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Development of Specifications for Heavy-Duty Tractor Trucks in Canada and the United States

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Development of Specifications for Heavy-Duty Tractor Trucks in Canada and the United States WORKING PAPER 2018-27 Development of specifications for heavy-duty tractor trucks in Canada and the United States Authors: Ben Sharpe, Dave Schaller (The North American Council for Freight Efficiency) Date: October 2018 Keywords: Tractor-trailers, vehicle specifications, trucking industry 1. Introduction to gain a deeper understanding of the The paper is organized as follows. process of how the features of Class In Section 2, we describe the two In the heavy-duty trucking industry, 7 and 81 tractor trucks are specified most common pathways for speci- fleets and owner-operators often have for purchase in Canada and the United fying tractor trucks in Canada and the ability to customize a wide vari- States. The primary objectives of this the United States, as well as charac- ety of design features in the truck, paper are to: teristics of the specification process including engine size and power rat- that the authors have gleaned from ing, transmission type, axle configura- • Gain a better understanding of interactions with thousands of fleets, tion, gear ratios, tire sizing and type, the overall process for specifying manufacturers, and suppliers in their aerodynamic features, and countless and purchasing new Class 7 and 8 combined 30-plus years of experi- other parameters. Different combina- tractor trucks; ence in the field. Section 3 outlines tions of design choices can result in the methodology of the fleet survey thousands of unique specifications for • Interview a diverse cross section that was carried out for this proj- the same truck model. With Canada of trucking fleets, including car- ect and discusses the findings from and the United States both having riers of various sizes, geographic the interviews by four major topic finalized regulations that will affect locations, and operating profiles; areas: 1) trusted sources of informa- truck designs and the options avail- • Glean insights into how fuel-sav- tion during the specification process, able, it is important that policymakers ing technologies are marketed 2) specifying fuel-saving technolo- are familiar with the process by which in North America and how fleets gies and packages, 3) differences in fleets make these choices as well as make decisions about adopting the specification process in Canada the information available from dealer- these technologies; and ships and manufacturers to support and the United States, and 4) macro specification decisions. • Synthesize the findings from the forces in the trucking industry, includ- interviews into information that is ing driver shortages and turnover as The motivation for this collabora- relevant for policymakers. well as emerging trends toward elec- tive study between the International trification and automation. In Sec- Council on Clean Transportation 1 Class 7 trucks have a gross vehicle weight tion 4, we outline several key insights rating (GVWR) of between 26,000 and (ICCT) and the North American Coun- 33,000 pounds; Class 8 trucks have a GVWR from the study and highlight areas cil for Freight Efficiency (NACFE) is heavier than 33,000 pounds. for future work. Acknowledgments: This work is supported by Environment and Climate Change Canada. Rachel Muncrief, Oscar Delgado, and Felipe Rodriguez of the International Council on Clean Transportation, and Mike Roeth of the North American Council for Freight Efficiency provided critical reviews on an earlier version of the report. © INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION, 2018 WWW.THEICCT.ORG DEVELOPMENT OF SPECIFICATIONS FOR HEAVY-DUTY TRACTOR TRUCKS IN CANADA AND THE UNITED STATES 2. Overview of truck Truck dealership Manufacturer account manager specification process Large fleets: This section provides an overview Medium and small fleets, owner-operators orders more than ~100 trucks/year (20 – 25% of sales in U.S. & Canada) of the truck specification process in (75 – 80% of sales in U.S. & Canada) Canada and the United States. In the following three subsections, we dis- Trucks in stock that cuss three factors that have a signifi- Fleet’s procurement team and OEM meet customer needs? cant impact on the process in which account manager develop specifications • Ongoing interaction between OEM trucks are specified, as well as the and fleet technologies and features that end up Yes No • Very large fleets will have dedicated on those trucks. These factors are the team at OEM for procurement • Specifications review: examine existing size of the trucking fleet, the type of Customer and dealer rep truck spec line-by-line prior to making fleet—whether for-hire or private, and develop truck specifications new order. OEM rep details what has secondary markets. • Process takes between 2 changed from the previous model year. and 8 hours • Thousands of options à 2.1. FLEET SIZE Degree of customization Pilot review (optional) depends on the level of the Build one truck a few weeks ahead Typically, the process for purchasing sophistication of the fleet of