Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 1 

## Barriers	to the Increased	Adoption	of

Fuel	Efficiency Technologies	in	the
North	American On

- Road Freight	Sector

Report for the	International	Council	for	Clean	Transportation

Mike	Roeth,	North	American	Council	for	Freight	Efficiency Dave	Kircher,	Cascade	Sierra	Solutions

Joel	Smith,	Cascade	Sierra	Solutions Rob	Swim,	North	American	Council	for	Freight	Efficiency

July 2013Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 2 Acknowledgements:

This	project	was	done	with	support	and	funding	from	the	ICCT. The	authors	are	also	grateful	for	the
research	contributions	and	reviews	of	Tessa	Lee	and	David Schwartz	of	the	Carbon	War	Room

, the
assistance	 of Kevin	 Rutherford	 of Let’s	 Truck and	 all	 of	 the	 participating o wner

- operator s and individuals	from	the	fleets,	supply	chain	companies	and	dealers for	their	time	and	candidness

. The expert	advisory	committee	of	Nigel	Clark,	Bruce	Stockton,	and	Susan	Mazur

- Stommen	also	provided
valuable	i nsights	at	 the	various	stages	of	 the	project ,	as	did	Ben	Sharpe,	Rachel	Muncrief,	and	Nic Lutsey	of	the	ICC T.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 3 Table	of	Contents

Acknowledgements

................................ ................................ ................................ ................................ 2

Table	of	Contents

................................ ................................ ................................ ................................ ... 3

Executive	Summary

................................ ................................ ................................ ................................ 4

I. Introduction

................................ ................................ ................................ ................................ ..... 8

II. Study	Design	and	Methodology

................................ ................................ ................................ ...... 13 Survey	des i gn

................................ ................................ ................................ ................................ .... 13 Stakeholder	descriptions

................................ ................................ ................................ ................... 1 4
Data	collection

................................ ................................ ................................ ................................ .. 17

Post

- survey	analysis

................................ ................................ ................................ .......................... 19

III. Findings

................................ ................................ ................................ ................................ .......... 2 3 Uncertain	Payback Time

................................ ................................ ................................ .................... 2 3 Capital	Cost

................................ ................................ ................................ ................................ ....... 2 9
Credible	Information

................................ ................................ ................................ ......................... 3 2 Credible	Information	Verifying (Early)

................................ ................................ .................... 3 3 Credible	Information	Sharing	(Later)

................................ ................................ ...................... 3 8
Inconsisten t Reliability

................................ ................................ ................................ ...................... 4 3
Lack	of Technology	A vailability.

................................ ................................ ................................ ........ 4 5
Additional F indings

................................ ................................ ................................ ............................ 4 8 Specific Technologies

................................ ................................ ................................ ............................. 4 8
Driver	Retention

................................ ................................ ................................ ................................ ..... 4 9 Split	incentive

................................ ................................ ................................ ......................... 51 Perspectives	on	Regulations

................................ ................................ ................................ ... 52
Rebound	effect

................................ ................................ ................................ ....................... 5 3

Owner

- operator s data

................................ ................................ ................................ ............. 5 4

IV. Conclusions	and	Recommendations

................................ ................................ ............................... 5 5

References

................................ ................................ ................................ ................................ ............ 5 8

Appendix

................................ ................................ ................................ ................................ .............. 60 Appendix	A:		List	of Exhibits

................................ ................................ ................................ .............. 60 Appendix B :		Example	of	an	interview	template

................................ ................................ ............... 61 Appendix	C :		Common	questions	template

................................ ................................ ....................... 6 4 

### Appendix	D:		Questions	in	the owner

- operator s urvey

.. ................................................... ... ........ 6 6Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 4 

### Executive	Summary

Worldwide ,	light

- duty passenger vehicles	and	heavy

- duty	vehicles	such	as	tractor

- trailers, which	are primarily for	 freight	transport

, account for	about	three

- quarters	of	all	transportat i on	energy use and	climate	impacts (IEA	2009) .	Reducing fuel	consumption and emissions	of	CO 2 and	other	greenhouse	gases	(GHGs)	from	road transport	lessen s the negative	climate	and	energy	security impact s of the transportation sector .		In	 the	US, heavy

- duty vehicles	 account	 for	 4%	 of	 the	 vehicles, but are responsible	 for over 2 0 % of	 the	 total transportation	 petroleum	 use ,	 with	 the long

- haul truck ing sector	 responsible	 for 70 %	 of	 that total (DOE 2009)

. Until	 recently ,	worldwide	efforts	 to	 reduce	energy consumption	 through	improved	vehicle	efficiency have	 been	 focused	 primarily	 on	 light

- duty	 vehicles.	 As	 passenger	 vehicles	 become	 significantly	 more	 fuel
efficient	in the coming	years,	 the	 relative	importance	 of	 the heavy

- duty sector	will	 continue	 to	grow. The potential	impact of widespread	adoption	of	efficiency	technologies	in	the	freight	sector	is significant

. Many efficiency	technologies	are	commercially	available	to	improve	the	fuel	efficiency	of	tractor

- trailers,	yet	many of	the	technologies	are slow to	be adopted.

From	 November	 2012	 through May 2013,	 the	 North	 American	 Council	 for	 Freight	 Efficiency (NACFE) and
Cascade	Sierra	Solutions (CSS) conducted	a	study	for	the	International	Council	for	Clean	Transportation (ICCT)
to	better	understand	the	exi sting	barriers that	are	impeding	the	adoption	of	fuel

- saving technolog ies	for	the

on

- road	freight	sector .	The	project’s	objective is to	seek	a	deeper	and	broader	understanding	of	the	critical questions	in	the	decision

- making	process	related	to	the	adoption of these	technologies

.

Data	for	this project wa s collected	using in

- person	interviews,	focus	groups,	and online surveys	of a	number
of stakeholders	throughout	the	on

- road	freight	industry.		The	stakeholders that were chosen play	important
roles	in	their respective	companies in	the	decision

- making	process about technolog ies	for	tractor	trucks	and
trailers .	 	 The	 team	 engaged	 not	 only	 end	 users (i.e.	 trucking	 fleets	 and	 owner

- operators) ,	 but	 also stakeholders	 throughout	 the	 trucking	 value	 chain.	 The	 end	 use rs	 included	 large (i.e.	 companies	 that	 own more	 than	 1,000	 trucks) and	 medium (100

- 1,000	 trucks) for

- hire	 fleets,	 private	 fleets,	 lease/r ental	 fleets, fleets	 that	 exclusively	 purchase	 used	 trucks ,	 and o wner

- o perators .	 	 The	 other	 stakeholders	 included companies	within	the	truck	and	trailer	supply	chains	that manufacture

, sell

, integrate

, and	service	fuel

- saving technologies. Altogether ,	 the	 companies	 include d leading	 engine	 and	 transmission	 manufacturers, aerodynamic device	 developers,	 tractor	 and	 trailer builders

, truck dealers,	 fleet	 operators,	 shipping companies,	 and owner

- operators .	 In	 all, in

- person	 or	 telephone	 interviews	 were	 conducted	 with 40 representatives	within 29 companies ,	and,	in	addition,	responses	from nearly	1,900 owner

- operator s around the	country	were	received	via	an	online	survey

.

Upon	evaluation	of	 the survey	and	interview	 responses ,	several	barriers	were	consistently	identified across all	of	the	stakeholder	groups .	The	five	predominant	barriers are :

• L ack	of	credible	informationBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 5 • U ncertaint y around the	amount of	 time	needed	 for	 technologies to	pay	 for themselves in	 terms	of fuel	savings	(i.e. payback time)

• L ack	of	access	to capital	cost	to	invest	in	new	technologies

• Questions	as	to	the reliability of	new	technologies

• Lack	of availability	of fuel

- saving	technologies from	preferred	OEMs	or	component	suppliers

These	 five	barriers	do	not	exist	in	a	vacuum	and	are	inherently	link ed in	many	ways ,	which	is	illustrated	in Figure	 1 .	 It	 was	 found	 that	 lack	 of	 credible	 information	 was the overarching	 barrier,	 which	 has	 bearing	 to some	extent	on	all	the	other	barriers.	For	example,	if	there	is	a	lack	of	credible	information	with	respect	to verifying	 the	 real

- world	 fuel

- saving	 potential and/or	 reliability of	 a	 technology

, this	 makes	 accurate calculations	of	payback time a challenging task.		Furthermore,	this	lack	of	information	can	also	influence	the ability	to	obtain	capital	to invest	in	new	technologies. Taken	together,	uncertain	fuel savings	and	reliability	as
well	as	lack	of	access to	capital	contribute	to	slow technology	adoption.	This	depressed	demand	can	result in diminished	manufacturer	investment	in	new	technology	development,	which	can	lead	to	a	reduced	number of	product	offerin gs.	Finally,	this	lack	of	technology	availability has a	feedback	effect by	reducing technology uptake,	which	in	turn	limits	the	ability	for	technology	performance	data	to	be	generated.

Figure	1:	Overview	of	BarriersBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 6 While	 these five barriers	were	identified	as	 somewhat	universal	 for	 the	entire	pool	of	 stakeholders,	not	all stakeholders	are	impacted	 to	 the	same	extent	by	each	barrier.		Based	on	 the	diverse	input	 from	 the	study, there	were	a	number	of	general	differences	in	perspectives among	 the	stakeholders	about	 the	adoption	of efficiency	technology. All	stakeholder	groups	had	a	high	level	of	consensus	with	one	another	on	the	barriers of	lack	of	credible	information	and	uncertainty	around	payback.		Insufficient	capital	was	a	much	bigg er issue for	 the	 small	end	users	 (m edium f leets, used	 truck	 f leets

, and o wner

- operator s )	 than	 their	larger	company counterparts,	 who	 stated	 that	 their	 organizations	 would	 commit	 the	 capital if	 there	 is a high degree	 of
confidence that	 the	 technology will pay back.	 	 End	 users	 were	 generally	 more	 critical	 of	 new	 product reliability	 than	 the component manu facturers or	 tractor	 and	 trailer original	 equipment	 manufacturers ( OEMs ) .		Concerning	the	lack	of product availability	as an important	barrier ,	all of	the e nd	users as	well	as	the manufacturers	 of	 individual	 technologies were	 very	 outspoken about	 this	 issue .	 	 The	 truck	 and	 trailer integrators ,	on	the	other	hand, did	not	see	this as	a significant issue

.

Key f indings

Payback	 time .	 T his	 study	 suggests	 that	 all fleets	make	 decisions	 to	 buy	 new	 technologies	 using	 a	 payback calculation,	 and	 the	 manufacturing	 industry	 also	 uses	 payback	 time	 as	 a	 key	 metric	 in	 determining	 what products	to	develop	and	bring	to	market.		Though	the	responses	varied,	the	stated	expectat ion	for	payback time	 was	 typically	 half	 of	 the	 truck	 ownership	 cycle.	Interview	 responses	 showed	 that	 large	 for

- hire	 fleets generally	 purchase	 new	 trucks	 and	 operate	 them	 four	 to	 six	 years,	 which	 translates	 to	 a	 payback	 time expectation	of	two	years	so	tha t	in	the	final	two	or	more	years	of	truck	ownership,	the	fleet	can	see	a	return on	 investment.	 Truck	 and	 trailer	OEMs	 and	 component	 suppliers	 customarily	 use	 two	 years	 or	 less	 as	 the benchmark	for	payback	time,	which	signals	that	the	requirements	of	the	fl eets	with	the	shortest	ownership cycles	are	driving	the	product	development	process	for	the	entire	industry.	Payback	calculations	seem	to	vary in	terms	of	the	parameters	that	are	included	in	the	calculation	and	tend	to	be	rather	conservative	to	reflect
the uncertainty	surrounding	the	fuel	savings,	reliability,	durability,	and	additional	maintenance	or	operations impacts	that	are	associated	with	a	technology.

Capital	costs. Some	fleets	shared	that	access	to	capital	is	an	issue,	even	if	the	fleet	has	confide nce	that	a	fuel

saving	technology	delivers	a	payback	for	their	operations.		New	equipment	costs	(adjusted	for	inflation)	have increased	significantly	over	 the	past	10	years,	and	 the	money	a	 fleet	can	spend	on	 fuel

- saving technolog ies compete	against	driver	amenities	to	better	attract	and	retain	drivers	and	other	new	technologies	to	improve safety,	communications	and	routing.

Credible	information. V erifying	performance	in	the	early	stages	of	technology	deployment	is	challenging, and

a multitude	of independent testing	efforts	by	multiple	fleets	and	manufacturers	is	commonplace. Conflicting
word

- of

- mouth	 experiences	 about	 technology	 performance often	 causes	 confusion	 with	 fleets	 that	 are interested	 in	 adopting	 a	 technology	 and presents challenges	 to	 manufacturers	 and	 suppliers	 that	 are attempting	overcome	the	mistrust	and	high	degree	of	risk	aversion	that	is	pervasive	in	the	trucking	industry

. Fleets	 seem	 to	 understand	 that	 it	 is	 difficult	 to	 stay	 abreast	 of	 all	 the	 technologies	 being	 d eveloped	 by performing	all	of	the testing	themselves,	but	they	rarely	have	full	confidence	in	external	results.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 7 Reliability. High	reliability	is	a	crucial	 factor	 for	an	end	user	to	purchase	a	technology.		Early	adopter	 fleets
understand	 that new	 products often	 require	 improvements	 in	 later	 generations

. However, based	 on interview	 responses,	insufficient reliability	with	some recent	new	product	launches	has	introduced	concern and	skepticism,	likely	delaying	or	eliminating	demonstration	projects	and	adoption decisions.

This	study	was	solely	focused	on	characterizing the adoption barriers for	fuel

- saving	technologies	for	tractor

trailers ,	not	exploring strategies	for	addressing	or	overcoming them .	However, the	findings	of	this	project	can
lead	to	more	in

- dep th	analysis	of	the	policy	measures	and	other	ways	to	encourage	increased	development and	deployment	of	fuel

- saving	technologies	and	practices	in	the	trucking	sector.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 8 I. Introduction

The	trucking	sector	has	proved	successful	in	improving	efficiency	over the	decades.	The	total	cost	of	moving goods	in	the	U.S.	as	a	percentage	of	Gross	Domestic	Product	(GDP)	has	been	cut	in	half	since	the	early	1980s, from	18%	 to	around	9%,	according	 to	ACT	Research

. While,	 there	are	likely	a	number	of	 factors	 that	have

con tributed	to	this	decline	in	costs,	including	advances	in	logistics	efficiency	(i.e.	routing,	load	management, packaging,	etc.)	and	infrastructure	improvements,	increases	in	tractor

- trailer	fuel	efficiency	have	likely	been an	 important	 contributor	 in	 decrea sing	 the	 overall	 costs	 of	 on

- road	 goods	 movement.	 However,	 many challenges	continue	 to	exist	 for	 trucking	 fleets

, o wner

- operator s ,	and	 the	co mpanies	 that	manufacture and sell	tractor	trucks,	trailers,	and	equipment	used	by	these	heavy

- duty	vehicles.		Some of	the	challenges for	the industry	include	driver	shortages

, high	rates	of	driver	turnover

, rising	co sts	of	 fuel	and	new	equipment and increasingly	 stringent	 regulations	 targeting	 criteria	 pollutant	 emissions	 as	 well	 as	 fuel	 efficiency	 and greenhouse	gases (GHGs).

The	 barriers	 to	 developing	 and	 deploying	 fuel

- saving	 technologies	 are	 the	 subject	 of	 this	 study .	 	 Figure 2
below shows	 a	 2012	 estimate	 of	 the	 cost	 breakdown	 for	 long

- haul	 trucking	 operations	 in	 dollars	 per	mile according	to	the	American	Trucking	Research	Institute (ATRI	2012)

. Fuel	costs,	driver	salaries,	and	the	costs	of the	 trucking	 equipment	 dominate	 the	 overall	 costs	 of	 Class	 8	 tractor

- trailer	 use.	 	 Capital	 equipment	 cost s have	been	rising	sharply	driven	by a	number	of	factors,	including	the	introduction	of	federal	criteria	pollutant emissions	 regulations	 that	 have	 required	 reductions	 in	 particulate	matter	 and	 nitrogen	 oxide	 emissions	 of roughly	90%	over	the	past	10	years. According	to	Manufacturer	Suggested Retail	Price	(MSRP)	data	collected for	 four	 representative	 vehicles,	 the	 price	 of	 tractor	 trucks	 i ncreased	 by	 roughly	 14 %	 (in	 2012	 dollars) between	model	years	2003	and	2012 (Price	Digest	2013)

. However, over this	same	time	period ,	diesel	 fuel
has	had a much	larger	percent increase,	rising	from	an	average	of	$1. 88 per	gallon	in	2003	to	$3.97	in 201 2 (both	values	given	in	2012	dollars) ,	which	is	an	increase	of	111% (EIA	2013 ,	BLS	2013 ) .		For	context,	a	new sleeper	 tractor	 purchased	 in	 2013	 for	 $125,000	 consumes	 roughly	 $125,000	 in	 fuel	 in	 about	 18	 months, assuming the	tractor drives 120,000	miles	per	year	at $4	per	gallon	diesel	and 6 miles	per	gallon.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 9 Figure 2.	Cost	of	Trucking

- Do llars	per	Mile

Source: American	Trucking	Research	Institute,	2012

With	 fuel	 representing	 such	 a	 large	 part	 of	 the	 operating	 costs	 for fleets	 and o wner

- operator s ,	 much attention	is	now	 focused	on	improving	 the	 fuel	efficiency	of	 these	Class	 7	and	 8	 tractor

- trailer	 units.		New technologies	 are	 emerging	 from established and	 new	 equipment	 manufacturers ; and	 some	 fleets	 are aggressively	 investigating,	 testing,	 and	 in some	 cases	 adopting	 these	 new	 efficiency	 technologies	 for	 their tractors	 and	 trailers.	 In	 addition,	 new	 fuel	 efficiency	 and	 greenhouse	 gas	 emission	 regulations	 have	 been adopted	in	the	U.S.	and	Canada	for	model	year	2014	and	beyond.

Two	U.S.

- centric	studies were	recently	completed that investigate	the	extent	to	which t here	are cost	effective efficiency	 technologies	 for	 over	 the	 road	 trucks	 that may not	 being	 adopted	 today .	 	 They	 include	 work completed	by TIAX	( TIAX 2009)	and	the	N ational A cademy	of S ciences ( NAS 2010)

. The TIAX	work	formed	the technical	basis	for	much	of	the	NAS	study,	and	this	research was a	comprehensive	assessment	of	technology potential	and	costs	for	both	long

- haul	trucks	as	well	as	a	number	of	different h eavy

- d uty V ehicle categories. These	studies	reported	that	there	were	technologies	available	for long

- haul tractor

- trailer s	to	improve	their fuel	 consumption	 by	 over	 50%.	 	 Figure	 3	 below	 shows	 the fuel

- saving potential for tractor

- trailer s broken down	 by	 techno logy	 area: engines,	 aerodynamics,	 tires	 and	 wheels, weight	 reduction, hybridization, transmissions	and	driver	coaching. 

### $0.59

$0.19 $0.46 $0.15 $0.15 $0.07 $0.06 $0.04 Fuel

Truck	&	Trailer

Driver	Salary

Driver	Benefits

Repairs	&	Maintenance

Insurance

Permits,	Licenses	&	Tolls

TiresBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 10 Figure	3.	2015

– 2020	New	Vehicle	Po tential	Fuel	Savings	Technologies

Source:		NAS	2010

In	 August	 2011,	 the	 U.S.	 Environmental Protection	 Agency	 (EPA)	 and	 the	 Department	 of	 Transportation’s National	Highway	Traffic	Safety	Administration	 (NHTSA)	 finalized	a	national	program	 to	 reduce	greenhouse gases	 (GHGs)	and	improve	 fuel	efficiency	 of	medium

- and	 heavy

- duty	vehicles.	The	 program affects	model year	(MY)	2014	to	2018	ve hicles,	and	tractors are	a	key	component	of	the	rule .		T railers	were	not	addressed in	 this	 Phase	 1	 rulemaking.	 The	 stringency	 for	 tractors	 ranges	 between 10 % and	 23%,	 depending	 on	 the vehicle	 configuration	 and	 gross vehicle	 weight	 rating	 (i.e.	 Class	 7	 or	 8).	 The	 standards	 are	 designed	 to encourage	deployment	of	commercially	available	 technologies,	and	 for	 tractors,	 the	agencies	estimate	 that the	 technologies	 that	will	be	deployed	as	a	result	of	 the	rule	have	a	pa yback time	of	2	years	or	less ,	which reflects	the	agencies’ cost

- effectiveness	targets for the	Phase	1	regulation

.

Literature	review

Much	attention	in	 the	 social	 sciences	 has	 been	 paid	 to	 the	 “energy	 paradox,”	 the	 phenomenon	 that	 some energy	efficiency	measures	are	not	being	implemented	in	places	where	it	is	cost

- effective	 to	do	so	 (Shama 1983).	However,	most	of	 this	work	has	been focus ed	on goods	used	by	consumers	 (for	example,	efficiency improvements	 in	 house hold	 appliances and	 passenger	 vehicles) rather	 than goods	 used	 by	 businesses.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 11 Nonetheless,	the	idea	of	the	energy	paradox	offers	an	important	foundation	for	studying	market	barrier s	in
the	on

- road	freight	sector.

In	 trying	 to	 understand	 what	 drives	 and	 inhibits	 the	 diffusion	 of	 new	 technologies,	 economists	 have considered	how	adoption	is	shaped	by	both	awareness	of	new	technologies	and	changing	costs	and	benefits for	 individual	 pu rchasers	 (Jaffe	 and	 Stavins	 1994).	 While	 these	 processes	 may	 be	 different	 for	 each technology	 and	 sector,	 economists	 have	 identified	 a	 number	 of	 market	 barriers	 that	 inhibit	 diffusion.	 For energy	efficiency	 technologies	in	particular,	 these	include	several market	 failures	and	other	difficulties	 that drive	the	energy	paradox.

