Trucking companies look to solar panels to reduce costs
The persistent low freight rate environment paired with higher costs is encouraging fleets to come up with creative solutions to save costs in the form of solar panels on tractor trailers. Dry van carrier GP Transco is installing solar panels on its entire fleet of around 600 trucks after testing the tech on 10 trucks over a six-month period. In an interview with FreightWaves, Brett Wilkie, vice president of maintenance and safety for GP Transco, estimated that the technology will save $1,700 per tractor per year. This was calculated assuming an average diesel price of $4 per gallon and annual mileage of 110,000 miles per truck.
An added benefit is reducing the parasitic drain on batteries from modules on the truck, which are constantly powered and steadily drain the tractor’s battery. FreightWaves’ Todd Maiden writes, “The bigger draws on a truck’s battery system come from the use of the in-cab heating and cooling system as well as the use of small appliances and electronics like refrigerators, microwaves and televisions. However, there is always some draw on batteries as advanced telematics, smart sensors and cameras on newer trucks are continuously working.”
One provider of solar panels used on tractor trailers originally designed the panels for the U.S. Army to use on military vehicles, drones and gensets. But over-the-road trucking presents new challenges compared to the battlefield. Venkatesan Murali, founder and CTO at MerlinSolar, told FreightWaves, “We realized very quickly that trucking, commercial transportation is probably the toughest place to deploy solar panels.” After deploying the panels for trucking fleets, Murali said the panels tripled the average 18-month lifetime of EPU batteries, with some drivers reporting going an entire 34-hour reset period without idling the tractor for power.
Maintenance parts and labor costs fall while labor rates and shop sales grow
According to two recent reports released by the American Trucking Associations’ Technology & Maintenance Council (TMC), parts and labor costs saw a decline in Q4 2023 but heavy-duty repair shop sales and rates charged for labor rose for all of 2023.
The annual Fullbay/TMC State of Heavy-Duty Repair Report used survey data from over 1,000 individual survey respondents and shop data from North America, Australia and New Zealand. Compared to 2022, heavy-duty repair shops reported a 40% increase in counter sales while labor rates increased approximately $10 per hour. Compared to trucking’s low margins, maintenance providers saw better profits from more demand. The report adds that over 40% of respondents reported a net profit of 11%-20% For the ongoing technician shortage, there appears to be a strategy of job hopping. Per the report, only 25% of technicians indicated they worked at only three or fewer shops throughout the course of their career.
The Decisiv/TMC North American Service Event Benchmark Report uses data from Decisiv’s service management platform that covers over 300,000 monthly maintenance and repair events from over 5,000 service locations. The report notes the Q4 2023 decline quarter over quarter came from parts costs, which fell 2.2% while labor declined 0.2%. Year over year saw a decline in parts paired with a rise in labor. The report said, “On a year-over-year basis, combined parts and labor costs in [the] final quarter of 2023 were 0.2% higher than the same quarter in 2022. However, in the annual comparison, a 2.2% drop in parts prices was offset by a 4.0% rise in labor costs.” For diesel technicians, continued demand remains, with a recent TechForce Foundation Transportation Technician Supply & Demand Report forecasting, “177,000 new entrants in the diesel technician field are needed between 2022 and 2026.”
Market update: February truck auction pricing falls in February
A recent report from J.D. Power Valuation Services hinted at the impact Yellow Corp.’s truck and trailer bankruptcy liquidation is having on the marketplace with the first major sale of equipment on March 5. The report notes the impact of those day cabs, which are a fixture of LTL carriers: “Prior to last week, it was unusual to see a noticeable number of late-model single-axle daycabs in the marketplace, and selling prices reflected this increased supply.” The full impact won’t be understood until the next report is published in April, which will include the March sales data.
For February, while total late-model sleeper units sold compared to January was similar, the price paid continues to fall. FreightWaves’ Brinley Hineman writes, “The number of late-model sleepers sold in February was comparable to the January figure. However, prices dropped significantly, particularly among trucks that hit the 5-year-old mark in January. The report found that the average price in February of model-year 2020 sleeper tractors was $37,064 — a nearly 26% decrease from January.” The report notes current pricing is approximately 65% higher than late 2019 but 37% higher when taking inflation into account.
FreightWaves SONAR spotlight: First day of spring fails to warm up spot market
Summary: Spot market rates on the first day of spring, which was Tuesday, more closely resemble the first day of fall 2023, according to recent data from the FreightWaves National Truckload Index 7-Day Average. In the past week, NTI spot market rates rose 4 cents per mile from $2.24 all-in on March 11 to $2.28 per mile. Reefer spot market rates also posted a decline, falling 2 cents per mile w/w from $2.51 all-in to $2.49. For the week ahead, recent upward movements in daily spot market movements (NTID) suggest further strengthening for dry van rates, but the case for a sustained rally remains elusive.
One headwind for an improvement in spot market rates is lower outbound tender rejection rates, which forces more contracted carriers to compete for spot market loads to fill load volume gaps. Currently the Nationwide Outbound Tender Reject Index is at 3.81%. It only rose 7 basis points w/w from 3.74% on March 11. Dry van rejection rates remain depressed compared to the national average, with VOTRI increasing a paltry 14 bps w/w from 3.37% to 3.51%. Reefer outbound tender rejection rates (ROTRI) were a bright spot, rising 86 bps w/w from 4.64% to 5.5%.
The Routing Guide: Links from around the web
Groups lose latest court attempt to block California’s AB5 from state’s trucking sector (FreightWaves)
CVSA’s new out-of-service criteria: What truckers need to know (OverDrive)
Further appeals to block AB5 from California trucking seen as a long shot (FreightWaves)
Industry study pegs electric truck grid buildout at $1 trillion (FreightWaves)
Georgia bill would restrict truck-crash lawsuits against insurers (FreightWaves)
Cargo thefts spiked 68% in Q4, led by food and beverage freight (FreightWaves)
