Assessment of Fuel Economy Technologies for Medium and Heavy ...

million gallons, for a combined rebound effect of about 9 to 30 percent (compared to 11-31
percent without rail fuel savings). Considering the same for alternative 2, the fuel reductions
of 9,800 million gallons will drop to 8,300 to 9,500 million gallons, for a combined rebound
effect of 3 to 15 percent (compared to 5-16 percent without rail fuel savings).
The third rebound effect: utilization reduction
Trucking is a cost-competitive business and profits are historically razor-thin. While trucking
companies work diligently to reduce operating costs out of competitive necessity, continued
cost increases force fleet owners to continue to look for ways to reduce operating costs. The
relief that comes from decreased operating cost (4 percent in alternative 1 and 7 percent in
alternative 2) is not likely to create a significant change in utilization optimization. However,
there is no evidence in the literature to quantify the degree to which trucking companies
maximize the utilization of their equipment or to describe how this might change with total
truck operating costs.
(iii) Vehicle Class Shifting
Key Question: If regulations or new technologies change the relative costs and performance
characteristics of various classes of medium and heavy vehicles, will some buyers choose larger
or smaller vehicles than they would have before the change
Background: Past regulations have had an impact on the choice of vehicle characteristics. Prior to
deregulation of the trucking industry, 4-axle trucks were common. After deregulation, most
carriers shifted to 5-axle trucks since these trucks could carry more freight and therefore operate
more economically, given weight per axle restrictions.
To induce class-shifting, truck fuel economy regulations would need to significantly increase the
cost (or decrease the performance) of one class of truck relative to another. The specific nature of
a vehicle class-shifting effect will therefore depend upon how the regulations are structured. A
―class-neutral‖ regulation could be conceived that does not lead to any shifts.
There is little or no literature that describes the cross-class mode shift between truck types based
on cost. The potential for class-shifting appears limited, however, because most equipment is
chosen to fit the physical requirements of a particular shipment, not because of changes in fuel
price. A shipper will hire carriers to minimize total logistics cost and the carrier will deliver a
service at the minimum possible cost (to maximize their profits). The shipment could be longhaul
(more than 500 miles, the one-day round-trip distance), short-haul (less than 500 miles), a
drayage shipment between an intermodal facility and the final destination, or a local shipment
between a regional warehouse and a grocery store. Shippers and carriers will give additional
consideration to whether the commodity is high-value and time-sensitive or low-value and less
time sensitive, whether the commodity will weigh-out or cube-out, and the labor cost. Other
vocational medium- and heavy-duty truck owners have very specific carrying and sizing needs
(e.g. dump trucks, garbage trucks, buses, and utility trucks). A shipper and carrier will examine
the set of requirements, negotiate a rate, and choose the optimal truck for the shipment. Shifting
between trucks and truck classes is complicated, but it is possible to conceive of some examples
where certain policies would create cases where a truck from one class might become fungible
with a truck from another class.
- 9 -