Firstly,	a	common	barrier	to	increased	energy	efficiency	is	a	lack	of credible information	about	technologies. If	 information	 on	 energy	 efficiency	 is	 underprovided,	 this	 constitutes a	 market	 failure	 (Jaffe	 and	 Stavins 1994) .	 However,	 this	 barrier	 could also	 simply	 be	 due	 to	 the	 high	 costs	 faced	 by	 each	 actor	 of	 obtaining information	and	performing	cost

- benefit	calculations.	Another	major	market	failure	is	the	principal

- agent,	or split

- incentive	 problem,	 which	 exists	 if	 the	 actor	 that	 uses	 energy	 does	 not	 also	 pay	 for	 energy	 or	 energy efficiency	investments,	leading	to	an	overuse	of	energy	or	an	under investment	in	energy	efficiency (Jaffe	and Stavins	1994).

Several	barriers	also	relate to	the	uncertainty	inherent	in	making	energy	efficiency	investments.	For	example, technology	will	be	underused	if	firms	are	unable	to	access	credit	due	to	lack	of	money	available	to	invest,	or	if
firms	are	 unable	 to	communicate	 the	 benefits	of	 their	inves tment	 to	a	 creditor	 or	when	 reselling	 the	 unit. Due	 to	uncertainty	about	a	 technology’s	effectiveness	and	 the	prices	of	a	 technology	and	energy,	a	 firm	or consumer	could	rationally	decide	that	the	benefits	are	too	uncertain,	or	that	it	makes	sense	to	prese rve	its “option	value,”	the	ability	to	wait	to	see	if	a	better	investment	would	be	available	in	the	near	future	(Ansar and	Sparks	2009).	Other	studies	have	focused	on	behavioral	drivers	of	the	energy	paradox	(Ansar	and	Sparks 2009),	although	these	have	bee n	focused	on	consumer	goods.

In	 researching	 available	 technologies	 for	 heavy

- duty	 vehicle	 efficiency,	 the	 project	 team	 reviewed	 other studies	related	to	the	barriers	to	technology	adoption	in	commercial	vehicles	used	in	regional	and	long

- haul goods	m ovement. Several	studies	have	looked	at	market	barriers	particularly	for	energy	efficiency	in	the	on

road	freight	sector,	although	it	has	historica lly	received	less	attention	than other	sectors.	Most	studies	have used	 surveys	 and	 interviews	 to	 assess	 marke t	 barriers.	With	 the	 exception	 of	 the	 split

- incentive	 problem, studies	 found	market	barriers	to	be	more	significant	 for	smaller	companies	and	technologies	that	require	a significant	capital	investment.

A	study	of	the	European	freight	sector	commissioned	b y	ICCT	found	evidence	that	there	are	typically	greater barriers	 to	 technology	 improvements,	 with	 many	 trucking	 companies	 opting	 to	 investment	 in	 operational improvements	 instead.	 Another	 finding	 was	 that	 smaller	 firms	 had	 less	 ability	 to	 research	 technolog ical improvements	 and	 to	 protect	 against	 growing	 fuel	 prices	 (CE	 Delft	 2012).	 Similarly,	 an	 online	 survey	 of trucking	companies	in	Finland	found	that	effective	but	simple	actions	(i.e.	idling	reduction,	speed	limitation, checking	tire	pressure)	were	implem ented	more	often	than	those	requiring	larger	investment	or	knowledgeBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 12 (especially	if	there	are	a	lot	of	options	available,	as	is	the	case	with	motor	oils	and	tires)	 (Liimatainen	et	al. 2012).		NACFE	(2011)	studied	adoption	rates	in	the	United	States	fleet	o f	a	range	of	technologies,	identifying high	costs	of	information,	difficulty	with	monitoring	costs,	and	lack	of	increased	resale	value	due	 to	energy efficiency	as	inhibiting	the	adoption	of	certain	technologies.

Goodyear	 Dunlop	 (2012)	 interviewed	 fleet	ma nagers	 in	 the	 European	 Union	 and	 found	 that	 nearly	 half	 of respondents,	 especially	 smaller	 companies,	 said	 they	 lacked	 the sufficient knowledge	 of	 the	 technology available	to	increase	fuel	efficiency.	Real

- world	evaluation	was	often	cited	as	the	only	relia ble	way	to	test	for fuel	efficiency,	as	companies	reported	lack	of	trust	in	fuel	savings	claims	made	by	OEM’s.	These	risks	caused firms,	especially	smaller	ones,	to	focus	on	smaller	investments	involving	maintenance	and	retrofitting	rather than	 purchasing new	 trucks.	 The	 Carbon	 War	 Room	 (2012)	 identified	 large	 upfront	 costs	 and	 small	 profit margins	 in	 the	 trucking	 sector,	 truck	 leasing	 practices,	 and	 a	 lack	 of	 awareness	 and	 trust	 in	 fuel	 efficiency upgrades	as	barriers	in the	United	Sates.		Similarly, Ellra m	and	Golicic ( 2011)	found	that	lack	of	information and	difficulty	financing	upgrades	were	major	barriers,	especially	for	smaller	firms.

Several	 studies	 also	 found	 evidence	 of	 contract	 structures	 that	 created	 split	 incentive	 problems.	 Of	 the respondents for	the	CE	Delft	study	(2012),	a	roughly	50%	of	trucking	companies	used	fuel	surcharges	and/or open	book	contracts,	which	allow	firms	to	directly	pass	on	fuel	costs	(or	additional	fuel	costs	after	surpassing a	 defined	 threshold)	 to	 the	 shipping	 (or	 client) entity.	 In	 another	 example	 of	 how	 contract	 structures	 can create	 split	 incentives,	 the	 Carbon	 War	 Room	 (2012)	 found	 that	 leased	 trucks	 tended	 to	 be	 less	 energy
efficient.

The	 findings	 from	 these	 previous	 studies	 provided	 the	 team	 insights	 for	 designing the	 data	 collection	 and analytic	framework	for	this	project.	From	the	various	studies,	a	number	of	findings	became	clear.	Foremost,	it was	 clear	 that	 there	 are	 many	 technologies	 for	 the	 tractor

- trailer	 that,	 when	 combined,	 can	 dramatically
increase	fuel	ef ficiency.	Efficiency	technologies	are	available	for	the	powertrain	(e.g.,	engine,	accessories,	and transmission)	 as	 well	 as	 tractor	 and	 trailer	 load	 reduction	 (e.g.,	 lightweighting,	 aerodynamics,	 tires)	 (NAS, 2009;	US	NREL,	2013).		Many	of	 these	 technologi es	are	available	not	only	 for	new	heavy

- duty	vehicles,	but also	for	existing	in

- use	fleet	(Transplace,	2012;	NACFE,	2013;	CWR,	2012;	Ellram	and	Golicic,	2011).		Several
research ers have begun to	 better	 understand	 why	 the	 efficiency	 technologies	 are	 not	 bei ng	 more	 widely adopted	in	the	market	place	(e.g.,	CE

- Delft,	2012).

There	are,	however,	significant	barriers	to	adopting	these	technologies.	This	study’s	intent	is	to	work	with	the industry	 to	 identify	and	 better	 understand	 the	 barriers	 that	exist	 to	adopt ing	 these	 technologies	 on	North

American tractors	and	trailers .	The	objective	of	the	project	is	to	use	interviews	and	surveys	of	various	entities within	the	trucking	sector	to	better	understand	the	specific	barriers	that	exist	in	deploying	technologies	tha t improve	fuel	efficiency	in	Class	7	and	8	tractor

- trailersBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 13 II. Study Design	and	Methodology

This	 section	 outlines	 the	 major	 elements	 and	 rationale	 for	 the	 study	 design	 and	 methodology.	 	 The methodology	 for	 the	 study	 was	 developed,	 in	 collaboration	 with	 IC CT	 and	 involved	 surveying	 eleven stakeholder	 groups	 (e.g.,	 large	 fleets, o wner

- operator s ,	 shippers,	 manufacturers).	 	 Overall,	 the	 surveys
included	in

- person	interviews	and	focus	groups,	conference	calls,	and online input	from	various	stakeholders within	the	long

- haul	trucking	industry.		As	part	of	the	processing	of	the	high	volume	of	input,	the	study	team processed	 the	interview	and	 survey	 results	 from	 dozens	 of	 questions	into	 overall	 themes during a	 findings
worksh op conducted	in	February	2013.

Survey	design

The	 focus	of	 the person

- to

- person	interviews and online	 survey	was	 to	engage	individuals	 from	companies that	 are	 involved	 in	 the	 use,	 development,	 manufacturing,	 sales,	 and	 aftermarket	 support	 for	 tractor	 and trailer	 technologies.	 To	 better	 reach	 companies	 that	 are	 actively	 making	 decisions	 regarding	 fuel

- saving technologies,	 the	project	 team	 targeted	“ l ead u sers”	 for	 the	in

- person	and	 teleconference	interviews. Lead

u sers is	a	 term	developed	by Prof essor Eric	von	Hipp e l (Von	Hippel	2005) of	 the	Massachusetts	Institute	of Technology	and	refers	to	companies	that	are	“ ahead	of	the	majority	of	users	in	their	populations	with	respect

to	an important	market	 trend and	expect	 to	gain	 relatively	high	benefits	 from a	solution	 to	 the	needs	 they
have	encountered	there .”

During	and	after	the	interviews,	the study team	worked with lead	users to	ensure	the	data	collected	during interviews	 clearly	 reflects	 their	 perspectives	 on	 the	 barriers	 to	 technology	 adoption,	 their own	 decision

making	process	with	regard	to	truck	and	trailer	technology,	and	the other	companies that	are	connected	to all	aspects	of	 their	industry. As	aforementioned, lead	users were targeted from	 two	general	areas

– end users	and	industry	supply	chain

– and	several	stakeholder sub groups were	identified within	these	areas.	End

users, as	defined	in	this	study ,	are	those	companies	or	individuals	who	buy	and	operate	commercial	tractor
trucks. Many of	 the	 fleets	interviewed	 for	 this	project	have	been	early	adopters	of	a	number	of	 fuel

- saving technologies	 for	 both	 tractors	 and	 trailers. Individuals	 within	 companies	 who	 make	 the	 actual	 purchase decisions	whether	or	not	to	invest	in	technologies	for	im proved	fuel	efficiency	were	targeted	for	interviews. This	 end	 user	 group	 includes	 fleets	 (large,	 medium,	 private/retail,	 lease/rental,	 used	 truck)	 and o wner

operator s (i.e.,	 as	 defined	 in	 this	 study,	 those	 individuals	 or	 companies	 who	 own	 and	 operate	 less than	 5 trucks).		The	second	area,	the	industry	supply	chain,	includes	companies	that	support	the	development,	sale and	 delivery	 of	 the	 technologies	 into	 the	marketplace.	 	Within	 this	 area, the	 project	 team	 targeted	major truck	 original	 equipment	 manufactu rers	 (OEMs)	 as	 well	 as	 key	 component	 suppliers	 (e.g.	 engines, transmissions,	tires,	aerodynamic	devices)	that	are	responsible	 for	bringing	various	 fuel

- saving	technologies
to	market. In	addition,	truck	dealers	were	also	included	in	the	project.

Data	was received	and	analyzed	from	the	groups	shown	inBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 14 Table 1

. Companies	participating	in	 this	 study	included: A&M	Transport Inc.

, ATDynamics Inc.

, Bettendorf Trucking Enterprises ,	 C

. H

. Robinson Worldwide	 Inc. ,	 C

. R

. England,	 Cummins Inc. ,	 Daimler Truc ks	 North

America LLC ,	 Decker Truck	 Line	 Inc. ,	 Eaton Co. ,	 Freight W ing Inc. ,	 Frito

- Lay North	 America	 Inc. ,	 Gordon Trucking Inc. ,	Great	Dane,	Hyundai Translead ,	Michelin North	America	Inc.

, Navistar Inc. ,	Peloton Technology

Inc. ,	Peterbilt,	Ryder,	Safeway Foods,	Schneider,	Smart Truck,	Sturman	Industries,	Transfreight

, United	Parcel
Service	of	America	Inc. ,	Volvo	Truck s , Werner Enterprises, Witte	Brothers Exchange	Inc.,	and	YRC	Worldwide

Inc

. Owner

- operator s from	 two	 distinct	 solicitation	 groups participate d in online surveys :	 customers	 of Cascade	Sierra	Solutions	financing	tools	and	Kevin	Rutherford’s	Let’s	Truck	Sirius	XM	radio	membership.

Table 1

. Industry	Stakeholder	Groups	S urveyed

Area Stakeholder	Group Comments
End	users Large	fleets For

– hire	trucking	companies	with 1

, 00 0 +	trucks

Medium	fleets For

– hire	trucking	companies	with 100

- 1

, 00 0
trucks

Used	fleets Purchase	only	used	trucks	for	their	operations

Retail

- Private	fleets Operate	trucks	to	haul	goods	they manufacture and/or	distribute	and	sell

Lease	and	Rental	fleets Lease	and	rent	trucks	to	other	end	users

Owner

- operator s (<5	trucks) Independent ,	small	businesses Supply
chain Tractor	OEMs Builders	of	tractors	who	integrate	technologies

Trailer OEMs Builders	of	trailers	who	integrate	technologies

Established component manufacturers Established,	mature	suppliers	to	the	trucking industry New	technology	suppliers Emerging	manufacturers	w ith	new	technologies,
often startup	firms

S hippers and Logistics Freight	brokers	linking	shippers	and	carriers

Truck Dealers Sales,	aftermarket, repair and customer	support

Stakeholder	d escriptions

Large	Fleets

– These	customers generally own	in	excess	of	1

, 000	class	8	tractors	and	operate	for

- hire	as	TL	(truck load)	or	LTL	(less	than	truck	load)	carriers. For	these	fleets, dry	van s are the	predominate trailer type
, followed	by refrigerat ed	 trailers and	 intermodal	 chassis.	 They	 operate	 sophisticated	 routing	 a nd	 logistics	 operations	 and maintain	their	equipment	at	their	own	service	facilities ,	but	use	other	service	locations	frequently	as	the	trucks are	randomly	dispersed	around	the	geography	serviced	by	the	fleet

. It	is	common	for	drivers	to	be	on	the	road
fo r	up	to	three	weeks

, returning	home	for	a	few	days	before	leaving	again.		A vast majority	of	the	tractors	haveBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 15 sleepers	with	sophisticated	communications,	entertainment	and	other	amenities	for	the	drivers	who	essentially
“live”	 in	 their	 trucks. As	 describ ed	 in	 more	 detail	 in	 the	 findings	 section	 below,	 t rac tors	 are generally traded every	4

- 6 years to	ensure	maximum	uptime	and	fuel	efficiency.	Therefore

, high	residual	values	are	important	to
their	business	model.	Most	of	 these companies operate	in	all lower 48	states	 (or	all	provinces	of	Canada) ,	and

some do business	 in	 Mexico.	 They	 primarily	 use	 company	 drivers	 but	 many contract o wner

- operator s for specialized	freight	or	to	handle	seasonal	or	peak	load	periods.	Company	driver	turnover	is	an	issue and	a verages around	 100%	 per	 year	 over	 the	 economic	 cycle

. Some	 of	 these	 fleets	 utilize	 significant	 numbers	 of o wner

operator s as	independent,	dedicated	contractors	to	manage	variability	in	their	business.

Retail/Private	Fleets

– T hese	companies	are	either	in the	business	of	hauling	 their	own	products	between	 their plants	and	distribution	centers	and	to	the	retail	market	or	in	the	retail	package	delivery	business.	Private	 fleets can	 be	in	 the	manufacturing,	wholesale,	 retail,	 food	 or	 beverage	 business.	In	addi tion	 to	class	 8	 tractors	many operate	 class	 5

- 7	 delivery	 units	 on	 a	 local	 basis.	 Typically	 the	 retail/private	 fleet	 who	 owns	 their	 trucks keeps
them	7

- 10	years or	even	longer .	Nearly	half	of	all	Private	 fleets	utilize	 full	service	maintenance	leasing	as	 th eir primary	business	in	not	trucking	and	they	do	not	want	to	invest	in	their	own	service	facilities. Driver	turnover	is quite	 small,	 around	 22%	 versus	 about	 100%	 for	 for

- hire	 fleets,	 as	 the	 drivers	 are	 company	 employees	 with benefits,	including	retirement and	401k	plans

. About	90%	of	the	tractors	are	daycabs	as	the	routes	are	designed for	the	drivers	to	return	to	a	company	facility	each	night. Private	fleets	will	tend	to	consider	retrofitting	devices on	their	 fleet	as	they	keep	their	vehicles	 for	most	if	not	all	of their useable	life,	giving	more	time	to	realize	the
benefits	of	the	devices.

Medium	Fleets

– They	operate	over	100	but	less	than 1

, 000	tractors	primarily	in	the	Truck	Load	for

- hire	segment of	 the	 business.	 Many	 operate	 on	 a	 regional	 basis	 or	 haul	 specialized	 freight	 nationwide.	 Trailers	 include	 dry freight	 &	 refrigeration	 vans	 and	 platform (flatbed) trailers	 for	 hauling	 equipment	 or manufacturing	 materials. They	 have	 many	 of	 the	 same	 challenges	 as	 their	 larger	 for

- hire	 counterparts,	 but	 driver	 turnover	 tends	 to	 be lower	as	the	smaller	companies	can	better	interact	with	the	operators.

Lease/Rental

– This	vocation	includes two very large	NAFTA	 firms

, Ryder	and	Penske,	some	regional	companies
and	truck	OEM	associated groups	of	independent	truck	dealers.	They	purchase	class	3

- 8	trucks	to	rent	or	lease	to others	 (primarily	 to	private	 fleets).	Rental	 trucks	are	 for	shorter	 terms	and	lea sed	 trucks	 (charged	at	a	monthly and	per	mile	basis)	for	longer	terms.	Lease	companies	handle	the	spec ify ing,	purchasing,	financing,	licensing	and maintenance	 for	 their	own	 trucks.		Their	service	 facilities	also	provide	washing	and	 fueling	 for	 their	custom ers. Many	leasing	companies	operate	their	own	resale	lots	due	to	the	short	trade	cycle	and	high	vol ume	of	trucks	in this	vocation,	and	may	function	as	a	fleet	utilizing	equipment	that	they	choose	not	to	sell.		Leasing	companies	are known	 for	 their	 high	 lev el	 of	 understanding	 of	 how	 the	 equipment	 performs

, particularly	 in	 its	 reliability	 and durability.		Due	to	the	fact	that	they	have	the	exposure	in	the	lease	contract	for	poor	reliability but	not	for	fuel efficiency ,	 these	companies	monitor,	 track	and	make purchase	decisions with sophisticated	 tools	 to	 thoroughly understand	every	component’s	reliability.

Used	Fleets

– Fleets who	primarily	purchase	used	 trucks	in	 the	 for

- hire	business	are	considered	used	 fleets	 for this	study.	They	typically	operate	under	20 0	units,	primarily	class	8	tractors,	and	have	shorter	hauls	than	the	largeBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 16 fleets	as	many	operate	on	a	regional	basis.		Their	business	model	is	focused	more	on	lower	cost	freight	thus	the dependence	on	lower	priced	used	trucks. They	depend	on the	first	tr uck	purchaser’s specification	expertise	and their	 own	 understanding	 of	 the	 duty	 cycles	 they	 operate	 in	 when	 they	 select	 these	 used	 trucks.	 	 These	 fleets might	consider	retrofits	and	tend	to	perform	much	of	their	own	maintenance,	as	they	are	attempting	to	e xtend the	equipment ’ s	usable	life.

Shippers	and	Logistics

– Shippers	are	characterized	as firms	who	need	to	move	freight.		They	are	the	customers	of the	 fleets/carriers. Over	 the	 past	 few	 decades	 a	 new	 brokering	 enterprise	 has	 emerged	 known	 as Third

- party Logistics	 providers.	 	 These firms	 work	 between	 Shippers	 and	 Carriers	 to	 make	 efficient	 decisions	 for	 using equipment	 to	 ship	 freight. These	 companies	 help	 make	 choices	 concerning	 various	 intermodal	 methods	 (rail, long

- haul truck,	 regional	 trucks,	 ships, etc.),	 routing	 and	 load	 sharing,	 to	 name	 a	 few	 strategies. Some	 also operate	a	fleet	on	a	for

- hire	basis

, and	some	do	not.

Owner

- operator s

– These	are	small	business	people	who	own,	maintain	and	drive	their	own	trucks.	They	can	own
between	 1

- 5 units,	 mos tly	 class	 8	 tractors	 used	 for long

- haul for

- hire	 trucking. From	 the	 survey	 results,	 t hey primarily	 purchase	 used	 tractors	 (average	 age	 7	 years)	 and	 drive	 them an	 average	 of 105,000 miles	 annually.
About	70%	of o wner

- operator s are	leased	by	the	mile	or	percent	of	the	load	to	larger	carriers,	mostly truckload
firms. Leased o wner

- operator s tend	 to	 have	 more	 security	 and	 get	 more	 benefits,	 such	 as	 truck leasing/purchasing	 options,	 using	 the	 company’s	 fuel	 cards,	 training	and	 load procurement. The rest	are truly independent	contractors	often	obtaining	their	 freight	via	an	association	with	large	logistical	 firms	like	Land Star
and	 Dart ,	 or	 occasionally	 on	 their	 own	 via	 emerging	 internet	 based	 tools

. As	 discussed	 in	 more	 detail	 in	 th e findings	 section,	 t hey	 often	 own	 their	 own	 trailers	 and	 operate	 on a	 1:1	 trailer	 to	 tractor	 ratio,	making	 trailer technologies	more	attractive	for	them	as	their	trailers	are	constantly	accumulating	the	miles	and	benefits.

