)
NHTSA Fuel Efficiency
(gal/1,000 ton-mile)
Low
Roof
Mid
Roof
High
Roof
Class 7 DC
104
115
120
Class 8 DC
80
86
Class 8
Sleeper
16
66
73
Low
Roof
Mid
Roof
High
Roof
Class 7 DC
10.2
11.3
11.8
89
Class 8 DC
7.8
8.4
8.7
72
Class 8
Sleeper
6.5
7.0
7.1
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Replacement Will Take Time
Total Population by Model Year
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
3.5%
6.4%
EPA 2010
EPA 2007
4.7%
8.6%
2006 Pre-Buy
EPA 2002/2004
3.8%
0%
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5.5%
2%
4%
6%
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8%
10%
Alternative Fuels
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Alcohol
Ammonia
Battery/electric
Biofuels
Carbon
neutral/negative
• Compressed air
• Hydrogen
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• H2CNG
• Liquid Nitrogen
• Natural gas (CNG, LNG,
LCNG)
• Nuclear
• Propane
• Hybrid
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Stages of U.S. Class 8 Natural Gas Adoption--Baseline Scenario
(Class 8 Truck Retail Sales Plus Transit Buses)
Traditional
Diesel
Dominates
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Preconditions
for Takeoff
Takeoff of
Natural Gas
Adoption
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Drive to Maturity
and
Steady State Share
Alternative Modes
U.S. Freight Market: 2010
(as a % of Revenues)
Source: American Trucking Association, ACT Research Co., LLC
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Questions To Be Answered
• How can consumption (freight) be reduced?
• How can equipment/fuel efficiency be
maximized?
• What can be done to speed replacement?
• How can the development, commercialization
and adoption of alternative fuels be
accelerated?
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