Zero-emission trucks were a prominent sight on the show floor, but ZEVs are a top 10 concern for fleets.
Photo: Deborah Lockridge
The American Trucking Associations’ annual management conference and expo is always a great chance to talk to suppliers and fleet execs about what’s going on in the industry.
I came back from Austin, Texas, with a few key takeaways gleaned from educational sessions, the show floor, press conferences, and conversations with fleet and supplier execs at booths or meals.
1. “It’s the Economy, Stupid”
Jonathan Randall of Mack, summarizing the theme of the show and conversations, evoked a well-known quote from James Carville in Bill Clinton’s 1992 presidential campaign: “It’s the economy, stupid.”
It was the top concern in the American Transportation Research Institute’s annual survey on top industry issues.
Mixed economic indicators have led to disagreement as to the likelihood of a recession and how bad it is likely to be if it arrives.
Randall said odds are looking good for a soft landing, and ATA chief economist Bob Costello said a recession, if it comes, would likely be mild.
What makes things feel worse for trucking fleets is the freight recession. We’ve been hearing for several months now that it has bottomed out, but it still seems to be bouncing along the bottom. But there are some signs of improvement.
ATA Chief Economist Bob Costello explained that the big problem is not the economic numbers that indicate demand, but rather a supply-side problem. Overcapacity – too many trucks chasing too little freight. Small companies that are dependent on the spot market are vulnerable and many likely will exit the market, which will be good news for the ones that remain.
Truck and trailer makers are still working to catch up on the backlog of orders caused by pandemic-related supply chain problems, but they will likely have worked through that backlog by some point in 2024. There are still some supply-chain issues lingering in some areas.
That backlog has probably been a blessing in disguise from an overcapacity view. Fleets were not able to obtain the number of trucks they wanted to in order to take advantage of the hot post-Covid freight market. If they had, our overcapacity situation might be worse now.
The vocational segment is expected to be strong thanks to infrastructure investment, even though homebuilding has been affected by higher interest rates.
2. Tech, tech, and more tech
Several discussions included the exponential growth of technology in the industry.
Exhibitors other than the truck OEMs were largely dominated by companies offering telematics, TMS (transportation management systems software), telematics, trailer tracking, custom apps, maintenance management software, yard management, predictive maintenance, driver management platforms, etc. Even a smart fifth wheel from Fontaine!
3. Sustainability and emissions
While nearly every truck maker displayed lower- or zero-emissions vehicles, for the first time, zero-emission vehicles made ATRI’s Top 10 list of concerns.
Truck makers are announcing finance and leasing programs to help fleets with the higher up-front costs of electric trucks.
ATA, the California Trucking Association, and others are pushing back against California’s unrealistic zero-emission regs, in the courts and in the media, in favor of a multi-solution approach including alt fuels such as renewable natural gas and biodiesel.
ATA President and CEO Chris Spear had sharp criticism for the California Air Resources Board (as well as for labor unions and plaintiffs’ attorneys) in his state of the industry address. He called CARB “an unelected, ill-informed band oof extremists who have no clue the impact their [zero-emission truck] timelines and targets will have on our economy.”
Spear said a better approach to cut emissions would be to eliminate the century-old federal excise tax, which adds 12.5% to the price of every new tractor purchased today. “Those new trucks produce 98.5% less emissions than half of all trucks currently operating in California.”
“In fact, 53% of trucks operating today in California are equipped with 2010 model engines or older. Replacing them with today’s new equipment would reduce emissions in the state by 83%. We can cut emissions, starting right now.”
“Scope 3 emissions” is a new area of concern. California just passed a law requiring large businesses operating in the state to report their Scope 3 emissions (generated indirectly from the supply chain.) That likely means trucking companies hauling freight for such businesses will have to figure out how to report those emissions – and how to cut them to be competitive. California lawmakers are urging the federal SEC to adopt these disclosure rules as well.
Meanwhile, a massive truck pre-buy is being predicted ahead of the EPA’s 2027 engine emissions regulations, which one supplier told me will dwarf the pre-buys we saw prior to the 2007 and 2010 EPA regs. And it’s not the first time we’ve heard that. ACT Research was predicting the pre-buy over a year ago.
Credit: Source link