Tractor OEMs

– Truck	Original Equipment	Manufacturers	are	worldwide	designers	and	builders	of	class	5

- 8	trucks and	 tractors.	 For	 North	 America	 they	 build	 units	 in	 NAFTA	 and	 retail	 and	 support	 their	 products	 through	 a channel	 of	 independent truck	 dealers.	 All	 truck	 OEMs	 also	 offer	 both commercially	 available	 and	 proprietary powertrains	including	engines,	transmissions	and	axles.	They	also	provide	customer	financing	and	a	full	menu	of after	the	sale	support. These	 firms	engineer	and	integrate	 features	onto	the	equipment	they	manufacture and must	make	tradeoff	decisions	to	include	items	that	help	deliver	efficiency	and	operations	improvements	for	their end	user,	fleet	customers. For	some	product	features,	OEMs	control	the	design	very	tightly,	including	intellectual property	rights	and fo r others; they rely	on	suppliers	for	the	technologies. Oftentimes,	the	OEMs	are	those	who manage	 regulation compliance surrounding	 emissions	 and	 other	 requirements	 such	 as	 safety,	 etc.	 	 These companies	have	extensive	engineering	and	product	validation	requirements	and	capabilities	to	ensure	their	and their	suppliers’	products	meet	the	regulatory	and	customer	expectations. They	develop	extensive	understanding of	 how	 their	 customers	 use	 their	 products,	 have “ voice ” of	 the	 customer	 processes	 to	 define	 design requirements,	design,	prototype and	test ,	demonstrate,	manufacture	and	support	the	products.

Trailer	OEMs

– Trailer	O riginal	Equipment	Manufacturers	are	primarily	US

- based	builders	of	highway	trailers	used in	 commercial	 transportation.	 Products	 include	 dry	 freight	 vans,	 refrigerated	 vans,	 platform	 (flatbed)	 trailers,
tanks

, and	 intermodal	 container	 chassis.	 Like tractor OEMs	 they	 sell	 and	 su pport	 their	 products	 through	 anBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 17 independent	 channel	 of	 OEM	 contracted	 trailer	 dealers. Compared	 to	 tractors	 OEMs,	 trailer OEMs	 have less employees, and their product	development	cycle	times	are	much	shorter.

Established Component Suppliers

– These	 companies	 provide	 engines,	 transmissions,	 clutches,	 front	 and	 rear axles,	suspensions,	brakes	systems,	electrical	components

, tires ,	etc. to	the	truck	and	trailer	OEMs.	They	promote components	branded as	their	own	but	will	also provide pr ivate	label	components	for	OEMs	if	desired. Most	have been	in	the	industry	for	most	of	the	100+	years	it	has	existed	and	continually	develop,	build	and	sell	products	that meet	customer	expectations.		They	understand	the	intricacies	of	the	business	very	we ll	and	have significant	and deep	relationships	with	the	end	user	fleets	and o wner

- operator s .		These	relationships	are	useful	as they promote efficient	 development	 of	 capable	 and	 robust	 products	 for	 their	 customers’	 customers.	 	 At	 times,	 this	 creates

some	 t ension	 with	 the	 tractor and	 trailer	 OEMs,	 but	 ultimately	 collaboration	 is	 strong	 as	 tractor	 and	 trailer builders	work	closely	together	to	deliver	the	features	integrated	on	the	equipment	for	production.

New	 Technology	 Suppliers

– As	 emissions requirements	 have	 expanded	 and	 fuel	 prices	 doubled	 in	 the	 last	 6 years,	new	technologies	have	emerged	from	supplier s who	are	either	startups	or	have	not	supplied	the	trucking industry	 in	 the	 past.	 	 These firms	 have	 emerged	 out	 of research	 institutions or vehicle	 markets	 such	 as	 the passenger	car	industry. Sometimes,	companies	in	t his	group	of	suppliers are	less	knowledgeable	of	the	trucking industry	and	oftentimes	offer insights	that diverge	from	views	of the established manufacturers.		For	this	study,	a diverse	 group was	 selected,	 which	 included	 companies	 that	 specialize trailer	 aerodynamics,	 advanced	 engine
controls

, and	operational	telematics respectively

.

T hese	 12	 groups,	 including	 the	 truck	 dealers,	 offer	 a comprehensive set	 of	 perspectives o n the	 barriers	 to technology	 adoption. Each	 stakeholder	 group	 was	 asked	 common	 questions	 to	 more	 deeply	 understand	 all perspectives on	a	topic .		In	some	cases,	the	supply	chain	interviewees	were	asked	to	provide	answers	from	the
end	user s perspective.		Tha t	is,	answer	this	question	as	you	think	your	customer fleet s	would.		For	example,	all were	asked	the	required	payback	period	in	months	that	is	acceptable	 for	a	 fleet	to	move	 forward	a	purchase	a technology. As	mentioned	earlier,	 companies	and	individuals selected	 for	interviews	and	 the o wner

- operator s included	in	the	survey, are	often lead	users .		They typically understand	and	recognize	the	opportunities	that	fuel
efficien cy tech nologies can offer	 their	 businesses	 and	 have	 a	 perspective	 of	 those companies who are late r adopters	or	non

- adopters.

Data	collection

The	study	ultimately	included	four	different	data	collection	tools .	Table	2	summarizes	the	four	main	methods	of

in

- person	interviews,	conference	calls,	focus	groups,	and online surveys.		The	methods	were	chosen	to	maximize the	amount	of	information	that	could	be	gleaned	from	various	industry	stakeholders	in	an	efficie nt	manner. The project	team	interacted	with	individuals	within	larger	firms	via	both	face

- to

- face	meetings	and	c onference	phone calls	using	interview	templates.		An	online	survey	was	developed	to	solicit	responses	from o wner

- operators. Example	survey	templates	and	interview	questions	can	be	found	in	Appendix	B,	C	and	D.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 18 Table2.		Summary	of	Data	Methods

Data	colle ction	method Targeted	lead	users Details

In

- person	interview • Large f leets

• Established c omponent

s uppliers • Typically	1

- 2	hours

• 1

- 4 individuals	from the

companies

• Many	times	conducted	at

Truck	Shows/Events

• Examples	companies:

Werner

, Great	Dane, Daimler, Volvo	&	Navistar

Conference	call • All	other	companies where	it	was	impractical

to	meet	in

- person • Typically	1	ho ur

• Excellent	attendance

–

none	needed	to	be
rescheduled.

• 1

- 4	individuals

• Examples	companies:

Cummins,	Eaton, Frito	Lay, Peterbilt,	etc.

Focus group • Truck	Dealers with representatives	from	the
American	Truck	Dealers

Association. • L asted 1	hour

• 6	Dealer	Principles

representing	5	of	the	6 major	NA	truck	brands

• Large ,	competent	dealers

from	all	US	regions

On

- line	survey • Owner

- operator s and small	companies (<10 trucks) • Designed	to	take 30 minutes	to	complete

• Let’s	Truck:	1

, 796

respondents

• CSS:	96	respondents

• In	total,	respondents	own

or	operate 4,000 trucks

Truck s how w alk

- arounds • All	stakeholders

• Discussed	preliminary

findings	with	dozens	of company	representatives
and o wner

- operator s • Conducted at the Technology	and
Maintenance	Council Meeting	in	Nashville	and
the	Mid	American	Truck Show	in	Louisville,	March

.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 19 In

- person	interviews	were	 desired	 for	all	 companies	 other	 than	 the o wner

- operator s as	 the	 team	 believed that	this	offered	the	most	robust	form	of	interviews	and	data	collection.		The	project	budget	only	allowed	for

in

- person	 interviews	 at	 truck	 shows/event s	 or	 while	 the	 interview	 team	 was	 visiting	 a	 particular	 company location	 for	 another	 purpose. Typically	 one	 member	 of	 the	 study	 team	 participated	 in	 these	 in

- person sessions. This	 worked	 well	 as	 42%	 of	 the	 company	 interviews	 were	 completed	 in

- person.	 	 80% of	 the targeted	firms identified	by	the	study	team, agreed	to	participate	in	the interviews	and	all	29	interviews	were conducted	when	scheduled.		Interviewees	titles	included;	Director	of	Operations	and	Maintenance,	Director Vehicle	 Technologies,	 Fleet	 En gineer,	 Fleet	 Fuel	 Director,	 Founder	 and	 CEO,	 General	 Manager

– Logistics Engineering	 and	 Development,	 Manager	 Advanced	 Engineering,	 President,	 Vice	 President	 Engineering, Product	Manager,	 VP	 of	 Engineering	 and	 VP	 Sales. This	 approach	 generated	 input	 from individuals at	 the level	 of	 the	 company	 that	 has	 authority	 to	 make	 decisions	 in	 the	 area s	 of	 purchasing, development and integration	of	fuel efficiency	technolog ies. Ultimately,	the	in

- person	interviews	resulted	in the	most	detailed
and rich data.		The same	data	collection	templates	were	used	for	in

- person	and	conference	call	interviews.

The	conference	calls were	utilized	for	companies where	the	team	believed	input	was essential and	where	an

in

- person	 interview	 was	 not	 practical .	 	 These	 calls	 were	 very efficient	 and	 attended	 by	 the	 key	 decision makers	 at	 the	 companies.	 	It	 was	 clear	 that	 the	 participating	 companies	 were	 committed	 to	 providing	 the insights	the	team	was	interested	in	receiving. For	these	calls,	one	study	team	member	was	the	interviewer

an d	a	second	took	detailed	notes.

A	f ocus	group was only utilized	for the	truck	dealers.		The	American	Truck	Dealers,	a	division	ofthe	National
Automotive	Dealers	Association (NADA) ,	was	very	helpful	in	organizing a	 focus	group	event at	 their	annual meeting in	February	2013	in	Orlando

, Florida.		The	dealers	were	very	vocal	and	 their	insights	important	 to
add ing an	additional	stakeholder	perspective	o n the	barriers to	technology	deployment

.

The online survey	 approach was	 used	 to	 gain	 a better understanding of	 the o wner

- operator s that	 haul freight.		The	team	identified	two	groups	that	are	knowledgeable	on	the	technologies,	their	opportunities	and barriers	 to	 adoption.	 	 Cascade	 Sierra	 Solutions	 finances	 retrofits	 for	 these	 small	 businesses,	 and	 Kevin
Rutherford	 of Let’s T ruck has	 a membership	 via a	 satellite	 radio	 show	 and	 a	 business that	 offers tools	 for
small	business management.		The high	level	of	participation	of	these	groups	evidences	a	large	interest in fuel efficiency and	 technology opportunities

. Presumably,	 a	 large	 percent age of	 the	 surveys	 were	 completed
from	the	cab	of	their	trucks.

Post

- survey	analysis

After	completing	 the	in

- person	and	 teleconference	interviews,	 the	 first	 step	in	 the	analysis	was	 to	compile notes	from	the	sessions	and	transpose	the	responses	onto	the	t emplate	survey	forms,	which	were	developed for	each	of	the	industry	groups.	In	addition, direct	quotes	were	recorded	by	the	interviewees.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 20 The	online	survey included	29	questions	and was	conducted	between December	13,	2012 and February	11,

2013 .	In	the	 first	phase	of	online effort surveys	were	sent	out	a	group	of	companies	and	individuals	 from	a Cascade	Sierra	Solutions	database,	and 96 responses were	received ,	of	which 74% completed	every	question. The	second	phase	of	online	surveys	reached	a	m uch	larger	group of people	due	 to	a	collaboration	of	Kevin Rutherford,	who	has	a	nationwide	trucking	focused	radio	program and	consulting	business

, Let’s	Truck .	From this	group	of Let’s	Truck listeners, 1,796 online	surveys	were returned,	and	82%	responded to	every	question. Responses	were	 received	 from	all	over	 the	country in	both	sets	of	 respondents .		The	CSS	survey	 responses are	mapped	in	Figure	3.

Figure 4.	CSS	Survey	Respondents’	Location

The	next	step	in	the	analysis was	to	distill	the substantial	data	set into	useable	forms	for further	analysis .		This was	 completed	 through	 completing various analysis	 documents	 such	 as	 key	 insights	 for	 each	 stakeholder group,	 a	 summary	 spreadsheet	 of	 all	 the	 answers	 to	 the	 common	 questions	 and	 common	 and disparate conclusions	 from	 stakeholder	 groups.	 	 This	 data	 was	 prepared	 for	 the	 team’s	 subsequent	 step,	 which
included identifying	 key	 themes	 that	 were	 evident	 across	 all	 of	 the	 industry	 groups.	 This	 exercise	 was primarily	 carried	 out	 during	 a late	 Februar y	 2013, two

- day	 workshop	 for	 the	 entire	 project	 team ,	 ICCT representatives,	one	of	the	expert	panel	and	support	from	the	Carbon	War	Room.		The	workshop	began	by reviewing	all	the	available	data	collected	and	initial	analysis	performed,	which	led	to	the	ide ntification	of anBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 21 initial	set	of	barriers.		The	 team	challenged	 these	preliminary	 findings	using	various	 tools	and	made	certain that	they	were	truly	what	the	interviewees	and	survey	respondents shared .		The	team	coalesced	around	the eventual	 key	 findings	 a nd	 documented	 the	 work	 in	 a	 “Preliminary	 Project	 Findings”	 document.	 	 The	 final deliverable	of	the	workshop	was	to	test	these	findings	with	four	distinct	groups ,	shown	in T able 3 below.

Table	3 .	Preliminary	Findings	Reviews

Group Attendees Details
Expert Review	Panel • Nigel	Clark,	West	Virginia University

• 

### Susan	Mazur

- Stommen

,

A merican	Council	for	an Energy	Efficient	Economy

• Bruce	Stockton,	Fleet

Consultant • 1	hour	conference	call	with

Susan	on	site

• Group	previously reviewed

the survey design

• Received significant

questions	and	feedback

Industry • Bill	Kozek,	General Manager,	Peterbilt

• Jim	Williams,	retired

Executive,	Navistar • In	person	review	with	the team	at	the	workshop

• Industry provided

perspective	on the	study findings

EPA • Various	Environmental Protection	Agency personnel • 1	hour	conference	call	at the	end	of	the	workshop

• Participants	from

Washington,	DC	and	Ann
Arbor

• Robust	Q&A

NHTSA • Various	National	Highway Traffic	Safety Administration		personnel • 1	hour	conference	call
within	one	week	of	the workshop

• Robust	Q&A

As	 is	 described	 in	 detail	 in	 the	 following section ,	 five	 primary	 barriers	 to	 the	 adoption	 of	 fuel

- saving technologies	emerged	in	the	analysis: lack	of	credible	information, uncertainty with	respect	to	payback	time, insufficient	capital,	unacceptable	reliability

, and	lack	of	commercial	availability.

After	identifying	the	five	primary	barriers,	the	next	step	in	the	process	involved	analyzing	how	the	responses
varied	within	each	of	the	i ndustry	groups.	Table 4 provides	a	high

- level qualitative summary	of	the	degree	of consensus	 for	each	of	 the	interview	groups	across	 the	 five	barrier	categories. In	general,	 there	was	a	high level	of	consensus	with	respect	to	the	lack	of	credible	informat ion	and	uncertain	payback	as critical barriers. The	significance	of	 the	access	 to	capital	was	a	larger	issue	with	 the smaller	end	users,	while	 the	larger	sizeBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 22 fleets	including	 the	private	and	lease	 fleets said	 they could	get	 the	capital	with	sufficient	co nfidence	in	 the payback	analysis.		End	users	were	more	critical	of	the	reliability	of	new	features, while the	supply	chain	had	a moderate	 agreement.	 	 The	 fleets	 and	 suppliers	 had	 a	 high	 degree	 of consensus concerning	 the	 lack	 of availability	barrier,	while the	integrators	 (tractor	and	trailer	OEMs)	somewhat	concurred. E ach	of	these	 five barriers	is	discussed	in	the	detail	in	the	following section

.

Table 4 .	Qualitative	Summary	of	Interview	and	Survey	R esponses

Survey	Group Number	of
interviews

or surveys Degree	of	consensus	across	primary	barrier	areas

Credible
information Uncertain payback Insufficient capital Unacceptable reliability Lack	of availability Large	fleets 5 G G R G G
Medium	fleets 1 G G G G G
Used	fleets 2 G G G G G
Retail

- Private	fleets 4 G G R G G
Lease	and	Rental
fleets 1 G G R G G

Owner

- operator s 1,892 G G G G Y

Tractor	OEMs 4 G G Y Y Y
Trailer	OEMs 2 G G Y Y Y
Established
manufacturers 3 G G Y Y G

New	technology suppliers 5 G G G Y G

Shippers	&	Logistics 2 G G N/A Y N/A

Green:	high	degree	of	consensus;	yellow:	moderate	consensus;	red:	low	degree	of	consensusBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 23 III. Findings

This	section	reports	on	findings	of	the	analysis	o f	the	input	gathered	from	the 15 one

- hour end	user	company

interviews

, 6 large	 truck and	 trailer	manufacturers

, 14	 supply	 chain	 companies and	 1,892 o wner

- operator s via	 internet	 surveys.	 	 Based	 on	 the	 process	 identified	 in	 the	 previous section for	 filtering	 results	 from	 the various	 survey methods

, the	 team	 then	 mapped	 key	 answer	 analytics	 and	 interviewee	 quotes	 to	 better explain	each	of	the	barriers.

Lack	of	credible	information about	the	total	cost	of	ownership	and	reliability	of	technologies in	early	stage s of deployment as	well	as	a	deficiency in	information	sharing across	 the	industry as	 technologies	mature were identified	 as	 overriding barriers to greater	 rates	 of adoption.	 Uncertainty	 around	 the	 payback	 for	 an

investment	in a technology	and	the lack	of access	to	capital	to	actually	make	the purchase were identified	as
barriers that	are	highly	interrelated .		I nsufficient	 reliability	of	 the	product	in real

- world operation s and	 the
lack	of availability	of	the	features	from	a	majority	of	the	tractor/trailer	OEMs	were	also	barriers	identified	by

t he	 team based	on	 responses provided	by various	end	user	 stakeholders

. Each barrier is addressed	in	 this section	of	the	report	by	describing	the	barrier, providing	representative stakeholder quote s that	capture	the
essence	of	the issue, and analyzing	the	extent	or	agreement	or	disagreement	both	within	each industry group and	across all	of the stakeholder	categories.

Uncertain	Payback Time

Based	on	responses	from	end	user	fleets,	m any	technologies	do	not	seem	to	have	acceptably	short payback for	adoption.

“It’s	all	about	our	payback	calculation!”

– multiple	end	users	and	supply	chain	companies

.

Payback	time,	as	defined	in	this	study,	is	the	time	it	takes	for	the	cumulative	fuel	savings	of	a	technology	to offset	the	additional	capital	and	operating	expenses	presented	by	that	technology. Across all of	the	industry groups,	 there	was	 consensus	 that	 p ayback	 time	 is	 the	most	 important	economic	 calculation	 in	guiding	 the decision	making	process	of	whether	or	not	to	investment	in	a	fuel

- saving	technology.

One	 of	 the	 key	 boundary	 conditions	 in	 a	 payback	 analysis	 is	 the	 expected	 time	 that	 a	 fleet	 or	 indiv idual intends	 to	 own	a	 truck.	All	 of	 the	interview	 responses	 confirmed	 previous	 research	 findings	and	anecdotal evidence	that	trucking	fleets	require	payback	times	that	are	shorter	than	their	ownership	cycles	so	that	the technology	can	not	only	offset	the additional	capital	investment	but	also	provide	a	return	on	investment.	As discussed	in	more	detail	in	 the	Capital	Cost	section	below,	 fuel

- saving	 technologies	are	often	not	valued	in secondary	 markets,	 which	 makes	 it	 that	 much	 more	 important	 that	 technolog ies	 pay	 for	 themselves	 well
within	the	time	that	a	fleet	owns	a	tractor	or	trailer.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 24 As	 reported	 by	 the	end	 user	 fleets	in	 this	 study,	 truck	 ownership	 cycles	vary	widely,	as	 shown	in	Figure 5

. Private	fleets	tend	to	keep	their	trucks	longer,	while	large for

- hire	carriers	tend	to	sell	their	trucks	after	four to	six	years	to	secondary	user s,	which	are	referred	to	“used	t ruck	fleets”	in	this	study.		The	shortest	reported trade	 cycle	 was	 four	 years,	 and	most	 of	 the	 for

- hire	 fleets	 stated	 that	 they	 are	 trying to	 lower	 their	 truck ownership	times	back	to	four	years	after	extending	ownership	times	during	the	recess ion	to	5,	6,	and	7	years

. ACT	Research	reports	that	the	average	truck	age	increased from	around	6 to	about	7	years	as	a	result	of	the

recession ( Vieth ,	 Kenny ,	 personal	 communication, April	 30, 2013)

. According	 to	 interview	 responses from
for

- hire	fleets, their trucks	average	about	120,000	miles	per year, and	these	fleets tend	to	buy	new	and	sell trucks	 when	 the	maintenance	 costs	 reach	 an	 unacceptable	 l evel	 at	 about	 500,000	 to	 700,000	miles.	 	 	 The
trucks	 then typically move	 into	 lower	 mileage	 routes	 operated	 by	 smaller	 fleets

, o wner

- operator s ,	 and agricultural	operators for	rest	of	their	life.

Figure 5

. Tractor	Trade	Cycle s

In	 all	 of	 the interviews,	 t he	 team	 received	 responses	 on	 the	 acceptable	 payback	 period ,	 and	 for owner

operator s ,	 this	 data	 was	 collected via online surveys and is	 summarized	 in	 Figure 6 .	 Large,	 medium	 and lease/rental	 fleets	 stated	 that	 a	 payback	 time	 between	 12	 and	 24	months	 is	 required,	 while	 private	 fleets reported	 that	 a	 longer	 payback	 period

– 24	 to	 36	months	 or	more

– is	 acceptable.	 	Of	 all	 of	 the	 industry 

### 0" 2" 4" 6" 8" 10" 12"

A" B" C" D" E" F" G" H"

Large"For6Hire" Retail"Private" 

## Trade&Cycle&in&Years&

Avearage"="5.5" Avearage"="9.0"Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 25 groups,	the	distribution of	responses	about	required	payback	times	was	most	varied	for	the o wner

- operator s

. Though	 over	 80%	 of owner

- operator s reported	 an	 ideal	 payback	 time	 of	 2	 years	 or	 less,	 the	 respondents reported	 payback	 time	 preferences	 of	 up	 to	 3	 or	more	years. For	 retrofi t	 technologies,	 p ayback	 periods	 of less	than	24	months	were	deemed	reasonable	by	92%	of	the o wner

- o perator	respondents.