the remaining order to give the and specifying a new truck depends customer the opportunity to see it on the size of the fleet. Small and being built and/or review the vehicle when it comes o the assembly line. medium-sized fleets tend to acquire Trucks manufactured trucks via a dealership, whereas large fleets buying 100 or more trucks a Trucks manufactured Trucks delivered year have assigned account managers from truck original equipment manu- Trucks delivered facturers (OEMs) to facilitate pur- chases. Figure 1 illustrates the key fea- Figure 1. Two primary pathways for purchasing and specifying a tractor truck tures and decision points of the truck operations, challenges, and desires. businesses require different applica- specification process for smaller and This typically involves just one or two tions. For example, the need for dif- medium fleets compared with larger dealership employees and one or two ferent base specs can reflect varia- ones. Each pathway is discussed in representatives from the fleet or the tions in: more detail in Sections 2.1.1 and 2.1.2. owner-operator directly. The specifi- cation sheet is typically created at the • Type of operation: such as dry van versus refrigerated freight 2.1.1. Owner-operators and customer’s facility, and the process versus flatbed transport. small to medium-sized fleets: can take anywhere from a few hours truck dealerships to a full work day. An example speci- • Differences in gross combined fication sheet from an actual truck weight allowed in various prov- Truck dealerships tend to know their order is provided in Appendix B. inces or states. local customers well, as they closely track the operating profiles of exist- • Length of haul: for example, day 2.1.2. Medium and large fleets: ing and potential customers. The cab versus single driver sleeper national account managers buyer may start the discussions on versus teams with double bunk new truck purchases based on exist- Large fleets may have one or more sleeper cabs. ing specifications or ask another fleet direct points of support from the OEM • Merged fleets: It is often the case to use its specifications as a starting such as sales, parts, warranty, and that large fleets are involved in point. The dealer’s sales person will training, depending on the situation. an acquisition or merger with most likely visit the fleet location and Virtually all have a national accounts another fleet, which frequently develop one or more proposals to manager to oversee the relation- brings different types of tractor meet the fleet’s needs based on what ship. They may also have more than and trailer equipment together the sales person has learned about one base set of specifications if their into one operation. 2 INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION WORKING PAPER 2018-27 DEVELOPMENT OF SPECIFICATIONS FOR HEAVY-DUTY TRACTOR TRUCKS IN CANADA AND THE UNITED STATES Setting the specifications for the next UPS Inc. order may involve multiple people Ryder Supply Chain Solutions within the fleet to represent areas FedEx Corp. TFI International such as maintenance, driver recruit- Landstar System For-hire ment/training, warranty, and finance. Swift Transportation With medium and large fleets, there XPO Logistics is a good chance that there will be J.B. Hunt Transport Services Inc. several OEM representatives involved YRC Worldwide from different departments, such as Schneider PepsiCo Inc. engineering, used trucks, and reliabil- Sysco Corp. ity. The most common OEM point of Wal-Mart Stores contact for the fleet is the sales/appli- Coca-Cola Co. cations engineer, as he or she works U.S. Foods Private as a technical liaison between sales Reyes Holdings Halliburton Co. and engineering/manufacturing. The Agrium Inc. sales/applications engineer is typically McLane Co. responsible for an application or model C & J Energy Services family, or multiple applications or fami- 0 20,00040,00060,00080,000 100,000 120,000 lies. This puts them in position to have Tractor trucks owned / operated considerable knowledge of standard . Ten largest for-hire and private trucking fleets in North America in 2017 features, published options, unpub- Figure 2 lished options, and unusual customer occur at various places over several Through conversations with several requirements that may even need to days or weeks. fleets of various types and sizes across be completed after the production North America, as well as experts line. Their position helps them know from manufacturing, the authors 2.2. FOR-HIRE VERSUS what is changing in model options as have learned the principal differences PRIVATE FLEETS well as how the industry is adapting to between for-hire and private fleets. new or updated technologies. Another important criterion is Table 1 summarizes the typical charac- whether the fleet is a for-hire or a teristics that differentiate for-hire and Meetings with medium and large private fleet. For-hire fleets contract private fleets and how these dispari- fleets may occur at the customer’s out trucking services as their pri- ties translate to different preferences facility to allow the OEM to see the mary business and generally domi- for vehicle features and technologies.
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