EPA releases strict new heavy truck emissions rule
Emissions requirements for trucking are set to get stricter. The Environmental Protection Agency recently released a 1,155-page final ruling on Phase 3 greenhouse gas emission standards for heavy-duty vehicles covering model years 2027 through 2032. Jason Cannon of the Commercial Carrier Journal writes, “Motor carriers will have more time (2027-2030) to build out a zero-emissions infrastructure, but the flip-side is stronger emissions limits in 2031 and 2032.” The desired end state is more zero-emission vehicles. Under the new rules, Cannon notes, “roughly 30% of heavy-duty vocational trucks would need to be zero-emission by 2032 and 40% of regional day cabs.”
For zero-emission trucks and other vehicles, the challenge remains the cost. FreightWaves’ John Gallagher writes, “A new Class 8 diesel truck costs roughly $180,000 compared with up to $400,000 for a battery-electric truck, according to estimates.” Gallagher cites a recent interview on National Public Radio during which Gabe Klein, executive director of the U.S. Joint Office of Energy and Transportation said “cost parity” hasn’t been achieved yet but subsidies are one option. Klein said, “That’s why the federal government is providing subsidies, to bring it down closer to cost parity.” Another challenge is lack of infrastructure, but Klein is optimistic, adding, “I will also say the charging infrastructure is of course a limiting factor. So we need to make sure everybody has access, not just the big fleets and companies.”
Initial reactions from trucking lobbying groups appear less enthused. American Trucking Associations President and CEO Chris Spear said in a statement, “The post-2030 targets remain entirely unachievable given the current state of zero-emission technology, the lack of charging infrastructure and restrictions on the power grid.” Owner-Operator Independent Drivers Association President Todd Spencer believes the rules create “unworkable” requirements. Spencer said, “This administration appears more focused on placating extreme environmental activists who have never been inside a truck than the small business truckers who ensure that Americans have food in their grocery stores and clothes on their backs.”
Fleet safety focus ahead of total solar eclipse on Monday
On Monday, a total solar eclipse will cross into the U.S. from Mexico beginning around 1:30 p.m. Central time and exiting through Maine around 3:30 p.m. Eastern, according to NASA. The last total solar eclipse to cross North America was on Aug. 21, 2017, and the next will not cross North America until 2044. Naturally, total solar eclipses bring increased vehicle traffic from across the U.S. to witness the event.
A fact sheet released by the Federal Highway Administration forecasts that “increased traffic to remote areas could cause other safety impacts, such as the presence of illegally parked vehicles in unsafe areas (e.g., shoulders or medians), or the increased potential of igniting wildfires in dry areas.”
In addition, solar eclipses bring an increased risk for vehicle crashes. Tim Menard, CEO of Lyt, told Fleet Owner, “There was a significant increase in fatal car crashes in the United States around the time of the 2017 total solar eclipse. Industry studies found a 31% increase in traffic risks around the time of the eclipse … . In absolute terms, this is an average of one extra crash-involved person every 25 minutes and one extra crash fatality every 95 minutes.”
States in the path of totality are enacting measures restricting some freight types and encouraging commercial vehicles to avoid the impacted areas. Fleet Owner’s Jenna Hume writes, “While restrictions are being placed on oversized loads, most states only ask truck drivers to avoid traveling in high-traffic areas of their states before, during, and after the eclipse; truck drivers and/or fleets will not be penalized for any actual travel conducted.” Vermont, Texas and Arkansas are among the states asking for reduced commercial vehicle traffic. For Texas, no overweight and over-dimension travel is permitted on that day from midnight to midnight.
Market update: March preliminary Class 8 orders ‘press pause’
Recent data from ACT Research shows preliminary March Class 8 net orders were 17,300 units, down 10,400 units compared to February. Compared to March 2023, net orders fell 8.7%. Steve Tam, ACT’s vice president and analyst, said in the release, “Nascent improvements in the freight market and select OEMs’ efforts to smooth demand, notwithstanding forced conservatism among a portion of the truck buying populace, capped Class 8 order activity in March.” While Tam cautions waiting for March order volume details, initial reactions suggest waning demand for tractors in March.
Looking at potential drivers of demand, areas outside the for-hire trucking sector were drivers of growth from the previous months. Given recent order data, this trend may be slowing. FreightWaves SONAR Head of Freight Market Intelligence Zach Strickland wrote in the Daily Watch, a newsletter for SONAR subscribers, “Looking at national carrier truck counts, only a few showed annual growth in the fourth quarter of 2023. Knight-Swift and Schneider both grew by acquisition. ACT Research has inferred that most of the outperformance of expectation has come from areas outside the for-hire truckload market, such as private fleets and vocational support for growing infrastructure around nearshoring.”
FreightWaves SONAR spotlight: Easter outbound tender lead times are up
Summary: Outbound tender lead times have risen, but truckload carriers remain buffeted by lower spot rates and loosening capacity in the contract market. Tender lead times rose in the past week from 2.87 days on March 25 to 3.11 days. This is the highest recorded tender lead time since Jan. 3’s 3.13 days. Tender lead times increase leading up to major holidays or events during which customers feel they may struggle to find capacity if they tender loads closer to pickup. End of month and end of quarter can also be instances when an increase in tender lead times is warranted, to ensure product is recorded before the next fiscal quarter begins.
For outbound tender rejections, rates increased a paltry 30 basis points week over week from 3.48% to 3.78%. Hopes of an early boom before produce season for reefer carriers were similarly muted, with reefer outbound tender rejection rates rising 46 bps w/w from 4.58% to 5.04%. For flatbed carriers who forgo the luxury of no-touch freight and prefer binders, chains, straps and tarps while braving the elements, outbound tender rejection rates delivered, rising 287 bps w/w from 13.15% on March 25 to 16.02%. Warmer weather should continue to buoy flatbed demand as job sites in regions with harsh winter climates return to full capacity.
The Routing Guide: Links from around the web
NHTSA reports fatality, injury uptick in latest truck crash stats (FreightWaves)
Kevin Rutherford’s MATS talk derailed by broker transparency argument (OverDrive)
Truck lease purchase deals come under heavy fire at MATS and in court (FreightWaves)
Pride Group’s bankruptcy filing underscores impact of trucking downturn (FreightWaves)
FMCSA urges truck driving schools to apply for grant money (FreightWaves)
Missouri court upholds nuclear verdict, blasts carrier’s safety practices (FreightWaves)