Figure 6 .	Acceptable	Payback	for	Technologies

The	 responses	 from	 end	 user	 fleets	 are	 contrasted	 somewhat	 by	 the	 replies	 from	 the	 new	 technology suppliers	 and	 tractor	 and	 trailer	 OEMs. The	 technology	 suppliers	 and	 OEMs	 were	 asked	 to	 take the perspective	 of	 an	 end	 user	 trucking	 fleet, and the reported p ayback	 time	 requirements from these manufacturer	groups was ,	on	average,	shorter	 than	 those reported by	 the	 fleets.		This	seems	 to	imply	 that manufacturers	are,	in	general,	more	conservative	in	terms	of	their	belief	as	to	what payback	times the	fleets will	accept.	This view that	end	users	require	very	short	payback	times	(less	than	a	year	in	roughly	half	of	the manufacturer	 responses) likely	 has important	 implications	 on	 the	 decision

- making	 process	 about	 product development	activities by	the suppliers

.

A	truck OEM General	Manager summarized	the	acceptable	payback	period	for	long

- haul trucking	as	follows: “The	customer	sees	[payback	time]	as	one

- half	their	trade	cycle,	which	means	18	to	24	months	on	trucks	kept 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Private/Retail Large Medium Lease/Rental Truck	OEMs Owner	Operators Tradiuonal	Suppliers Trailer	OEMs New	Tech	Suppliers

<12	mos

12-24	mos

24-36	mos

>36	mosBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 26 about	 4	 years	 before	 trade	 time. ”	 Based	 on	 interviewee	 responses	 about	 their	 own	 business	 models	 and attitudes	 about	 the	 trucking	 sector	 as	 a	 whole,	 payback	 times	 of	 roughly	 one

- half	 of	 the	 truck	 ownership cycle	seem	to	be	the	industry	norm.	Given	this	rule

- of

- thumb,	it	follows	that	larg e	for

- hire	carriers	require	a more	 rapid	 return	 on	 investment	 due	 to	 shorter	 ownership	 cycles,	 while	 private	 fleets	 allow	 for	 longer payback	periods,	as	 they	 tend	 to	operate	 the	equipment	 for	more	years.	However,	 the	interviews	 revealed
that	there	are	some times	other	non

- monetary	factors	such	as	“green	image”	or	shipper	requirements,	which may	cause	a	fleet	to	extend	the	payback	period	to	justify	purchasing	the technology

.

While the reported	preference	 for	payback	time	was	generally	in	the	range	of 12

- 24 months, the questions about	payback	resulted	in	a	variety	of	responses.		For	example, some l arge f leet s stated :

• “ [The	 payback	 requirement	 is] 36	 months	 or	 less,	 maximum	 payback	 is	 48 months but varies	 by equipment	type .	T railer	trade	cycle is	about 10 years ”

- Vice	President

• “Nothing ’s set
, but	usually [the	payback	requirement	is] 24	months,	also	want	15% return	on	capital .”

– V ice P resident, Purchasing

• “ [The	payback	requirement	is] 18	months	on	tractors	based	on	3

- 4	year	trade	cycle	and	36	months	on
trailers	based	on our 7	year	trade	cycle.	Local	dealer	gives	good	residuals	so	that	drives	shorter	truck trade	cycles	and	trailers	must	me e t	new	EPA	and	CARB	requirements .”

- Vice	Presid ent

• “ [The	 payback	 requirement	 is] 24	 mo nths

. [We]	 c an	 usually	 calculate	 maintenance	 and	 reliability gains.”

- Fleet	Fuel	Director

• “We	retrofit	if	we	believe	there	is	enough	life	left	 for	payback.		We	trade	our	trucks	at	4	years	and
retrofits are generally become	challenging.	“

- Vice	President

Medium and u sed F leets	had	similar	responses,	with	interesting	caveats:

• “ [We	 select	 a	 technology]	 i f	 the	 return	 on	 investment	 is	 2	 years	 or	 less

, and	 the product has low
maintenance.”

– Chief	Executive	Officer

• “ [We	select	a	technology]	i f	return	on	investment	is	2	years	or	less, we	might add	to	our	application.”

- Director	of	Operations	and	Maintenance

• “ [To	 select	 a	 technology]	 w e	 would	 need	 to	 have	 a	 tested	 3

- 4%	 fuel	 savings	 with	 a	 quick	 ROI	 (12

mo nths	or	less ) to	spend	resources	on	new	technology.”

– V ice P resident	of Operations

As	stated	above,	responses	from	private	fleets	clearly	reflected	their	long er trade	cycles:

• “ [The	payback	requirement	is] 25%	ROI	or three

- and

- a

- half years	if	it’s	with	a	new	truck	purchase.”

- Fleet	Engineer

• “ [We]	k eep	tractors	about	12	years	and	trailers	15+.”

- Director,	Engineering

• “As	always

, payback	is	 the	big	 thing.	Since we keep	 trucks	 so	long we do	more	 retrofit s than	most
carriers	with	shorte r	trade	cycles.	“

- Fleet	EngineerBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 27 • “Due	to a longer	trade	cycle	(10	years)

, we will	consider	doing	more	retrofits	than	a	lot	of	larger	long

haul	carriers.	“

- Fleet	Engineer

Truck	OEMs	tended	to	expect	short	payback	periods:

• “It	is all about	payback.		Sh orter	the	better	no	matter	how	much	it	costs.”

- Product	Manager

• “Internally

, [we] use	18	months	to	justify	adding	the	feature	to	our	products

. ”

- Product	Manager

• “If	the	fuel	saving	technology	pays	back	for	the	customer	and	for	our	investment. 1

- 2 years	is	the	most common	payback	period.”

- Marketing	Manager

• “ [We	aim	to	provide] payback	that	meets	the 1

- 2 year	customer	criteria.		Many f uel

- s aving	technologies can	provide [this] payback

. ”

- Marketing	Manager

• “[ An OEM ’s decision s to	offer	or	improve a	fuel

- saving	technology	is]	based	on	cost/benefit	(tooling	and fixed	costs)	v ersus ability	to	collect [a	higher	sale] price.”

- Director,	On

- Highway	Vehicle	Strategy

• “Fuel	savings [i.e.	fuel

- saving	technologies] are	targeted	for	the	on

- highway	long

- haul	c ustomers	more so than for lower	 speed,	 lower	 mileage	 operations.	 	 Criteria	 is	 1

- 2	 year	 payback	 on	 the	 fuel	 savings.”

- Marketing	Manager

Some	m ajor	component	manufacturers stated :

• “We	think	fleets	want	12	to	18	months.”

- Strategic	Business	Segment Manager

• “18	months [for	the	payback	time	requirement] is	typical	in	over

- the

- road	tractor

- trailers.”

- Director, Vehicle	Technologies	and	Innovation

Finally, the	General	Sales	Manager	of	a trailer	OEM asserted :		“Trailer	life	is	now	10	to	12	years

, up	fro m	8	a few	years	ago.		This	should	help	adoption [of	fuel

- saving	technologies] as	the	fleet	has	more	time	to	gain	the payback.”

A	number	of	end	users were	asked	how	the	payback	calculations	reflected	their	unique	business	models	and duty	cycles.		Technologies	 for	 tractor

- trailers	vary	widely	in	 terms	 of	additional	 capital	 costs	and	 operating expenses,	 and	 fuel	 savings	 benefits	 are	 often	 intimately	 link ed	 to	 operating	 characteristics	 such as vehicle speed,	payload,	grade,	and	ambient	conditions,	which	can	be	different	from	fleet

- to

- fleet	and vary based	on geographic	location.		All	of	 the	 fleets	were	asked	what	elements are included	in	 their	payback	calcu lations

. The	answers	ranged	significantly

, showing	that	some	fleets	are	more	detailed	and	thorough	in	their	analyses. A	few	fleets	mentioned	categories	of	payback	items	in	terms	of	“hard	costs”,	those	that	are	easily	measured and	directly attributable	to the	technology .		They	include	such	items	as	the	fuel	savings,	upfront	cost	of	the device,	maintenance

, infrastructure

, and	training.		Second a re	what	some	called “soft	costs”, which	are costs that	are difficult	 to estimate and	generally	not	included	in	 the payback calculation .		Some	examples	of	soft
costs	 include impacts	 to resale	 value,	 reliability	 and	 driver	 attraction	 and	 retention.	 	 Finally,	 a	 fleet	 might
include directional	“plus es /minuses ”	that become	bullet	points	in	the	analysis	where	costs	cannot	b e	defined. These	 include	 sustainability initiatives

, green imag ing ,	 safety impacts, and	 shipper	 requirements. AsBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 28 described	by	some	of	the	larger	fleets	in	response	to	the	payback	questions,	when a	fleet	manager	conducts the	payback	analysis	and	provides	the formal proposal	to	their	 finance	organization,	many	of	the	soft	costs and	plus/minuses	are	removed	from	the	proposal.

Most technology suppliers	develop	payback	calculators,	share	them	with	t heir	potential	customers

, and	put
them	on	their	websites.		Tractor	and	trailer OEMs use	these tools and also develop	their	own	calculators	to evaluate	 various	 technology	 solutions	 for	 inclusion	 in	 their	 product	 development	 pipelines.	 	 Those	 more promising technologies get	 a	 higher	 priority	 i n	 their	 engineering	 plans.	 	 F inally,	 fleets perform payback
calculat i o ns in	order	to inform	the decision of	whether	to purchase	the	technology and what supplier or	OEM from	which	to	acquire	the	technology

. In describing the	challenge	of	calculating	payback ,	a Vice	President	of
one	 of	 the large	 fleet	 carrier s stated	 that,	 “Suppliers	 do	 not	 provide	 all	 the	 elements	 of	 a	 strong	 payback analysis	and	the	fleets	are	maybe	too	conservative	in	the	calculations

, due	to	being	burned	in	the	past .” He went	on	to	describe	an	actual	situation	where	they	were	studying	a	potential	safety	feature,	an	anti

- collision product	 that	alerts	 the	driver	via	 radar	of	close	proximity	hazards	near	 the	 truck.		During	a	significant field trial	of	dozens	of	vehicles	with	and	without	 the	device,	where	 the	company	was	using	 telematics	 to	collect data, a field	engineer	noticed	a	sizeable	savings	in	fuel	as	the	result	of	the	operators	driving	the	trucks	more cautiously.		This	fleet decide d	not	to	include	these fuel	savings	as	a	benefit	to	the	safety	feature,	as	this was

not a	fuel efficiency project,	but	a	safety	one

, and	those fuel savings were	not included	in	the	payback. This provides	an	example	of the	conservative	nature	of	these	calcu lations.

As	a	 result	of 1) the	difficulty	of	 testing	 the real

- world	performance	of technologies and 2)	a	 feeling	of	 the fleets	that	technology suppliers generally	oversell	the benefits	and	minimiz e the	challenges

, it is	rational	that
fleets’ payback	analyses	 tend	 to	 be	 conservative	in	 nature.		It	is	 clear	 that	 there	 does	 not	 seem	 to	 be	any standardized,	universally	used methods	in these	calculations	throughout	the	industry ,	which	is	likely	due	to the	highly	diverse	nature of	 the	 trucking	indu stry	and	 the	desire	of	 fleet	managers	and	owner

- operators	to utilize	payback	calculations	that	best	represent	their	unique	conditions

.

Many	of	these	techn ologies can be	retrofitted	on to	trucks	already	in	service.		This	can	be	a	good	strategy	for
fleets	t o	take	advantage	of	the	benefits,	if	there	is	sufficient	time in	the	life	of	their	equipment	ownership for the	technology	to	payback. As	shown	earlier, retail	private fleets	shared	a	greater	interest	in	retrofitting	due to	 their	longer	ownership	period. Fleets	 reported	using	 the same	payback	calculation and decision

- making

process for retrofit technologies as	technologies	included	on	new	tractors	or	trailers

.

In	 summary, this	 study	 suggests	 that	 all fleets	 make	 decisions	 to	 buy	 new	 technologies	 using	 a	 payback
calculation

, and	 the manufacturing industry also	 uses	 payback time as	 a	 key	 metric	 in	 determining	 what products	 to	develop	and	bring	 to	market

. Though	 the	 responses	varied ,	 the	stated	expectat ion	 for	payback time	 was	 typically half	 of	 the truck ownership	 cycle.	 Interview	 responses	 showed	 that	 large	 for

- hire	 fleets generally	 purchase	 new	 trucks	 and operate	 them	 four	 to	 six	 years,	 which	 translates	 to	 a	 payback	 time expectation	of	two	years	so	tha t	in	the	final	two	or	more	years	of	truck	ownership,	the	fleet	can	see	a	return

on	 investment. Truck	 and	 trailer	 OEMs	 and	 component	 suppliers customarily	 use	 two	 years	 or	 less	 as	 the benchmark	 for	payback	 time,	which	 signals	 that	 the	 requirements	of	 the	 fl eets	with	 the	 shortest	ownershipBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 29 cycles	are	driving	the	product	development	process	for	the	entire	industry. Payback	c alculations	seem	to	vary in	terms	of the	parameters	that	are	included	in	the	calculation	and	tend	to	be	rather	conservative	to	reflect
the uncertainty	surrounding thefuel	savings,	reliability,	durability,	and	additional	maintenance	or operations impacts	that	are	associated	with	a	technology

.

Capital Cost

Often,	t here	is	a	lack	of	capital	for purchasing	fuel

- saving new	technologies.

“Due	to	the	high	costs	of	the	trucks	now,	I	simply	cannot	get	the	capital	for	these	features.”

– V ice P resident of Operations,	a medium

- sized	fleet

Many	e nd	users	expressed	that	the	high	cost	of	new	trucks	is	a	challenge	for	purchasing	many	of these new , additional features

. At	times,	there	is	an	acceptable	payback period on	a technology, but	fleets	still	choose not	 to	 buy them due	 to	 the ir high	 upfront	 cost. Based	 on	 responses	 from	 all	 of	 the	 end	 user	 stakeholder
groups,	 t he	overall	cost	of	 the	 tractor has	increased	dramatically	over	 the	last	six	years .		Many	shared	 that
the	overall	costs	of	new	trucks	and	the	financial	constraints	since	the	recession	have limited th e	availability	of capital	for	many	actions	the	fleets	would	like	to	take

.

Fleets	and	tra ctor	OEMs	confirmed	that	new	tractor	costs	are	up	significantly	in	the	past	years	due	to some	of the	following factors .		The	costs	shown	below	are	an	aggregation	of	com ments	made	by	many	interviewees.

• In	 total,	 engine	 modificaitons	 and	 aftertreatment syst ems	 that	 were	 required	 to	 meet	 crtieria pollutant	emissions	regulations in 2002, 2007 ,	and 2010 have increased	the	cost	o f	trucks on	avera g e about $15,000	combined

• Driver	ammenity	features	added	to	trucks	to	attract	and	retain	operators	during	a	signfican t	industry shortage,	safety	features

, and	material	cost	increases	have	added	another	$10,000	on	average

.

From	the	interview	responses ,	the	$9 0 ,000 to	$100,000	price	for long

- haul tractor s	with sleeper cab s in	2006

now	costs on average	between	$115,000	and $135,000 ,	which is roughly a	2 0

- 30 %	increase	in	7	years

. Fuel

saving technologies generally	add	costs	 to	 the	new	 truck	and	increase	 the	amount	of	money	 the	purchaser needs	to	justify	and	in	many	cases	finance

.

The V ice P resident of	Operations of	 a medium	 fleet shared	 that, “Regulations	 have	mandated	 a	 generous amount	of	capital	to	be	spent	meeting	regulations,	particularly	in	California .”	An owner

- operator specifically stated	 that	 “many	 of	 us	 believe	 that	 air	 quality	 regulation	 compliance	 restricte d	 our	 investments	 in	 fuel

saving	 technologies.”	 	 They	 continued,	 “We	 would	 be	 more	 apt	 to	 work	 on	 incorporating	 fuel	 saving technologies	 if	 the	 capital	 was	 available.”	 	 The	 fleets	 seem	 to	 not	 rely on or	 even	 ex pect f ederal	 or s tate
incentive s	 to	help	pay	 f or	 the	devices .	M ost	shared	 that	 they	pursue	incentives	if they	exist,	but	 rarely use any	expectation	of	incentives	in	their	payback	calculation s .		Therefore, they	do not typically	factor	incentivesBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 30 into	their purchase	decision.		This	study	did	not	specifically	ask	to	what	degree	the	financing	mechanisms	in existence	 today	effectively	support	 technology	adoption.		Future	 research	into	 the	areas	of	unique	 funding mechanisms	 that	 are	 being	 implemented	 in	 other	 cl eantech	 ventures	 such	 as	 solar	 and	 wind can be conducted	to	more	fully	understand	the	opportunity	for	them	to reduce this	barrier in	the	trucking	industry

.

The President of	a	new	 technology supplier expressed	a	 somewhat	opposing	view	 stating	 that:		“Acces s	 to capital	does	not	seem	to	be	an	issue ,	for	products	with	strong	payback .” T his	vendor believes that	the	capital
would	become	available	if	the	cost	of	his	devices	and	their fuel	savings	benefits were	carefully	considered.

As	 discussed	in	 the	 previous section	 on	 payback	 time,	a key factor in the	 financial	 calculation	is	 the	 resale value	of	the	tractor.		Oftentimes, a new	technolog y ,	even	when	appropriate	for	the	second	owner,	do es not have much (or	 any) value	 in	 the	 used	 truck	 market	 until	 the re	 is	 more widespread	 adoption	 of	 the technology

. The Director	 of	On

- Highway	 Vehicle	 Strategy of	a	 truck	OEM stated	 that	 “The	 increase	 in	EPA
mandated	costs	make s everything

– cost	of	finance,	maintenance,	purchase	price,	service	and	driver	training

– more	expensive and	none	of	 this	added	cost	will	increase	 the	 resale	value	of	 the	 truck. N ew	 technologies take	 a	 long	 time	 to	 gain	 confidence	 and alter	 the resale	 value.” In	 the	 focus	 group	 of	 truck	 d ealers ,	 this

sentiment	 was reiterated : “ new	 technologies	 take	 a	 long	 time	 to	 gain	 confidence	 and impact	 the resale
value.”

This	study	asked	all	interviewees	what	factors	most	influence	their	specifications	for	new	equipment. Figure

7 shows	 the	 results	 of	 this	 question	 and	 demonstrates	 the	 hig h	 value	 fuel	 economy has	 on	 new truck specifications. A long	with	fuel	economy ,	r eliability,	maintenance	and	durability	have	an	equally	high	influence on	purchasing	specifications.		Many	interviewees	stated	 that	 fuel	economy	would	have	been	a	much	lower priority	if	surveyed	even	just	five	years	ago.		Resale	value	is	somewhat	important,	likely	again	driven	by	the varying	ownership	life.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 31 Figure 7

. Importance	of	Factors	Influencing	Spec ifications

Specific	to	the	question	of	resale	value,	t he	four	private	fleets	rated	the	influence	of	resale	as	not	very	or	not important	at	all,	while	tractor	and	trailer	manufacturers	and	suppliers	rated	it	somewhat	important,	probably averaging	their implicit understanding	of	the	requirements	of	all	the	flee ts.		Most	interesting	in	the	analysis was	the	greatly	divergent	responses	of	the	five	for

- hi re	fleets.		Their	responses	var ied	from very	important	to

not important,	as	shown	in	Figure 8 below. When	asked	follow

- up	questions,	it	appears	that	the	fleets	who value	 resale	as	not	important	or	not	very	important	see	 fuel	economy	as	such	a	key	new	 requirement	 that they	 are	 deciding	 to	 not	 allow	 the	 resale	 si tuation	 to	 be	 a	 major	 influence against	 adoption	 of	 these technologies. They	stated	that	the y will	keep	th e	trucks	longe r	if	they	are	delivering	the	MPG savings	rather than	 sell	 them	 if	 the	 used	 truck	 market	 does	 not	 value	 that	 specification.	 	 A	 fleet Vice	 President shared, “Since	fuel	got	about	$2	per	gallon,	we	track	the	cost per	mile	down	to	1/10	of	an	MPG

, and	it’s	more	about operating	costs	than	resale.” 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% OEM	Make Fleet	Image Driver	Recruit/Retenuon Resale	Value Durability Maintenance Fuel	Economy Reliability

Very	Important

Important

Somewhat

Not	Very

Not	ImportantBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 32 Figure 8

. Value	of	Resale	to	each	Company

In	summary,	some	fleets	shared	that	ac cess	to	capital	is	an	issue, even i f the	fleet	has	confidence that a	fuel

saving	technology deliver s a	payback	for	their operations .		New	equipment	costs (adjusted	for	inflation) have increased	 significantly over	 the	past	10	years, and the	money a	 fleet	can	 spend	on	 fuel

- saving technolog ies compete	against	driver	amenities	to	better	attract	and	retain	dr ivers	and	other	new	technologies to	improve safety,	communications and routing.

Credible	Information

It	can	be very difficult	to	predict	the	performance	of	technologies	for the trucking	sector.		Many	duty	cycles over	vastly	different	geographic	regions	and	environmental	conditions	and	diverse	business	models	of	fleets exist	in	 the	North	American	 trucking	industry. The	Study team	 found	 that	 the	lack	of	credible	information

occur red	 in	 two	 phases	 over	 a	 technology’s	 development,	 demonstration

, and	 adoption .	 F irst,	 in	 verifying that	the	technology	is	valid in	specific applications and	then later

, in	sharing	that	information	throughout	the industry	in	order	to	maximize	the	benefit	o f	the	technology	across	the	vocatio ns	appropriate	for	it.		Figure 9 shows	a	typical	new	product	adoption	curve ,	based	on	the	work	of	Everett	Rogers	in	Diffusion	of	Innovations (Rogers	 1962 ,	 150 ), in	which he broke	 down the	 customer	 uptake into	 groups: innovators,	early	 adopters, early	and	late	majority	and	laggards.		The	study	team	added	the two	phases	of	credible	information	barriers
to	the	chart.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 33 Figure 9

. Information	across	Adoption	Cycle

Credible	Information Verifying (Early)

In	many instances,	end	users	have difficulty	obtaining	data	on	new	technologies in	order to	make informed purchase decisions.

“We	only	buy	what	we	test

– only	trust	ourselves”

– a	large	fleet Vice	President

Many	 end	 users	 stated that	 the	 inability	 to	 verify	 perf ormance	 claims	 of manufacturer’s devices	 was preventing	 them	 from	adopting	efficiency	 technologies.		The	vast diversity of variables	 such	as truck	make and	 model,	 duty	 cycles,	 business	 models,	 geography, and weather	 makes	 fleets	 and o wner

- operator s hesitant	 to	 believe	 that the performance	 results from	 manufacturer ’s	 tests are applicable	 to	 their	 own operations.		Fleets want confidence	that	the	technology	deliver s benefits ,	so	they	generally	test technologies in	their	own	application s after	reviewing the public	and	manufacturer

- supplied data	available	to	them

. Table

5 offers	answer s ummaries to	some	questions	asked	with	respect	to	how	often	fleets	require third

- party	tests from	 manufacturers	 and	 when	 they	 conduct	 their	 own	 testing. In	 the	 early	 stag es	 of	 a	 technology’s deployment ,	there	is a limited	amount	of information

, and	fleets	tend	to	default	to	testing	themselves. The Director	 of	 Vehicle	 Technologies	 and Innovation for	 a	 well

- established	 component	 supplier	 stated that

, “Fleets	have	a	general	mistrust	of	standardized	drive	cycles	and	the	associated	test	results,	as	they	will	not reflect	 the	 performance	 of	 the	 technologies	 in	 their	 operations.”	 	 A Product	 Manager for	 a	 truck	 OEM

, somewhat	 frustrated	with	 this sentiment	o f	 fleets

, stated, “ [A	 fleet’s	belief	 that	a	 technology’s	 fuel	savingsBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 34 results	will	be	different	if	applied	in	their	operations] oftentimes	leads	to	a	distrust	of	the	data provided by suppliers and	OEMs .		Budget	and	time	to	conduct	their	own	testing	is definitely	a	barrier	to	early	adoption	of technologi es.		Our	industry	is	a	‘show	me’ one.” Nevertheless,	manufacturers	continue	to	demonstrate	the performance	 of	 their	 products using standardized test	 protocol s to	 help	 the	 fleets	 understand	 how	 the
techno logies	 deliver benefits in	 the	 real	 world .	 	 As the V ice P resident	 of Engineering for one	 trailer	 OEM stated:		“We	go	from	concept	to	design	to	validation	testing	to	production.	Testing	usually	takes	3

- 6	months.
We	use	a	wind	tunnel	to	test	and	measure	effe ctiveness	of	aerodynamic	products	and	the	Bosch	test	track	to internally	test	our	products	for	durability	and	to	also	validate	fuel	savings	data. Many	features	we	offer	are customer	requested.”

Table	5. Interview	Answers	to	Testing Questions

Do	you require	testing	by	a	3 rd party? Yes No Some

times

39% 26% 35% If	yes,	what	%	does	the	supplier	pay? All Half

80% 20% Do	you	require	a	trial	in	your	fleet? Almost	all
the	time Most	of
the	time Some

times Rarely

26% 52% 5% 0%

The	 team	 asked	 all	 interviewees	 how	 the	end	 users	 valued	 information	 from	 various	 sources,	 as	 shown	 in Figure 10 below.		By	a	large	margin,	the	fleets	value	their	own	testing	on	a	technology	and	use	other	sources to	help	validate	it.		Other	fleets’	input, attained	either	directly	or	at	industry	events	such	as	the	Technology and	Maintenance	Council’s	 (TMC) Annual	Meeting	and	Transportation	Technology	Exhibition,	ranked	higher than	 information	 from	 manufacturers,	 OEMs	 and	 the	 EPA	 Smart Way	 Program.	 	 As	 a	 medi um	 fleet	 CEO shared,	“ We	are	keeping	abreast	of	what	other	larger	 fleets	are	doing	and	attend	most	TMC	meetings	and seminars	on	new	technologies	and	alternative	fuel	advancements.”

One	major component manufacturer’s	Head	Engineer for	On

- Highway	Products	uses	a	collaborative	model	to test	its	products: “Internally	we	develop	and	design	product	features	and	test	them	for	validation.	We	have
our	 own	 test	 truck	 drivers	 who se ‘ truck	 driver ’ input	 is	 valuable	 to	 us.	 We	 do	 trial	 runs	 with	 larger fleet customers	for	further	validation.	We	then	take	the	product	to	the	truck	OEM	to	get	their	buy

- in .	T his	process can	be	slow,	especially	if	it	involves	hardware	changes	or	chassis	reconfiguration	of	the	truck.		If	we	only	need to	make	software	changes this	process	is	much	easier	as	OEMs	give	us	free	reign	on	the ‘ black	box ’ in	most cases.	 One	 example	 of	 a	 1

- 1.5%	 fuel	 savings	 change	 we	 learned	 by	 making	 our	 air	 compressor	 naturally aspirated	has	not	yet	been	accepted	by	OEMs.”Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 35 Figure 1 0

. Value	of	Various	Information	Sources

The President	and	CEO of	a	large	fleet stated	that ,	“Data	is	difficult	to	acquire	and	researching	other	data	is

t o o	time	consuming ; therefore,	we	only	work	on	big	opportunities .” The Director	of	Engineering of	a private
fleet shared that ,	“Occasionally	we	combine	tests, for	example, mud	flaps	and	wheel	covers	with	a	tire	test, but	almost	never	do	 testing	with	other	 fleets .” Early	adopter	 fleets	are	 to	 be	commended	 for	 their	 testing
efforts

, as	they	are	generally thorough	in	their data	collection

. The V ice P resident of	Operations of	a medium

size d fleet shared	 what	 they	 see	 with	 these	 early	 adopter	 fleets : “Some	 fleets	 have	 robust	 testing methodologies	 and	 procedures	 in	 place	 with	 strong	 collection	 of	 data.	 	 They have	 specific	 fuel	 efficiency routes,	dedicated	 trucks	and	 trailers,	 test	drivers,	etc.	and	bring	 this	data	back	 to	investment	 teams	within the	 fleet	 for	decision	making.”		But,	 rarely	is	 this	data	shared	in	a	useable	manner	with	other	 fleets	or	 the
manufa cturers. Another	 important	 factor was	 shared	 with	 the	 team	 by	 a	 component	 supplier ’s	 Head Engineer	of	Engineering	for	On

- Highway	Products : “Fleets	who	gain	fuel	efficiency	at	times	will	keep the	data

‘ close	to	their	vest ’ for the	first	year	before sharing.		Then,	they	begin	to	share	in	order	to	help	get	more	scale
for	the	feature	and	the n hopefully,	commensurate	higher	quality	and	lower	cost.”

Other	 large	 fleets	 offered	 their	 perspectives	 on	 the	 need	 to	 collect	 data	 specific	 to	 their	 operations	 for emerging	technologies: 0% 20% 40% 60% 80% 100% EPA	SmartWay OEMs Manufacturer External	Test	Reports Other	Fleets @	Fleet	Event Third	Party	Org Own	Research

Very	Important

Important

Somewhat	Important

Not	very	Important

Not	ImportantBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 36 • “Almost	all	the	technologies	adapted	to	the	fleet	have	been	the	result	of	testing	by	the	manufacturer on	our	fleet	in	our	different	applications.”

- President	and	CEO

• “First	insure	that	the	component	supplier	or	OEM	has	run	their	o wn	SAE	type	test	and

, if	so

, then	ask for	 the	 data	 (‘devil	 in	 the	 details’).	 Then,	 if	 it	 looks	 viable

, we	 will	 discuss	 how	 it	 impacts	 drivers, maintenance,	weight,	and	reliability

. T hen	if	all	good	then	w e’ ll	test	them	to	validate, and	then make

a proposal to	our	leaders	to	purchase.	We	use	a	local	40

- 50	mile	SAE T ype	2	(#1321)	real

- world	road test	to	validate	results	with	our	own	specs	and	configurations.”	V ice P resident of	Purchasing

• “We	study	various	technologies	and	test	and	adopt	those	that	prove	they will	improve	fuel	efficiency. We	 require	 suppliers	 perform	 SAE	 testing	 before	 bringing	any	 technology	 to	 us	 to	evaluate.”	 (Vice
President

• “Suppliers	are	 proactive	in	 contacting	 us	with	 new	ideas	 due	 to	 our	 size	and	visibility.	We	learn	 of
new	ideas	at	con ferences	and	trade	shows.	We	have	a	person	with	title	of	MPG	Director	and	a	MPG committee	who	meet	twice	monthly.	W e’ ll	look	at	supplier	test	results	but	will	100%	test	ourselves any	new	technology	prior	to	implementation.	Our	testing	is	SAE T ype	2	and	SAE T ype	4	first

, then	if results	look	good

, w e’ ll	put	into o ur own	ROI	model	for	analysis	and	then	discuss	with	fuel	committee and	others	for	approval	and	funding.”

- Fleet	Fuel	Director

• On	 valuing	 suppliers ’ support	 with	 test	 results

, a	 President	 and	 CEO,	 s tated	 “Almost	 all	 the technologies	adapted	to	the	fleet	have	been	the	result	of	testing	by	the	manufacturer	on	our	fleet	in our	different	applications. ”

Other	stakeholders	commented	as	follows:

• “Not	so	much	that	fleets	think we are	trying	to	lie	or	over

- estimate	the	benefits	of	a	technology,	but
more	 in	 that we were	 not	 testing	 it	 in	 the	 same	 usage	 profile	 as	 the	 fleets	 operate	 in.”

- Product Manager	at	a t ruck	OEM

• “Fleets	that	have	good	relationships	with	OEMs	really	value	OEM data.	OEMs	would	want	that	[fleet]
data	too ; they	don’t	have	unlimited	resources	to	do	it	all	themselves

. ”

- Director,	On

- Highway	Vehicle Strategy, t ruck	OEM

• “We	 have	 a	 few	 dedicated	 engineers	 whose	 sole	 job	 is	 to	 evaluate	 and	 work	 with	 these
manufacturers .”

- Director,	Engineering	at	a	private/retail	fleet

• On	the	suppliers’	need	for	help	from	the	fleets : “We	conduct	our	own	tests	and	depend	on	fleets	to
assist.”

- Founder	and	CEO of	a New	Technology supplier

From	Figure	11,	t he	research	of	t hird

- party	organizations was	valued	just	after the	fleets	own	research,	but fleets	and	the	supply	chain	stated	that	no trust ed	option currently exists

. The	EPA	Smart Way	is	a	voluntary testing and	 certification program that	 provides	 free	 information	 to	 fleets, shippers,	 and	 other	 interested parties, but its	 value was generally rated quite low. However,	 a few	 interviewees	 did	 rate	 it as	 v ery important .		Those	 rating	it somewhat	or	not	i mportant shared	concerns	 that	 the	program	is	managed by	a regulatory	 entity	 of	 the f ederal	 government with	 a lack	 of	 indu stry	 input	 into	 its	 strategy and tactics

, and
there	are	limited resources for	doing sufficient	analysis	in	order	to	verify	technologies.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 37 The	vast number of	test	protocols	that	exist	thro ughout	the	industry	contributes	to	this	credible	information
dilemma

, as	 it	 is often challenging	 to	 compare	 the	 results. The Founder	 and	 CEO of	 a new	 technology provide r stated,	“Everyone	seems	 to	modify	 the	 test	protocols	as	 they	see	best.		Much	could	be	gained	by deciding	 on	 one	 or	 a	 few	 protocols	 and	 using	 it	 across	 the	 industry.	 	 Make	 it	 statistically	 important	 and encourage	 or	 demand	 its	 use.”	 	 Another important issue is	 that	 sometimes	 technologies	 are	 tested	 and implemented	in packages ,	making	it	difficult	to	know	which	one	is	actually	contributing	to	the	results	that	a given	fleet	may	be	experiencing.

Other	direct	comments	concerning	independent experience	and data included:

• “We	 value	 SAE T ype 2 vehicle, ‘ real	 world ’ testing	 results [given	 that	 the	 test	 matches this	 fleet’s application	and	unit	configuration ]. W e	give	this	type	of	testing	more	validity	than	OEM,	supplier	or
other	customer	testimonials. I	believe	in	Ronald	Reagan’s ‘ trust	but	verify ’ philosophy.	I	would	value
a	 true	 unbiased third

- party	 test	 as	 long	 as	 they	 can	 evaluate	 my	 like	 spec	 and	 configuration...and there’s	a	limit	to	how	much	one	party	can	do.”

- Vice	President,	Large	Fleet

• A	Genera l	Manager	at	a truck OEM	shared the	comprehensive	nature	of	their	validation efforts : “W e

use i nternal	and	external	 tests	with	customers	and	 third	parties	as	well	as test on	our	own	proving grounds

. ”

• “We	conduct	a	lot	of	bench	testing	to	have	confidence	i n	our	numbers	then	use	tools	to	predict	their performance	on	trucks	for	our	customers.		We	conduct	and	support	SAE	tests	by	fleets	and	OEMs.”

- Strategic	Business	Segment	Manager,	Components	Supplier

• “ [We]	n eed	 real	SAE	 type	 testing	 to	get [fleets’] attention

, but f leets	 say	 that	 they	 still	need	3	 sets
tested	over	6	months	to	evaluate. But	if	they	see	a	big	enough	MPG	early

, then	they	may	not	need	all
6	months.”

- Founder	and	CEO,	New	Technology	Supplier

• Another	 new	 technology	 supplier	 commented,	 “We tested	 our	 systems	 for	 durability	 and	 used extensive	early	fleet	trials	to	fine	tune	mounting,	etc.		One	trailer	OEM	completed	a	6	month	shaker test,	which	seemed	very	long,	but	after	it	was	successful,	it	helped	us	convince	 fleets	of	 the	robust design.”

- President

• “I	believe	that	industry	is	underutilizing	information	from o wner

- operator s using	their	own	truck	and trailer	to	test	and	report	fuel	savings	technologies.	Unlike	the	major	fleets	that	do	not	use	dedicated drivers	 (many	 have	 over	 100%	 turnover	 a nnually)	 on	 the	 same	 equipment

, o wner

- operator s or smaller	fleets	use	the	same	driver	on	the	same	truck	pulling	the	same	trailer....so	more	accurate	data can	 be	 obtained...plus,	 since	 they’re	 paying	 for	 their	 own	 fuel	 they	embrace	 these	 technologies.”

- President,	New	Technology	Supplier

• “Testing

– most	fleets	want	to	test	technologies	with	their	own	specs	and	operating	environment	but
we	are	 concerned	 sometime s they	are	 not	 doing	enough	 units	 for	a	 viable	 sample	 size.”

- General Manager	at	a t ruck	OEM

• “ T he	 d ecision	 to	 implement	 a	 technology	 always	 depends	 on	 your	 starting	 point.	 Examples

– t ire inflation	 system	 did	 not	 improve	 MPG	 much	 because	 we	 feel	 we	 already	 have	 a	 good	 tireBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 38 maintenance	program	and	drivers	are	educated	on	how	 to	check	air	pressure.”

– V ice P resident	of Purchasing at	a	large	fleet

• And	 finally,	a	 new	 technology	 supplier’s f ounder	and	 CEO	 described	 their	 third

- party	 test	 protocol, pointing	 out	 the	 value	 of	 involving o wner

- operator s ,	 “ We	 do	 scale	 model	 testing	 in	 wind	 tunnels
where	 we	 can	 rotate	 the tractor

- trailer to	 simulate	 angle	 of	 wind.	We	 use third

- party	 testing	 ( the

T ruck R esearch C enter	in	Ohio)	 for	SAE T ype	2	test	track	testing	of	prototypes	installed	on	rigs.	We

use o wner

- oper ator s for	 further	 real	 life	 validation	 because	 they	 drive	 more	 miles,	 have	 a	 1

- to

- 1

tractor

- trailer ratio	and	keep	better	records	than	random	fleet	drivers.”

In	 summary,	 verifying performance in	 the	 early	 stages	 of technology	 deployment is	 challenging

, duplicated testing efforts	by	multiple	fleets	and	manufacturers is	commonplace

, and	data is	not	often shared or	trusted by	outside	parties

. This often causes confusion	with fleets	that	are	interested	in	adopting	a	technology and delays	 manufacturers as	 they verify a new	 technology’s	 performance. Fleets	 seem	 to	 understand	 that it	 is difficult	to	stay	abreast	of all	the	technologies	being	developed	by	testing	themselves,	but they rarely have full confidence	in external	results

.

Credible	Information	S haring	(Later)

As	early	and	late	majority	use rs	adopt	a	 technology ,	personal	experience s ( via word

- of

- mouth) seem	 to	be the	 primary method	 for sharing	 of information	 about	 a	 technology’s	 fuel	 savings,	 reliability,	 maintenance impacts,	and	overall impressions

.

“If	we	can’t	understand	it, we	can’t	value	it.”

– an	owner

- operator

As discussed	in	the	previous	section ,	f rom	large	fleets	to	small o wner

- operator s ,	the	industry	overwhelmingly reported	that	they	rely	almost	exclusively on	their	own	experi ence	and	in	other	end	users ’ data when	making
a	decision to	adopt	new	fuel	efficiency	technologies.

Smaller	 fleets generally do	 not	 have	 the	 resources	 to	 investigate	 and	 test	 the	 new	 technologies	 in	 their operations

, and many fleets of	all	 types have	 decided	 to	 be	 followers	in	implementing	 these	 technologies. However,	 this	 does	 not	 at	 all	 imply	 that	 all	 innovators	 and	 early	 adopters are	 large	 fleets. One	 large	 fleet President	and	CEO, likely	a late	majority	or	laggard	adopter, stated

, “We	someti mes	wait	too	long.		We	must rely	 on	 other	 fleet’s	 data	 for	 us	 to	 move	 forward,	 but	 we	 are	 skeptical	 of	 their	 understanding	 of	 fuel efficiency.		They	may	know	maintenance	and	reliability	costs	well,	but	fuel	efficiency	is	hard	to	measure	and
that	data	can	b e	dubious.		We	do	use	data	from	large,	valid	carriers	that	we	trust.”

End	users	were	asked to	select the	primary	reason	they	did	not	adopt	available	technologies

, and Figure 11 shows	the	top	six	reasons.		T he	top	three	reasons	were : 1) inadequate product	support ( i.e. services	such	as new	 product	 traini ng	 and	 after

- sale	 support); 2) manufacture r s ’ data	 showed	 tech nology	 was not appropriate ; and 3) that	the	technologies	were not	relevant	to	their	operations

. Each	of	these	issues	are valid reasons,	assuming that credible	and	 sufficient	 data are	included in	 the	 decision	making	 process. T he	 nextBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 39 three reasons were : 1) there	was no	outside	validation ; 2) testing was	inadequate ; and 3) the data was	not convincing.	 These	 three	 reasons sug gest	 that	 the	 fleet	 believes	 in	 the	 technology	 but	 has	 inadequate information	 to	make	a	 decision	 to	 purchase	 or	 retrofit a	 technology on	 the ir	 trucks	and/or	 trailers.		These

responses indicate	that	many	fleets

– even	those	who	are	very	interested	in adopting	new	technologies

– do not	have	enough	information	in	their decision

- making processes.

Figure 11 .		Top	Reasons	N ot to Purchase

Uncertainty	concerning	the	technology	continues

, and	this	may	encourage	lack	of	appropriate	investment	in the	 firms	 offering	 the	 technologies ,	 which,	 in	 turn,	 results	 in	 delays	 in cost	 reduction s due	 to increasing production	and	economies	of	scale .		Another	large	issue	is	the	maintenance	of	both	sets	of technologies	by

m anufacturers and	 truck	 and	 trailer	 builders	 who	 need	 to maintain both	 in	 their	 product	 portfolio	 and engineering	and	manufacturing	plans.			Engineering	changes,	such as emissions	regulation	changes	and	new cab	 introductions,	 must	 accommod ate	 all	 offered	 features	 and	 when	 duplicate	 functionality	 technologies exist,	this	causes	additional	costs	in	the	system.

When	products	are	in later	stages of	development and	deployment ,	information	is typically shared	through
some	of	 the	 same ways as dis cussed	in	 the	previous	 section ,	but	 the	information	 shared is	generally more rooted	 in	 data	 from	 real

- world	 measurements of	 fuel	 efficiency	 improvements	 and	 other operating	 costs
such	as	maintenance and infrastructure	expense s , replacement costs ,	and resale	value

. From	the	responsesBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 40 from	various	stakeholders,	it	seems	that	there	is	diversity	of	opinion	for	the	best	ways	to	collect,	share,	and
learn	about	real

- world	data	and	experiences	with	technologies. A	number	of	interviewees	shared	that	there

are no	easy	tools	available	for	sharing or	learning	about	what	is	working	and	what	is	not

. Smaller fleets	and

owner

- operator s provide	insight	into	this	credible	information	issue ,	which	is	evident “later” in	a	technology’s adoption	 cycle

. According	 to	 the	 su rvey	 results	 that	are	 summarized	 in	 Figure	 12,	 owner

- operators highly
value truck	radio

, trucking	magazines,	internet	sites	and	truck	shows	and	other	fleets .		It	is	important	to	note
that the owner

- operator s ’	 results are	 somewhat	 biased	 toward	 truck	 radio	 as	 that	 was	 the	 study	 team’s
method for contacting	 the	 large	 majority of	 this	 stakeholder	 population.	 	 The	 surveys	 also	 showed	 that

o wner

- operator s do	not view the EPA ’s SmartWay Program or	the	fleets	they	are	contra cted	to	haul	freight
for	as	credible	sources for	information	about	new	technologies as	shown	in Figure 12

.

Figure 12 .		Owner

- Operator	Source s of	Information

Figure 13 shows o wner

- operator s ’ confidence	 in fuel

- saving technologies and	 shows that	 65%	 of respondents are	 either	 “Highly	 Confident”	 or	 “Confident” that	 there	 are	 technologies	 not	 currently	 being deployed	on	their	tractors	and/or	trailers	that	can	offer fuel	efficiency	improvement. From	the	online	survey
data and	interviews	with o wner

- operators at the Technology	and	Maintenance	Council	and	the	Mid	American
Truck	Show

, these	results suggest	that	when	they	understand	a	technology,	they	quickly	become	confident	in

it. O ne	 owner

- operator	 even	 stated,	 “That’s	 the	 problem;	 there	 are	 no credible	 independent	 reviewing organizations,	like	a	Consumer	Reports.” 

### 54%

21% 20% 3% 2% 1%

Truck	Radio

Magazines,	Internet,	Shows

Other	Truckers/Fleets

My	Own	Experience

EPA	SmartWay

Contracted	FleetsBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 41 Figure 13 .		Owner

- Operator	Confidence in	the	Benefits	of	Fuel

- Saving	Technologies

Given	 that	 the targeted	 set	 of	 respondents for	 this	 data	 collection	 was	 “lead	 users”	 in	 both	 the fleet	 and supply chain	interviews	and	the	owner

- operator	surveys,	this	analysis is	likely not fully represent ative	of the
fleets	and	owner

- operators	that	own	and operate	the approximate ly 1.8	million freight trucks in	the	United

States .		T o	more	fully und erstand this	barrier,	t he	study	team	reviewed	the	data	and	used	the	Mid	America
Truck	Show	to	conduct	various	ad ditional	interviews	with o wner

- operator s ,	m anufacturers	and	other s, such as	 associations	 repre senting	 the	 industry

. These	 discussions	 were	 valuable	 in	 understanding the issue of information	sharing	in	the long

- haul trucking sector.

Some quotes about information	sharing practices are	included	here :

• “We	 are	 not	 big	 on	 hearsay

, third

- party	 operator	 experience	 like	 from	 one	 of	 our	 own o wner

operator s , or	 a	 small	 user	 that	 doesn’t	 really	 do ex t ended testing	 or	 data	 analysis.	W e’ ll	 consider testing [results] from	a	large	valid	carrier	that	we	know	and	trust.”

- Vice	President, l arge f leet

• “ W e’ ll seek	information	from	other	large	fleets,	my	peers,	first.	Then	test	with	a	minimum	of	30	units

in our own	fleet.	Items	need	to	be	“driver	proof”	where	it	will	work	almost	always	regardless	of	driver engagement	 or	 not.	 Item	 must	 be	 robust	 and	 not	 break	 down,	 especially	 if	 it	 takes	 a	 unit	 out	 of

service.

- Vice	President, l arge f leet

• “Most	 all	 the	 technology manufactures	 will	 run	 tests	 in	 our	 fleets	 at	 various	 locations,	 usually	 6 months.	New	tractor,	trailer	dolly,	trailer	OEMs	will	also	pilot	the	equipment	in	our	 fleet.	Our	team evaluates	and	recommends	for	capital	purchase.”

- President	and	CEO of	a	large fleet 

### 31%

34% 20% 4% 12%

Highly	Confident

Confident,	with	quesuons

Neef	more	Informauon

Fuel	Surcharge	offset	Costs

No	ConfidenceBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 42 • The Director	 of	 Engineering at	 a	 private	 retail	 fleet said,	 “ We	 g ain	 awareness	 from	 other	 fleets, conferences,	 suppliers,	 etc.

, and	 if	 it	 makes	 sense	 then	 w e’ ll	 put	 it	 into our	 ‘ engineering	 pipeline ’ where	it	will	be	studied,	piloted

, measured

, evaluated

, and	then	implemented	if	viable.”

• “W e’ ll	consider	outside	data

, but	it’s ‘ buyer	beware ’ ;	source	must	have	the	technical	knowledge	and viable	test	data.	Other	fleets	seem	to	have	good	data	on	maintenance	costs	of	technologies

, but	the
fuel	efficie ncy	data	can	be	dubious...I	do	not	have	high	confidence	in	their	stated	results.		OEM	data	is ok	as	long	as	they’re	advertising	it....truth	in	advertising.”

- Fleet	Engineer at a p rivate r etail f leet

• “We	 look	 to	 partnerships	 with	 technology	 suppliers	 in	 adopti ng	 technology	 upgrades	 to	 our	 fleet. Testing	 is	 conducted	 and	 monitored	 by	 the	 supplier	 and	 decisions	 are	 made	 for	 utilization	 of	 the technology	in	the	entire	fleet.”

- Director	of	Transportation	Operations	and	Logistics at a p rivate r etail
f leet

• “A	consid erable	amount	of	company	time	is	spent	with	other	fleets	in	the s tate t rucking a ssociation and	 other	 groups	 where	 technologies	 are	 discussed	 and	 passed	 along.”

– V ice P resident of Operations, m edium f leet

• The Director of

, On

- Highway Vehicle	Strategy for	a truck	OEM	reported	that all	the	information	they tend	to	create	and	share	on	a	give	technology includes	data	from the “Lab,	dyno,	wind	tunnel, [their] own	test	fleet, and key	customers ’	test	results .”

• “Fleets	often	think	the	percentage	efficiency improvement	claimed	by	suppliers	via	their	dyno	tests and	 drive	 cycles	 are	 not	 realistic ,	 and they	 are	 skeptical	 of	 the	 data.	 Worse	 case	 is	 fleet	 gets	 no advantage	 when	 implementing	 the	 technology	 but	 usual	 case	 is	 something	 like ‘ they	 promised	 5%
and	I	 on ly	 got	 2% ,’ so	most	 fleets	 take	 the	 supplier	 stated	 results	 and	 cut	 them	 in	 half.	 Fleets	 put more	 credence	 in	 independent third

- party	 testing	 (if	 available),	 what	 other	 similar	 fleets	 (like Customer	 Councils)	 are	 saying	 and	 best	 of	 all	 their	 own	 internal	 t est	 results.	 Fleets	 look	 at	 big supplier s	 as	 pretty	 reputable	 and	 good	 ‘advisors’ to	 their	 business.	 	 They	 see	 these	 suppliers	 as

p artners	in	their	drive	for	better	freight	efficiency

.... Education	is	the	key	to	running	a	fleet	profitably.
Some	 fleets	 will	 f igure	 fuel	 efficiency	 on	 their	 own,	 the	majority	 will	 use	 information	 and	 supplier data	 to	 help	 them

, and	 some	 will	 not	 ‘get	 it’	 via	 t heir	 poor	 fuel	 efficiency	 and	 will	 go	 broke

. ”

- Director,	Vehicle	Technologies	at	a n established c omponent s upplier

• A	Head	Engineer	 for On

- Highway Products at	a	truck	OEM revealed,	“We	primarily	 focus	on	the	big fleets	that	buy	the	most	trucks	but	need	to	do	a	better	job	of	reaching	out	the o wner

- operator s and small	fleets	who	make	up	the	other	20%	of	the [sales] market .”

As	previously	discussed, responses	from	all	of	the	stakeholder	groups evidence	the strong	desire	of	fleets	to generate	 test	 results	 based	 on	 their	 own	 equipment,	 duty	 cycles,	 and	 business	 operations .	 A	 large	 fleet ’s
Fleet	 Fuel	 Director stated,	 “We	 look at	 suppliers	 test	 results,	 but	 will	 100%	 test	 ourselves	 on	 any	 new technology	 prior	 to	 implementation.”	 	 As	 the	 team	 analyzed	 the	 interview	 data,	 it	 became clear that technology	 testing	 and	 validation is	 performed	 many	 times	 by	 multiple	 entities ,	 often	 wi thout	 much collaboration,	as	both	suppliers	and	end	users	generally	value	self

- generated	data	other	any	other	external
source.	 The General	 Manager of	 a	 truck	 OEM said

, “Fleets	 know	 the	 ‘real	 world’ of	 freight	 movement, suppliers	 rely	mostly	 on	 in

- house	 controlled	 testing

, and	 the	OEMs	 are	 in	 the	middle	 trying	 to	make	 it	 allBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 43 come	 together.	 	There	 has	 to	 be	an	easier	way.” The Director	 of	On

- Highway	 Vehicle	Strategy at	another
truck	OEM commented	 on their	 responsibility	 to	ensure	appropriate	application	 of	 technologies by	 stating
that ,	 “the	 commercial	 truck	 industry	 needs	 time	 to	evaluate,	 test,	 design,	 produce,	 train	and	 launch	 these technologies.”

In	summary, data	and	anecdotal	evidence	from trus ted	sources	is	the	primary way	that the	late majority	and laggard fleets gain	 confidence	 that fuel

- saving technologies will	 work	 well in	 their	 operations.	 	 By	 t heir

conversation nature,	these	organizations are	avoiding	the	change	to	new	technologies

, and i nformation must be presented to	 them	 via	 different	 means than	 innovator	 and	 early	 adopter	 fleets,	 which	 are	 more	 apt	 to proactively	 seek	 out	 information	 and	 test	 technologies	 for	 themselves

. As	 technologies	 mature	 and	 reach higher	 levels	 of	 penetration, information	 from component	 m anufacturers,	 truck	 and	 trailer	 OEMs, industry

a ssocia tions,	and various	media	outlets	(radio,	internet) seem	to	have	a	larger	influence	on	purchase	decisions than	when	the	technology	is	at	early	stages	of	development	and	deploy ment.

Inconsistent Reliability

The	 reliability	 of	 new	 technologies	 is often inconsistent

, and	 that	 inconsistency	 is	 further exacerbated by suppliers	and	tractor	and	trailer	OEMs	not	sufficiently	testing	before	launch.

“Will	fuel	economy	features	be	as	unreliable	as	emission	ones	(EGR	components,
d i esel p articulate f ilters,	etc.) ? ”

– from the focus	group	with	t ruck d ealer s

Reliability	of	new	trucks and	trailers is	paramount	to	 fleets.		Consumer	expectations	and	the	ov erall	 freight distribution	system	in	North	America	depend	on highly reliable equipment

. Equipment must be	available	to

p erform	every	day and	with	little

- to

- no	downtime .			Given	the	slim	margins	of	the	trucking	sector,	any	new technology	has	little	room	for	error	with	respect	to	uptime	of	the	vehicle. Multiple	respondents	stated	t his expectation that	new	technology	should	not	impact	reliability.	As	shown	in	Figure	7, re liability	is	the	number one	 influencer	 for	 new	 truck	 specifications.	 	In	 fact,	as	 the	 truckin g	 industry	 has	 been	 improving	 the	 basic quality	of	 the	equipment	 for	over	15	years,	 the	 fleets	expect	 that	any	new	 truck	must	perform	better	 than the	one	it	is	rep lacing	in	their	fleet	(NACFE	201 3 ).

Each	 of	 the	 stakeholder	 groups	 mentioned	 reliability	 as	 a	 significant concern	 with	 emerging	 fuel

- saving technologies

.

• A	 Marketing	 Segment	 Manager at	 a	 truck	 OEM shared	 that “We do	 full	 truck	 durability	 tests,	 full truck	shaker	tests,	cab	shaker	tests,	reliability	growth	testing	as	well	as	component	testing.”

• A	Senior	Manager of Supply	Management at	a	 rental	 fleet stat ed	 that	“ W e have	extensive	analytic capabilities	with	respect	 to	 the	reliability	of	components	on	eq uipment	 from	 the	 tractor	and	 trailer builders.	 They	 are	 trying	 to	 improve	 this	 capability	 with	 respect	 to fuel

- efficient components. We recently	 updated	 the	 engine	 parameter	 configurations	 on our base	 spec	 to	 be	more fuel

- efficient

.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 44 ‘ Why not? ’ These	parameters	do	not	affect	reliability	and	cost	the	same. We have	also	recently	begun offering	a ‘ max	 fuel	economy	 package ’ for	 customers	asking	 for	a	mo re	 fuel

- efficient	 configuration
for	their	leased	trucks.”

• A	 Founder	 and	 CEO	 of	 a n ew	 technology	 su pplier	 voiced	 their	 commitme nt	 to	 provide	 reliable products : “W e	use f leets	and third

- party organizations	to do	testing	for	durability	and	performance .”

• Another	 V ice P resident of	 Purchasing at	 a	 large	 fleet stated,	 “We	 once	 looked at very	 long	 cab extenders	but	before	we	tested	it	was	obvious	the	reliability	would	be	low	and	maintenance	too	high.

We	a lso	believe	that	13	liter	engines	won’t	be	as	long	term	durable	as	15	liter	engines

, so we are	not interested	in	making	this	switch	to	wh at	could	be	more	fuel	efficient	engines.”

The	truck	dealers	shared	that	“ Q uality	and	reliability	issues	with	2002	EGR	and	2007	diesel	particulate filter
trucks	 were	 some	 of	 the	 worst we have	ever	 seen.”	 	 The	 dealers also shared	 that	 “ Rapid	 change	 is	 kill ing
fleets	and	OEMs .		They	[the	truck	and	trailer	OEMs ]	are	having	difficulty	keeping	up.		New	emissions	rules	and associated	equipment	every	 three	years	has	been	very	difficult for	 the	OEMs	 to support.”		A	private	 fleet ’s Director	 of	 Engineering said,	 “Wi th	 respect	 to	 fuel	 efficiency,	 it	 is	 important,	 but	 basic	 engine	 reliability	 is much	more	crucial	to	us	than	improved	fuel	efficiency,	as	we	demand	uptime	and	low	cost	of	operation

. ”

Interviewees	shared	that	there	seems	to	be	more	issues	with	e arly generation	pro duct	pro blems than	in past

years .	 	 The	 dealers	 stated that ,	 “Many	 of	 the	 products	 released	 to	 early	 adopter	 fleets	 before	 they	 are
validated are creating	poor	performance	and	a	bad	 reputation for the	new	 technology.		Tractor	and	 trailer

OEMs should	 better	 help	weed	 out	 the	 good	 from	 the	 bad	 products	and	 suppliers.”	 	Most	 of	 the industry leaders	interviewed	discussed	 this	challenge	with	 the	study	 team.		Field	demonstrations	are	critical	 to	new product	development	and	validation,	but	it	seemed	t hat	over	the	past	decade	too	many	problems	with	first generation	products	are	creating	a	significant	lack	of	confidence	in trucking	innovations.		Finally, dealers	also
stated	that ,	“ A s	 there	simply	have	been	 too	many	issues,	dealers	and	 fleets	no	longer	wa nt	 to	be	 field	 test partners”,	slowing	the	data	accumulation that	is so	important	for spurring	adoption

.

In	 some	 cases, a	 large	 number	 of suppliers emerge to	 try to	 take	 advantage	 of	 the	 opportunity	 that	 the innovation	offers.		The	dealers,	a	few	fleets

, an	OEM

, and	even	some	suppliers	noted	that	in these cases	this caused	additional	issues	for	adoption. The President of	a new	technology	supplier mentioned,	“At	one	point,
there	were about	20 manufacturers	of	both	diesel a uxiliary p ower u nits	(APU s ) and	trailer	side	skirts ; now	the industry	is	coalescing	around	three and	 five .”		A	large	of	amount	of	suppliers that	are all	trying	to	promote similar	technologies can sometimes cause	confusion with	fleets

. That	same technology supplier shared	that
there seems	 to	 be	an	 “industry

- wide	 issue	 of	 first

- to

- market	 technology	 provider’s	 products	 not	 delivering results	as	expected

, and	problems	like	this	make	users	skeptical	of	that	particular	type	of	features	and of new prod ucts	 in	 general.”	 	 The	 industry	 is	 alr eady risk	 averse, and pro long ed adoption	 cycles	 will	 continue if purchasers are given a reason	to	doubt	a	new	technology

.

In	 summary,	high	 reliability	is	a	crucial	determining	 factor	 for	an	end	user	 to	purchase	a	 technology.		Early adopter	 fleets	 understand	 that	 they	will	 be	 part	 of	 the	 final	validation,	 but	 too	many	 problems	with	 recentBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 45 new	 product	 launches	 ha ve introduced a dditional	 elements	 of concern	 and	 skepticism,	 likely	 delaying	 or eliminating	demonstration	projects	and	adoption	decisions.

Lack	of Technology	A vail ability

Responses	from	various	stakeholders	suggest	that	a technology’s	a vailability as	an	option	or	standard	feature

at multiple	 truck	 or	 trailers OEMs generally takes	 years	 and	 nearly	 a	 decade	 for	 full	 availability across	 all

OEMs.

“To	get	the	technology	we	had	to	buy	from	a	different	truck	brand,	which	caused many	other	problems	and costs,	until	it	was	available	from	our	preferred	OEM ”

– A Senior	Fleet	Manager	at	a p rivate r etail f leet

During	the	course	of	this	project,	the	study	team identified a	barrier	that	has	not	been	discussed	much in the previous research in this area

. A truck	OEM ’s	 Director	 of On

- Highway Vehicle	 Strategy said,	 “The	 pace	 of technology	 change	 is	much	 faster	 than	 the	 truck	OEM’s [our] ability	 to	 implement.	 	It’s	 still	 a	 low	 volume industry	 with	 high	 specialization	 and	 a	 slower	 development	 cycle.” A lso

, from a truck OEM ’s General Manager ,	“There	is	an	intense	internal	review	process	including	our	own	return	on	investment	calculations. In	order	for	a	technology	to	reach large

- scale	levels	of	adoption ,	it	must	become	a	feature that	is offered	by

most ,	if	not all of	the	tractor	or	trailer	OEMs. ”

A	 trailer	 OEM ’s Vice	 President and	 General	 Sales	 Manager described	 the	 “li fe”	 of	 an	 emerging trailer technology	 by	 stating	 that,	 “Technologies are	 adopted	 in	 phases : retrofitted	 at	 the	 fleet,	 assembled	 by upfitters	du ring p re

- d elivery i nspection,	added	at	the	trailer	manufacturer,	first	on	a	per	order	basis

, and	later as	a	regular	production	offering

, and	then	ultimately	as	a	standard	feature.”		He	shared	a	real	world	example
of tire	pressure	inflation	systems	f or	trai lers. Currently

, at	this	manufacturer, the	axles	are	prepped	for	the
trailer	manufacture r s	with	holes	“drilled	and	 tapped”	 for	easier	assembly.		All	axles	meant	 for refrigerated trailers	are	“tire	inflation	prepped .”

The	study	team created	Figure 14 below

, derived	from information	provided	by	various	sta keholders	during
the	interview s.		It	sh ows	the	various	stages	that	a	typical	technology may	move through as	it	becomes	more widely	used

. Some	 technologies,	such	as	 trailer	aerodynamic	additions	will begin	life	as	retrofits	at	a	 fleet

, and	if	successful	the	fleet	will	work	with	an	OEM	to	get	the	device	installed	on	their	new	equipment	orders. Fleets	stated	that	many	times	they	will	add	the	devices	on	new	equipment	before	they	put	it	into	service	and

t hen	OEMs	might	have	their	dealers	or	other	“upfitters”	install	them	after	they	manufacture	the	equipment
and	before	it	is	delivered	to	the	customer. Depending	on	the	complexity	of	the	technology,	the	first	step	in availability	may	 be	when	 the	 first	OEM	 of fers	it	as	a	 customer	 specific	 per

- order	item. There	is	a	 standard practice	 within	 the	 tractor	 and	 trailer	 OEMs	 to	 engineer	 a	 particular	 feature	 solely	 for	 one	 customer,
sometimes	called	order or	special engineering.		The	feature	is	designed	and	integrated by	the	company	only for	 that	 particular	 customer’s	 needs	and	 not	 for	 their	entire	 product	line	 specifications	 until	 such	 time	 theBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 46 OEM	 believes	 there	 will	 be	 high	 enough	 demand	 to	 justify	 the	 engineering.	 	 If	 a	 technology	 is	 gaining adoption	and	interest, more	 suppliers	emerge	and	begin	developing	and	 supplying the same	or alternative products	to	meet	the	functionality	of	the	feature.		As	the technology	is	offered	by	more	OEMs ,	later	adopting
fleets	of	all	 sizes and	OEM

- allegiances	can	decide	 to purchase	 th e technologies .		With	 the	 release	of	 these new	 products	 by	 the	 OEMs,	 their	 dealers	 are	 trained	 and	 begin	 to	 promote	 the	 features	 to	 the	 larger industry,	driving	scale	and	lowering	costs.		Eventually,	most	if	not	all	of	the	OEMs	offer	the	device	as	standard in	 their	 product	 configurations	 and	 the	 laggards and	 non

- adopters become	 users by	 default	 when	 they purchase	new	equipment

.

Figure 14 .	Example Life	of	a	Technology	over an Adoption	Cycle

As	 the	 private	 fleet	 shared	 above

, they believe	 that	 they made	 a	mistake	 when	 they	 decided	 to	 purchase their	trucks	from	a	different	OEM	to	get	a particular	new technology they	highly	valued .		Availability	of	their desired	 features	was	not	accessible	 from	 their	preferred	supplier. Many fleets	and OEMs stated	 tha t	 their strategy	 around	 these	 technologies	 is to	 be “ fast	 followers ”,	 meaning	 that	 as	 others	 take	 the	 lead	 in integrating	the	featu res	into	their	products,	they	will follow	quickly.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 47 In	analyzing	the	interview	data	and	survey	responses,	a few other	issue s emerged regarding	OEM’s	decision

making	process	on	product	offerings :

• Improvements	to second	and	third	generation products are	not	developed	fast	enough	to	correct	the issues	with	the	first	generation.		A	few	suppliers	mentioned	that	the	industry	did not	seem	to	support their	product	improvement	efforts	because	the first	products	did	not	perform	well	enough.

• Some interviewees mentione d	 a	 “not	 invented	 here”	 issue	 within the	 industry.	 	 New technology companies	or	startups and	their	products are often no t	taken	seriously

.

• OEMs	and	manufacturers	want	assurances	of	 future	sales	before integrating technologies	into their product	plans ;	however,	 these	companies recogniz e that sales	estimates	 for	new	products are	very difficult if	not	impossible to accurately predict.

The	truck	OEMs	had	some high	level views	to	share	about	early	adoption	and	maturing	technologies.

• “Early	adopters	expect	issues	with	dealers	as	they	know	that	they	are	ahead	of	the	curve.		But	as	the technology	 matures	 and	 scale	 is	 achieved

, [a dealer’s	 knowledge	 of	 technologies] becomes	 more important	and	later	on	with	the	laggards

, a	must.”

- General	Manager

• A	Product	Manager of	a	truck	OEM shared,	“Most	new	technologies	are	pulled	through	by	innovative fleets.	 	 They	 know	 their	 business	 well and	 try	 to	 be	 innovative.	 	 That	 is

, customers	 ask	 us	 for	 it. Occasionally	we	push	new	 technologies	and	groupings.		One	model [year] was	a	push

– drive train

, engine	 programming

, and a feature	 grouping	 such	 as	 automated	 manual,	 etc.	 	 But	 generally

customer s	ask	 for	it	in	a	‘Customer	Adaptation’	by	submitting	a	 feature	request.		We	receive	it	and approve	 for	 their	 particular	 order.	 	 We	 then	 monitor	 requests	 and	 issue	 a	 ‘Product	 Modification Request’	or	include	the	more	popular	features	into m ajor p rograms.”

In	summary,	there	are	multiple	redundancies	in	design,	development,	demonstration,	validation,	field	testing, etc.	with	lack	of	good	information	sharing	contributing	to	a	very	long	availability	timetable.

Additional	Findings

In	 addition	 to	 the five barriers	 discussed	 above, the	 study	 team	 derived	 some	 additional	 findings	 that	 are addressed	 in	 the	 following	 section. These	 include	 specific	 technologies,	 driver	 retention,	 perspectives	 on regulations,	the	rebound	effect	and owner

- operators’ data.

Spec ific	Technologies

As	stated	earlier,	this	study	focused	on	the	barriers	to	technology	adoption	rather	than	any	significant	work concerning	the	specific	technologies	themselves.		The	team	did	however	ask	the	s takeholder	groups	and	theBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 48 o wner

- operator s which	technologies	had	the	most	short	term	potential	for	lowering	the	fleets’ fuel	expense
with Figure 15 show ing those results .	 	The	 interviewers	and	 the	 online	 survey	asked	 the	 question,	 “Which technologies	have	the	most	potential	in	the	short	term?”		T ractor	aerodynamics,	such	as	fuel	tank	skirts,	cab extenders,	 aerodynamic	 mirrors	 and	 bumpers,	 scored	 the	 highest	 with	 respect	 to	 potential.	 	 Low	 rolling resistance	 tires	 and	 tires	 were	 valued	 next.	 	 Idle	 reduction	 is	 a	 broad	 category

, which	 includes	 such technologies	 as	 auxiliary	 power	 units,	 idle	 shut	 down	 engine	 parameters

, and	 truck	 stop	 electrification. Automated	manual	 transmissions,	6x2	axles

, and	direct	drive	 transmissions	all	show	 reasonable	promise	as identified	 by	 these	 stakeholders. The	 techno logy	 area	 in	 which	 the	 surveyed	 participants	 had	 the	 least
amount	 of	 confidence	wa s trailer	aerodynamics, which	 includes such	 features	as	 side	 skirts,	 boat	 tails	and under	trays.

Figure 15

. Technologies	with Short	Term Potential

Driver	Retention

There	 is much	 discussion	 concerning	 driver	 attraction	 and	 retention	 in	 the	 trucking	 press	 and	 at	 industry conferences	with	respect	to	driver	shortage s and	the	challenge	of	high	turnover at fleets.		Figures 1 6 and 1 7
show	driver	retention	data	 for f or

- hire and p rivate trucking	 f leets ( ACT	Research 2013)

. In	 the	 figures data for	2005	to	2012	from	the	American	Trucking	Association	(ATA)	and	the	National	Private	Truck	Council	(NPTC)
for	the	turnover	of	drivers	in f or

- hire and p rivate c arriers,	respectively, w hich	are plotted	using an identical scale	for	annual	driver	turnover	on	the	y

- axis

. The	stark	contrast demonstrates	the	vast	differences	between 

### 0% 20% 40% 60% 80% 100% Trailer	aero Direct	Drive	Trans 6x2	Axles Automated	Manual	Trans Idle	reducuon Telemaucs Low	rolling	resistance	ures Tractor	aero

High

Medium

SomeBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 49 driver	 retention	 in	 these two fleet types .	 	 Private	 fleet	 drivers	 are	 company	 employees	 of	 firms	 such	 a s Pepsi Co,	 UPS	 and Wal

- Mart

. I n	 their a nnual f leet b enchmarking	 work ,	 the	 NPTC states	 that private	 fleet drivers	 are	 paid	 substantially	 better	 and	 receive	 superior	 training	 and	 benefits	 packages	 to	 their for

- hire
counterparts and	that	p rivate f leets	tend	to	hire	drivers	after	they	have been	trained	by	and	driven	 for	the
f or

- hire	firms	for	about	five	years (NPTC	2011)

.

Figure 16

. ATA:	For

- hire	Truckload	Carrier	Driver	TurnoverBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 50 Figure 1 7

. NPTC	Benchmark	Survey:	Private	Fleet	Driver Turnover

With	respect	to	barriers	to	increased	adoption	of	fuel	efficiency	technologies, the	interviewees	indicated	that driver	retention	impacts	the	choices	fleets	make	concerning	which features to	pursue. For

- hire fleets	tend	to favor	technologies	that	require	little	to no driver	intervention,	while p rivate f leets	likely	more	often	engage
the	 driver	in	 the technology	 choices .		For	example, a	Vice	 President	 of one l arge for

- hire	 fleet shared	 that they	 are	 retrofitti ng	 most	 of	 their	 trailers	 with a utomatic t ire i nflation s ystems	 to	 ensure	 the proper tire pressure	without	relying	on	the	drivers	to	manually	check	them	and	take	action. For

- hire	fleets	generally	do not	have	 the	ability	 to	manage	 their	drivers	as	closely as private	 fleets.	An	additional major	reason	 for

- hire fleets	are	 different	 than	 private	 fleets	in	 the	 type	 of	 technologies	 they	adopt	and	why for

- hire	 fleets favor passive technologies	is	that	they	simply	don’t	see	their	equipment	as	often	for	maintenance	purposes	at	their

own facilities as do private	fleets



### . Another	example	was	described	earlier	in	the	section on	lack	of	access	to capital as for

- hire fleets	are	specifying driver	amenities	such	as	electric	HVAC,	larger	sleeper	cabs	and	better riding cabs	and seats	in	order	to	reduce	driver	turnover.		The	cost	of	purchasing	of	these devices	can compete with	the	available	capital	for	buying	fuel

- saving technology	options.

According	to	many	of	the	fleet	interviews,	there	is	a	drastic	lifestyle	difference	between	for

- hire	and	private fleet	drivers.	A	private	 fleet	driver	 typically	has	a	 regular	schedule	and	can	be	home	every	night,	while	 for

-Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 51 hire	drivers	often	spend	a	large	m ajority	of	working	nights	sleeping	in	the	tractor.	This	is	a	significant	factor	in why	 driver	 turnover	 is	 so	 much	 lower	 for	 private	 fleets.	 For

- hire	 companies	 are	 constantly	 competing	 for drivers	and	must	purchase	new	equipment	and driver	amenity features on	a	regular	basis or	risk	losing	good drivers	to	other	companies	with	newer	equipment.

Split I ncentive

In	prior	studies,	 the	issue	of	a	split	incentive ,	also	called	a p rincipal

- a gent problem, for	 fuel	savings	devices has	been	proposed. In	one manifestation	of	the	principal

- agent	problem	in	the	trucking	industry	context

, the entity buying	the technology is not the	same	entity	that	must	pay for	the	fuel ,	and	therefore,	the	former will tend	to	avoid	purchasing	the	fuel

- saving technology due	to	the fact	that	they	will bear the	upfront	cost,	but not	experience	the	associated	savings. Vernon	et	al.	(2012)	studied	this issue and	suggested	that	the	market structure	of	the	trucking	industry	contributes	to	split	incentives	because	entities	responsible	fo r	investments

in equipment do	not	always	pay	fuel	costs

, and	drivers	are	not always rewarded	for	fuel

- efficient	operation. This	study goes	on	 to	state	 that	approximately	23%	of	 trailers	are subject to	an	“efficiency	problem”	when
owners	of	rented	trailers do	not	pay	fuel	costs.		That	study	suggested	that p rinciple

- a gent	problems	have	the potential	to	significantly discourage investments in	fuel

- saving	technologies	and	can	also	result	in insufficient
maintenance	and inefficient practices.

After	analysis	of	the	input	from	all	end	user	stakeholders,	the	team	found	somewhat	conflicting	perspectives with	 regard	 to	split	incentives.		Two very	similar large	 fleets	who	 tend	 to	have	high	 trailer

- to

- tractor	 ratios actually	shared	opposing	opinions	o n	the	topic	with	respect	to	investments	in	trailer	fuel

- saving	technologies.

A Fleet	Fuel	Director for	one	 fleet shared specifically	 that,	“We	 found	a	 trailer	aero	device	 to	save	3%,	but decided	not	to	pursue	it,	as	we	have	a	high	amount	of	independent	co ntractors,	who	buy	their	own	fuel,	pull our	trailers	and	we	will	not	see	the	savings.”		But	another	fleet executive,	a	Vice	President, overseeing a	fleet
with basically an identical	 business	 model	 and	 truck	 duty	 cycle	 shared that, “we	 no	 longer	 take	 that	 i nto consideration.	 	 Most of our	 independent	 contractors	 buy	 fuel	 off	 our	 national	 contract	 and	 if	 they	 are healthier,	in	terms	of	profitability	in	their	business,	we	will	be	as	well.”

Another	 split	 incentive phenomenon is	 that of fuel	 surcharges, increa ses	 in	 the	 rates	 shippers	 pay carriers when	fuel	costs	are	higher	than	a	set	amount

, was	investigated.		Again,	fleets	shared	differing

, if	not	opposite

views. A	President	and	CEO	of	a	large	fleet	stated	that, "We	charge	a	fuel	surcharge	of	28.5%	on	almost all

on

- highway	deliveries.	This	is	a	strong	barrier	to	adopting	an	influence	on	corporate	initiatives	towa rds	fuel

saving	 technologies." However,	 the	 Vice	 President	 of	 Operation	 of a	 medium

- sized said, "We	 pay	 the contractors	fuel	use	tax	along	with	our	f leet,	and	it	is	based	on	MPG	usage	of	fuel,	so	it	benefits	us	to	have
the owner

- operator meet	the	best	fuel	efficiency.”Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 52 Perspectives	on	Regulations

As	mentioned	earlier,	the	study	was	 focused	on identifying	the barriers	to technology adoption, and during
the	course	of	 the	interview s with	 stakeholders

, the	 topic	of	government	 regulations of	pollutant emissions and	fuel	efficiency and	GHGs emerged.		Many	end	users	and	some	of	the	supply	chain companies	discussed existing regulations and regulations	in development	and	how	these	policy	measures	are	affecting	technology adoption .		They referenced the	EPA’s engine emission	standards,	the	California	Air	Resources	Board’s	Tractor

Trailer	GHG	Rule	and	the	EPA and NHTSA ’s fuel efficiency	and	GHG	regulation. I t	is	difficult	to	summarize	the high	diversity	of	comments,	but	the	respondents	shared	that	regulation	can	help accelerate the	adoption	of technologies,	but	it	is	very	challenging	to	put	in	place	rules	that	truly	deliver	the	reduction	of	emissions	and
fuel use	 with	 an	 acceptable	 economic	 equation	 and	 to	 avoid	 unintended	 consequences	 in	 particular

vocations. Also,	many	of	the	respondents	were	aware	of,	but	not	experts o n	these	regulations.

Specific	comments	shared	with	the	study	team	follow.

• The President	and	CEO	at	a	Large	Fleet	 said	“All	of	our	new	equipment	is	 specified	with	compliant technologies	 for	 the	 CARB	 rules	 in	 California.	 	 The	 new	 trucks	 operate	 there	 and	 we	 move	 older equipment	to	other	states.”

• “Weight,	particularly	driven	by	the	ad dition	of	emissions	equipment	coming	with	the	EPA	compliance is	becoming	an	issue.		This	can	be	1,200	pounds	and	another	1,000	with	a	diesel a uxiliary p ower u nit. This	can	mean	less	payload	and	more	trucks.”

– V ice P resident	of Purchasing,	a l arge f leet

• The	 President	 and CEO	 of	 a	 Used	 Truck	 Fleet	 stated

, “ T he	 hours	 of	 service	 rules	 and	 emission regulations	is	a	stopper	to	adopting	technologies	to	save	fuel.”

• The Director	of	Operations	and	Maintenance of	a	used	truck	fleet shared	that	they	may	no	longer	be able	 to	operate	 their	older	equipment.		“We	like	 to	 run	 these	 trucks	up	 to	 14	years	old,	but	 today CARB	compliance	is	a	major	criteria	for	usefulness	of	equipment.”

• “We	had	to	reduce	the	cycle	life	of	the	power	equipment [i.e.	tractor	trucks] in	order	to comply	with

CARB	on

- highway	rules.		The	older	equipment	is	moved	to	other	states.”

- Director of Transportation Operations	at	a p rivate retail	f leet

• The Director of On

- Highway Vehicle	 Strategy	 at	 a t ruck	OEM	 shared	 a	 conundrum	 with	 respect	 to keeping	older trucks	longer : “Longer	trade	cycles	are	now	required	to	amortize	the	more	expensive
EPA	mandates.” He went	on	to	state	that

, “There	is	much	focus	on	GHG	requirements	and	fleets	are concerned	that	they	will	be	priced	out	of	the	market	and	unable	to	mainta in	any	profit	margins.”

• The Manager	of	Advanced	Engineering at	another	 truck	OEM	echoed	 this	 sentiment: “Government regulations	are	accelerating	quicker	than	the	industry	[we]	can	absorb.”

• “It	depends...Regulations	could	be	a	threat	or	an	opportunity	depending	on	how	it	is	constructed.”

- Market	Segment	Manager of	a	truck	OEM

• A	Product	Manager of	a	truck	OEM state d, “[GHG regulations ]	won’t	change [the	fact] that	the	fleet
needs	 to	 understand his	 operation

, and	 suppliers	must	 help	 him	 get	 the	 right	 technologies	 for	 his specific	needs.”Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 53 • “CARB	 regulations	 have	 driven	 a	 significant	 adoption	 in	 wings	 [aero	 devices]”

– V ice P resident	 of Engineering	at	a t railer	OEM

• The President of	 a	 new	 technology supplier stated

, “Regulations	 might	 be	 the	 only	 path	 to	 real adoption

– a	‘Paradigm	Breaker’.”

• “Many	[end	users	and	OEMs]	are	vested	in	the	old	school	and	if	they	have	to	do	it,	the y will		do	the least	necessary.”

- Founder	and	CEO	of	a n ew t echnology s upplier

R ebound	E ffect

As	 part	 of	 the interviews,	 the end	 user	 fleets	 and	 the	 supply	 chain were	 asked	 about	 the	 phenomenon
referred	to	as	the	rebound	e ffect. In	a	whit epaper	completed by	the	American	Council for	an	Energy

- Efficient Economy in	August 2012, titled The	Rebound	Effect:	Large	or	Small?	By	Steven	Nadel

, the	rebound	effect	is
described	as	“ a	postulate	that	people	increase	their	use	of	products	and	facilities	as	a	result	of	this	reduction in	operating	costs,	thereby	reducing	the	energy	saving s	achieved.”		Specific	to	passenger	vehicles,	they	stated
that

, “More	 efficient	 vehicles	 cost	 less	 per	 mile	 for	 fuel,	 which	 can	 spur	 some	 car	 owners	 to	 drive	 longer distances	or	buy	a	larger	or	second	car.”

In	 a paper	 by	 Winebrake	 et	 al

. (2012)	 “Estimatin g	 the	 direct	 rebound	 effect	 for on

- road	 freight transportation”,	the	authors	reported	a	likely	r ebound	effect of 4

– 24%, which	is	a	large	range based	on the analytical timeframe and econom ic	 factors

. They	 studied	 such factors as energy	 prices,	 energy	 efficiency
data ,	demand	for	trucking,	and	demand	for	energy.	Here	they	find	that	the	LDV	literature	usually	identifies	a
rebound	effect	of	5

- 20%	in	the	short	run	and	10

- 30%	in	the	long	run,	translating	to	a	.05	to	.3%	increase	in
vehi cle	 travel	 for	every	 1%	increase	in	 fuel	efficiency.		This	article	 recommends	measuring	 the	 relationship between	trucking	services	demanded	and	the	energy	price	of	trucking.

If	this	is	true,	one	would	expect	that	as	fuel	efficiency	increases	dramatically for	the	overall	trucking fleet, the demand	for	trucking	services	will	increase	as	well

. To	try	to	investigate whether this	phenomenon is	present at	the	individual	 fleet	level,	the	team asked the	 fleets about the	potential	and	size	of	the	rebound	effect in their	own	 trucking	operations .		Trucks	are	used	as	 tools	in	business	 for	 transporting	goods

, and	 the	cost	of goods	 movement is	 a	 direct	 cost that	 is	 passed	 on	 to consumers.	 	 The	 movement	 of	 goods	 is	 highly
scrutinized	for	cost

, and	the	study	team	recogniz ed	the	high	attention	to	cost	when developing a	question	to
better understand	the	potential	of	a	rebound	effect.		The	hypothesis	for	a	rebound	effect was that trucking
fleet s would	be	less	demanding	concerning operational	factors such	as	out

- of

- route miles,	speed	limiting,	less focus	on	back	hauls,	etc.	if	the	efficiency	of	their	vehicles	were	drastically	improved.

The	question was	framed	in	the	following	way: “ If	your	fleet were to	achieve	a	signifi cant	fuel	savings,	say	1.0

MPG or	 about a 15% improv ement ,	 what	 would	 you	 do	 differently	 in	 your	 operations?”	 	Nearly	 all	 of	 the interviewees	struggled	to	answer this	question

. A few of	the	most	compelling responses are	listed below

.

• “ We	could	eventually	lower	freight	pricing	due	to	lower	fuel	costs. ”Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 54 • “ [We	would] Quickly	adopt	the	practices	to	our	other	applications	and	divisions. ”

• “ We	did	it,	now	keep	being	aggressive	with	all	opportunities,	even	with	CNG	tractors. ”

• “ Become	more	aggressive	in	technologies	outside	of	mandated	ones. ”

• “ Lower	our	trade	cycl e,	since	we	know	our	fu ture	trucks	will	have	better	MPG

. ”

In	some	cases,	the interviewer	asked	if	better	MPG might	encourage	more	miles	being	driven	by	trucks	and universally	the response	was	“absolutely	not .” Given	the	industry	history	of	attention	to	th ese	metrics,	tools emerging	that	ass ist	this	management	such	as	GPS and routing,	the	study team	believes	there	is	little	to no rebound	effect in	the	on

- road	freight	sector

.

Owner

- O perator Data

This	 study	 is unique due	 to the high number	 of owner

- operator participants	 (1,892) that	 were	 reached through	 the	 use	 of online survey s

. As	 mentioned	 before,	 t he survey	 was	 sent	 to	 two owner

- operator stakeholder	 groups : Cascade	 Sierra	 Solutions owner

- operator contacts	 and	 Kevin	 Rutherford’s Lets	 Truck Sirius	 XM	 stakeholder	group. The perspectives	 of	 this	group of	 owner

- operators	and	 small	 companies are interspersed	 throughout	 the report,	where	appropriate.	 	 Listed	 below	are	additional data	 summaries from
th e	survey	results

.

• 95%	have	five	or	fewer trucks	in	their	fleet

• 49%	own	their	own	trailers

• 75%	consider	themselves to	be long

- haul

• 122,099	 average	 miles	 driven	 per	 truck	 in	 2012 with	 the responses rang ing from	 about	 50,000	 to 200,000

• 6. 6 average	miles	per	gallon	reported

• 59%	lease	their	trucks	to a	fleet

• 74%	would	retrofit	their	existing	tractor	rather	than	wait	until	they	bought	another	to	employ	 fuel

saving	technologies

• 77%	 would	 replace	 their	existing	 tractor	 with	 a	more	efficient	 used	 tractor rather	 than	 buy	 a	 new

tractor

• Purchasing	decisions a re most influenced by	fuel	efficiency	and	reliabilityBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 55 IV. Conclusions and	Recommendations

Fuel	costs	for	on

- road	truck	owners	and	fleets	are	on	average 35% of	their	total	operating	expense.		With	the cost	 of	 fuel	 steadily	 increasing,	 conventional	 wisdom	 would	 dictate	 that	 available	 technologies	 to	 improve fuel	economy efficiency would	be	widely	adopted	by	the	trucking	sector.		However,	in	reality,	this	is	not the case	as	there	are	a	number	of	available	technologies	shown	to	improve	fuel	economy that	have	had	limited adoption	to	date .		This	report	sought	to	investigate	the	prevailing	barriers	that	stand	in	the	way	of	the	greater adoption	of fuel

- saving technolo gies for	 tractor

- trailers	in	N.	America .		The	 study	included	a	unique	 survey approach	 that amassed the	 perspectives	 of a	 number	 of critical	 decision	makers	 throughout	 the	 long

- haul industry	sector : from fleets,	to manufacturers, to	integrators	and	builders

, to	dealers, to	equipment	leasers

, to	 shippers, and o wner

- operator s to	 better	 assess	 the complex	 set	 of	 issues	 that	 govern	 decisions	 about technology	development	and	investment

. By	design,	 t he	 study	participants are probably	more	likely	 to	be

more technology	progressive	than	the	industry	as	a	whole

. Consequently ,	the	barriers	identified in	this	study

are likely	even	more	pronounced for the	industry	as	a	whole.	The	study	identifies	barriers in	many	areas	and at	key	decision

- making	junctures that	lim it	the large

- scale	deployment of	available	efficiency	technologies	for

tractor

- trailers .	 	 The	 five primary barriers that	 have	 been discussed in	 this	 report as	 well	 as	 additional relevant	findings	about	split	incentives	and	the	rebound	effect are	summarized below

.

Uncertaint y about	 Payback

– Universally,	 fleets	 make	 decisions	 to	 buy	 new	 technologies	 using	 a	 payback calculation,	and	manufacturers	and	 technology	 suppliers	 utilize	 similar payback calculations	in	 determining what	 technologies	 or	 technology	 packages	 to	 bring	 to	 market.	 	 Two	 distinct	 themes emerge :	 (1) short paybacks (i.e.	2

- 3	years	or	less) are expected by	the	industry

, and	(2)	payback	calculations	are	not	very	well
defined	 or	 consi stent	 across	 the	 industry ,	 partly	 due	 to	 the	 high	 degree	 of	 heterogeneity	 in	 the	 trucking
business

. As	supported	by	 the	interview	responses,	a	general	rule

- of

- thumb is that	new	 technologies	must meet	a	paybac k	requirement	on	the	order	of	18	month s for	for

- hire	fleets,	which	tended	to	have	the	shortest ownership	cycles	and	expected	payback	times	out	of	all	of	the	end	user	groups .		In	fact,	it	seems	that	product development	 for	 the	entire	industry	 seems	 to	be	driven	by	what	is	 required	 for	 for

- hire	 fleets.	I n	addition, payback	 calculation	 methodologies	 vary	 widely	 across	 the	 industry	 in	 terms	 of	 comprehensiveness	 and consistency. However,	a	common	 theme	across	all	of	 the	end	users	groups	was	a	strong	 tendency	 towards risk	aversion,	which	is	certainly	reflecte d	in	their	assumptions	for	the	fuel	consumption	reduction	potential	of technologies

Lack	of Capital

– Often,	there	is	a	lack	of	capital	 for	acquiring	new	technologies.		It	was	 found	that	in some

cases , even	after	the	fleet	has	confidence	that	a	technology	would	deliver	a	payback	for	their	operations,	lack of	 access	 to	 capital	 for	 purchasing	 technologies	 is	 an	 issue. Adjusting	 for	 inflation,	 n ew	 truck	 cos ts	 have increased	by	 roughly 2 0

- 30 % over	 the	past	5

- 7	years,	and	 the	money	a	 fleet	can	 spend	on	 fuel	efficiency features	may	compete	against	other	features	such	as	cabin	amenities	to	better	attract	and	retain	drivers	as well	as	other	new	technologies	for	improved	safety,	communications,	rou ting,	etc.

Lack	of Credible	Information	(verifying	and	sharing)

– Credible	information	is	an	overarching	barrier	that	can be	 broken	 down	 into	 two	main	 issues:	 (1)	 verifying	 information	 early	 in	 the	 product	 cycle	 and	 (2)	 sharingBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 56 information	 later	 in	 the	 pr oduct	 cycle.	 There	 is	 difficulty	 obtaining	 accurate	 data	 on	 new	 technologies	 to make	adoption	decisions	early	in	a	technology’s	life.		Verifying	technologies	in	the	early	stages	of	its	life	cycle is	challenging

, and	redundant	testing efforts	are commonplac e as	fleets	are	hesitant	to	trust	the	claims	made by	 technology	 suppliers	 and	 OEMs .	 End	 users	 struggle	 with	 the	 lack	 of	 confidence	 in	 outside	 information coupled	with	belief	 that	 they	need	 to	perform	customized	 testing	 to	determine	 the	appropriateness	of	 t he
techno logies	 for	 their	specific	 fleet

. Self

- generated	r eliable	data	comes	at	a	high	cost	 that	many	end	users are	unwilling	or	unable	to	pay.

As	 new	 technology	 is	 successfully	 adopted	 by	 the	 innovators	 and	 early	 adopters,	 the	 information	 is	 many

times not	 consistently	 disseminated	 to	 the	 industry	 as	 a	 whole.	 More	 often	 than	 not	 this	 information	 is shared	 informally	 and	 inconsistently	 through	 anecdotal	 means.	 	 The	 sharing	 of	 data	 between	 credible, trusted	sources	is	the	primary	tool	for	the	later	adoptin g	fleets	to	accept	the	technologies	in	their	operations. For	most	end	users,	 this	study	suggests	 that	second	 to	self

- generated	data,	 fleets	and	owner

- operators	are most	influenced	by	their	peers,	that	is	companies	(or	individuals)	engaged	in	similar	trucki ng	operations. The
lack	 of	 standardized	 information and/or	 platforms	 for	 information sharing	 creates	 less	 confidence	 for	 the early and	late majority adopters	to	invest in technology	and slows adoption	cycles.

Insufficient Reliability

– Not	surprisingly,	reliability	tends	to	be	inconsistent	on	new	technologies and	product
lines

. T he on

- road truck ing sector is	 extremely adverse to	 any	 sort	 of	 reliability	 issues	 in	 their	 equipment. Downtime	translates	directly	to	profit	losses,	and	there fore	avoiding	downtime	is	a	constant	battle	most	end users	 are	 tackling	 daily. Moreover, many early	 generation products develop	 initial	 reputations	 for	 being
unreliable

, and even	 when	 these	 issues	 are resolved in	 subsequent generations

, the	 original	 stigma of unreliability	is	still	attached to	these technolog ies

.

Lack	of Availability

– Due	to	the extended maturation	and	uptake cycle s in	the on

- road truck	market,	many technologies	 take	a	 significant	length	of	 time	 (many	years)	 to	become widely available across	a	number	of
different	manufacturers .	Lack	of	availability	is	a	clear	barrier	to	market	penetration.

Aside	 from	the	 five	main	barriers	discussed	above,	there	are	additional	interesting	 findings	 from	this	study.
These	are summarized below:

Split I n centives

– The	 split	 incentive	 ( i.e. the	 entity	 paying	 for	 the	 fuel	 is	 not	 the	 entity	 paying	 for	 the technology)	has	long	been	considered	a	key	barrier	to	technology	adoption.		This	study	found	that	the	split incentive	is	not	as	critical	as	once	was	percei ved,	mainly	due	to	the	fact	there	are	less	and	less	cases	where the	 technology	 buyer	will	 see	 zero	 benefit	 (direct	 or	 indirect)	 from	 improved	 fuel	economy

. Although	 the split	incentive	was	not	found	to	be	universal	enough	to	be	included	in	the	top	list	of barriers,	there	are	still

situations where	it	is	very	important.	The	most	obvious	of	these	is	in	the	area	of	trailer	technologies.	There are	many	available cost

- effective trailer	technologies	that	c an	improve	fuel	efficiency	(NACFE	2013) ,	yet	there

is	sti ll	a	barrier	to	adoption due	to	ownership	dynamics .		A	significant	amount	of	tractor	owners	do	not	pull their	own	 trailer	and	 therefore	 trailer	owners	would	see	no	direct	benefit	 from	upgrading	 their	 trailer.	ThisBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 57 split	 incentive for trai lers	 is	 most	 prevalent	 in	 the f or

- hire fleets	 and less	 so for r etail/ p rivate f leets and

o wner

- operator s , where	many	trailers	are	pulled	by	their	owners.

Rebound	E ffect

– Overall,	this	study	found	that	rebound	effect s ,	defined as the	extent	to	which	benefits	from efficiency	improvements	are counteracted by	increased	usage, are	negligible .	The	literature	suggests	that	the rebound	effect	can	be	difficult	to	measure	(or	even	define) .	T he	results	from	this	study	are	merely	qualitative and	 should	 be	 taken	 as	 such.	 	 Overall,	 the	 fleets	 surveyed	 were	 adamant	 that	 no	 additional	 usage	 would occur	 if	 they	 were	 to	 realize	 a	 significant	 fuel	 economy	 improvement	 in	 their	 fleet.	 Instead,	 those	 savings
would	be	invested	or	directed	elsewhere	into strategies that	will	help	improve	their	market	competitiveness, such	as	into	new	technologies	or	lower charges	for	goods	movement

.

Recommendations	for	Future	W ork

Based	on	the	results	of	this	study,	we	propose	the	following	areas	for	future	work.		Furth er	studies	should	be
conducted	 to	look	at measures to address some	of	 the	barriers	identified in	 this	study .	The	most pervasive barrier,	the	lack	of	credible	information,	is	the	logical	first	one	to focus	on due	to	the	fact	that	it	impacts all	of
the remaining	 barriers to	 some	 extent	 or	 another .	 Future efforts should	 focus	 on practical and	 credible
method s for	 validating	 technologies	 and	 disseminating	 the	 information	 in	 a	 reliable	 and	 consistent	 way. Policy	measures should	be pursued	if the y can	effect ively promote technologies	that	are	delivering	economic
benefit s and	limit	the	adverse	consequences	on	the	industry	as	a	whole.Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 58 References

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Carbon	War	Room.	2012. Road	Transport:	Unlocking	Fuel

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CE	Delft.	2012 .	Market	Barriers	to	Increased	Efficiency	in	the	European	On

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US	Department	of	Energy	( DOE ) .		2009.		Research	and	Development	Opportunities	for	Heavy	Trucks.
Available	online	at http://www1.eere.energy.gov/vehiclesandfuel s/pdfs/truck_efficiency_paper_v2.pdf

US	Energy	Information	Administration	(EIA).	2013.	Gasoline	and	Diesel	Fuel	Update	(June	24,	2013).	Available
online	at http://www.eia.gov/petroleum/gasdiesel/

Ellram	and	Golicic.	2011. Environmentally	Sustainable	Transport. Executive	summary	available	online	at http://www.cascadesierrasolutions.org/libsmartway.aspx

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- content/uploads/2012/01/Driving

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2020

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. 2013

. Fleet	Fuel	Study,	March	2013 .		Available	online

at http://nacfe.org/wp

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### July 2013 Page 59 Nadel .		2012. The	Rebound	Effect:		Large	or	Small?	An	ACEE	White	P aper, available	online	at http://aceee.org/files/pdf/white

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### ( NESCAUM )

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National	Private	Truck	Council	( NPTC ) .	2011. Benchmarking	Survey	2011 .		Available	online	at http://go.postbidship.com/rs/postbidship/images/2011

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### Appendix	A : List	of ExhibitsBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 60 Figure	1.	Overview	of	Barriers

................................ ................................ ................................ ......................... 5

Figure	2.	Cost	of	Trucking

- Dollars	per	Mile

................................ ................................ ................................ .... 9

Figure	3.		2015

– 2020	New	Vehicle	Potential	Fuel	Savings	Technologies

................................ ................... 10

Table 1 .		Industry	Stakeholder	Groups	Surveyed

................................ ................................ .......................... 1 4

Table	2.		Summary	of	Data	Methods

................................ ................................ ................................ ............. 1 8

Figure	4.	CSS	Survey	Respondents’	Location

................................ ................................ ................................ . 20

Table	3.		Preliminary	Findings	Reviews

................................ ................................ ................................ ......... 21

Table 4.	Qualitative	Summary	of	Interview	and	Survey	Responses

................................ .............................. 2 2

Figure 5 .		Tractor	Trade	Cycles

................................ ................................ ................................ ...................... 2 4

Figure 6 .		Acceptable	Payback	for	Technologies

................................ ................................ ........................... 25

Figure 7 .	Importance	of	Factors	Influencing	Specifications

................................ ................................ .......... 31

Figure 8 .		Value	of	Resale	to	each	Company

................................ ................................ ................................ . 32

Figure 9 .		Information	across	Adoption	Cycle

................................ ................................ ............................... 33

Table	5.		Interview	Answers	to	Testing	Questions

................................ ................................ ........................ 34

Figure 10 .		Value	of	Various	Information	Sources

................................ ................................ ......................... 35

Figure 11 .		Top	Reasons	Not	to	Purchase

................................ ................................ ................................ ...... 39

Figure1 2 .		Owner

- Operator	Source	of	Information

................................ ................................ ....................... 40

Figure 13

. Owner

- Operator	Confidence	in	the	Benefits	of	Fuel

- Saving	Technologies

................................ . 41

Figure	1 4 .		Life	of	a	Technology	over	an	Adoption	Cycle

................................ ................................ .............. 46

Figure	1 5 .		Technologies	with	Short	Term	Potential

................................ ................................ ..................... 48

Figure	1 6 .		ATA: For

- hire TL	Carrier	Driver	Turnover

................................ ................................ ..................... 49

Figure	1 7

. NPTC	Benchmark	Survey:	Private	Fleet	Driver	Turnover

................................ ............................. 50



### A ppendix B : Example	of	an	interview template ( used	for l arge	and m edium	sized	fleets)Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 61 ICCT	‘Barriers	to	Technology’	Flee t	Carriers	Questionnaire

The	 International	 Council	 on	 Clean Transportation	 (ICCT)	 has	 undertaken	 a	 study	 of	 the	 market characteristics	in	the	goods	transportation	by	class	7	&	8	tractors	to	identify	the	‘barriers	to	technology’ adoption	 that	 currently	 exist	 in	 the	 U.S.	 on

- road	 freight	 sector.	 The	 results	 of	 this	 st udy	 will	 help	 our trucking	industry	to	identify	the	initiatives	and	measures	that	can	be	most	effective	in	combating	those
barriers.

It	is	important	to	understand	the	process	that	fleet	owners	use	to	arrive	at	decisions	for	capital	purchase in	acquiring	ne w	vehicles,	 technologies,	along	with	establishing	 standards	of	‘best	practices’	 to	achieve greater	fuel	efficiency.	The	cost	of	fuel	impacts	trucking	fleets	of	all	sizes,	and	technologies	with	relatively short	 payback	 times	 can	 see	 limited	 adoption	 due	 to prohibitive	 up

- front	 costs,	 risk	 aversion	 to	 new technology,	 or	 a	 disincentive	 to	 invest	 in	 more	 fuel

- efficient	 equipment.	 This	 study	 will	 collect	 and present	the	barriers	in	a	final	report	and	presentation	to	ICCT.

Interview Date: Interview Conducted By: In Person ________ Conference Call ________ Interviewer Conducting Interview:

1. Company Information

Name of Company Contact Person Contact Details

Fleet Vehicle Information Number of Power Vehicles _________ Number of Operation Centers _________ Number of Maintenance Facilities ______ Class 8 Vehicles _______ Class 7 _______ Number of Trailers__________ Number of Drivers __________ Fleet Market Application Over

- the

- Road Long Haul ________ Truck Load (TL) ________ Less Truck Load (LTL)_______ Bulk _______ Van ________ Size of Van Trailer

______ Pickup & Delivery ________ Intermodal ________ Container _______ Contract Carrier _______ Refrigerated ________ Flatbed ________

Company Ownership Self ________ Family ________ St ockholder Group ________ 3PL __________ Other Company ________ Name of Other Company ____________________________
Fleet Market Area 48 States + Canada _______ Regional _________ (Regions Coverage)

_____________ City / Urban / Rural ___________ Name of City _______________________________

Notes:Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 62 Note** All company information will not be shared or distributed beyond the survey interview protocols of data collection wit hout express permission of the company. (Surveyors’ initials)______________________

General Barriers to the Implementation of Energy Efficient Technology Measures

The American Transportation Research Institute (ATRI) September 2012 analysis “Operational Costs of Trucking” outlined that fuel costs have rise n nearly 10 percent in the first eight months of 2012. Fuel efficient technologies for power equipment and trailers have had a major influence on the decisions by fleets to control the cost of fuel. The following questions will focu s on the process of eval uating to adopt fuel saving technologies.

1. What is your process to determine if a technology is a good investment for your fleet?

________________________________________________________________

____________________

__________________________________________ __________________________________________

2. Ask the 7 common questions.

a. Rate the importance of the following factors when putting together specifications for new equipment.

b. What	is	the	necessary	payback?

c. Which factors influenced your decision not to install a technology and rate its importance?

d. How do you evaluate new technologies for adoption?

e. When researching a technology, how do you value the information from these various sources?
f. Which technologies do you see having the most short

- term potential?

g. If your fleet has adopted technologies that deliver a 1 mpg, 5% improvement, what effect would this have on your operation?

3. How do you calculate ROI? (Please indicate the following that apply to your calculation)

Total cost of ownership (TCO) _____ Inc remental cost of technology _____ Maintenance _____

Durability cycle _____ Residual value _____Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 63 4. When considering technologies for adoption into your fleet, how do you determine whether to buy it only on new equipment, retrofit only on old equipment or b oth?

5. A number of the ‘alternative’ fuel options currently provide a considerable reduction in the price of fuel compared to diesel. Please indicate your position on the ‘alternative’ fuel option for your fleet:

_____ Currently considering ‘alternative’ f uel technology

– LNG _____ CNG _____ Bio

- fuels _____ _____ Wait for technology to mature in the industry

– LNG _____ CNG _____ Bio

- fuels _____ _____ Not considering the ‘alternative’ fuel technology

Notes and Comments:

__________________________________________________________________

6. Does your organization contract with Owner

- operator s and small independent fleets?

Yes _____ No _____

If ‘Yes’, does your contract require the Owner/Operator or small independent fleets to meet a technology threshold established for your fleet with the vehicle and/or trailer they have under the contract?

Yes _____ No _____

7. In evaluating the cost of complying with regulations for existing fleets, does this restrict the adoption of fuel ef ficiency technologies that have been determined to work for your fleet? Yes _____ In some instances _____ No _____

2a. Please explain _____________________________________________________________

________________________________________________________ ____________________ 8. Would you consider a fuel efficient technology for your fleet even though the technology does not assist your fleet in meeting emission regulation mandates?

Yes _____ No _____ Open to consideration _____

**Special Question**Your fleet has been selected to participate in this survey because of the value of your responses which w ill assist in discovering the barriers that exist to the adoption of fuel efficient technologies. Would you commit to become a stak eholder in a future effort to examine the solutions to these barriers which would include an internet based survey? Yes _____ No _____Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 64 A ppendix C :		C ommon	questions	template

All	 in

- person	 and	 telephone	 interviews	 were	 asked	 a	 set	 of	 Common	 Questions with	 possible	 answers predetermined	as	drop	down	menus	in	the	interviewer’s	template .		The	interviewer	tried	to	ask	all	questions,	but due	to	time	constraints	had	to	prioritize	which	ones	to	get	answers.		This	data	was	used	to	compare	responses amongst	di fferent	stakeholder	groups.		Supply	Chain	interviewees	were	sometimes	asked	to	answer	the	question as	if	they	were	a	fleet,	or	how	they	believe	the	fleets	would	answer.

1. Rate	the	importance	of	the	following	factors	when	putting	together	specifications	for new	equipment.

a. Fuel	Economy
b. OEM	make/model

c. Mandated	regulations
d. Application	drive	cycle

e. Reliability
f. Driver	recruitment/retention

g. Resale	value
h. Fleet	image

i. Durability/longevity j. Maintenance
2. What	is	your	necessary	payback?

a. What	is	the	needed	payback	to	purchas e	a	technology?
b. Do	grants	influence	your	purchase?

c. Given	your	trade	cycle,	what	is	the	absolute	maximum	payback	you	would	consider?

3. Which	factors	influenced	your	decision	not	to	install	a	technology	and	rate	it’s	importance.

a. Research	data	suggested	this	te chnology	was	not	appropriate	for	your	fleet
b. Available	data	was	not	relevant	to	your	operations.

c. Although	available	data	suggested	it	would	work,	you	were	not	convinced
d. No	outside	validation	of	manufacturers	claims

e. The	testing	methods	for	the	data	did	not meet	your	standards
f. Gathering	the	data	yourself	was	too	expensive	or	time

- consuming

g. Product	support/warranty	was	not	adequate
h. Additional	maintenance	and	overall	lifecycle	cost	were	too	high

i. Weight	of	the	new	technology	was	too	much j. The	technology	was	not	a vailable	from	your	preferred	equipment	dealer
k. Concerned	about	disruptions/negative	impacts	on	your	operations
l. Your	drivers	did	not	like	the	technology

m. Buying	and	installing	the	technology	was	simply	too	expensive

4. How	do	you	evaluate	new	technologies	for	ad option?

a. Do	you	require	suppliers	to	test	product	by	a third

- party ?
b. If	so,	what	percentage	of	the	cost	do	they	pay?

c. Do	you	require	a	trial	run	in	your	fleet?Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 65 d. If	yes,	how	many	units	would	you	test?

e. How	many	months	would	you	run	the	test?

5. When	researching	a technology,	how	do	you	value	the	information	from	these	various	sources?

a. Technology	manufacturer
b. EPA	SmartWay

c. Third

- party validation
d. Other	fleets	at	an	event	like	TMC

e. Other	fleets	experience
f. Other	testing	reports

g. OEM	and	dealers
h. Your	own	research	capabilit ies Looking	at	the	source	you	scored	highest,	to	what	degree	does	it	influence	your	decision?

6. Which	technologies	do	you	see	having	the	most	short	term	potential?

a. Low	rolling	resistance	tires
b. Tire	inflation	/	monitoring	systems

c. Idle	reduction
d. Trailer aerodynamics

e. Tractor	aerodynamics
f. Automated	manual	transmissions

g. 6x2	axle	configurations
h. Direct	drive	transmissions

i. Telematics

7. If	your	fleet	has	adopted	technologies	that	deliver	big	savings,	1	mpg	or	15%	improvement,	what	effect would	this	have	on	your	op erations?

a. What	might	you	do	differently?
b. Decisions	/	actions	in	your	fleet?Barriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



### July 2013 Page 66 Appendix D :		Questions	in	the O wner
- operator SurveyBarriers	to	Increased	Adoption	of	F uel	Efficiency Technologies in	Freight	Trucking



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