{"id":111665,"date":"2023-05-30T07:32:13","date_gmt":"2023-05-30T11:32:13","guid":{"rendered":"https:\/\/wasteadvantagemag.com\/?p=111665"},"modified":"2023-05-30T07:32:13","modified_gmt":"2023-05-30T11:32:13","slug":"navigating-the-carb-prebuy-for-truck-procurement","status":"publish","type":"post","link":"https:\/\/wasteadvantagemag.com\/navigating-the-carb-prebuy-for-truck-procurement\/","title":{"rendered":"Navigating the CARB Prebuy for Truck Procurement"},"content":{"rendered":"

Forward-thinking fleets leveraging strategic asset management partners and actionable data will avoid the need to react to prebuy cycles, enabling them to focus on their operations and realize a lower total cost of ownership while transitioning to emission-free trucks over time.<\/em>
\nBy Brian Antonellis<\/strong><\/p>\n

The U.S. EPA recently announced that it approved California\u2019s plans to require an increasing number of zero-emission heavy-duty trucks as the state pushes to cut pollution through its California Air Resources Board (CARB). Governor Gavin Newsome is expecting that half of all heavy-duty trucks sold in the state will be electric by 2035.<\/p>\n

Under the new rules, only zero-emission medium- and heavy-duty trucks would be available for sale in California starting with the 2040 model year. Commercial fleets of 50 or more vehicles, or fleets that generate more than $50 million in gross revenue, any new truck purchased after Jan. 1, 2024, must be zero-emission.<\/p>\n

CARB Mandates Will Cause a Spike in Prebuy Activity<\/strong>
\nHowever, vehicles with differing types and usages would have various phase-in dates according to the CARB plan. As such, state and local governments would be required to obtain zero-emission vehicles amounting to 50 percent of the additions to their fleets beginning in 2024. All new purchases would have to be ZEVs beginning in 2027. This means that truck and engine manufacturers have less than three years to undergo what industry observers label as a \u201cmanufacturing miracle\u201d to meet the new ultra-low-NOx mandates.<\/p>\n

As more fleets become aware of the CARB mandates and plans, the other large unknown is how much of an impact this ruling will have on the truck procurement cycle. A report recently released by ACT Research1 illustrates that a significant prebuy of Class 8 trucks may be likely before the EPA\u2019s upcoming round of emissions regulations targeting diesel exhaust emissions in 2027. ACT analysts believe the new standards will likely result in the largest truck prebuy ever, beginning sometime in 2025 or 2026. However, the industry may also face a large prebuy in 2023 ahead of the CARB mandate in 2024.<\/p>\n

Why are headlines about prebuys significant? Some industry observers believe these new mandates will further drive up the cost of diesel trucks to the tune of $25,000 to $30,000 extra per unit.2 Industry insiders also believe this will increase component costs by as much as $5,000.3<\/p>\n

Additional Pressures to Constrained Supply Chains<\/strong>
\nPrebuy activity could very well place further strains on fleets working through supply chain delays in the truck procurement process. Due to these supply chain disruptions, fleets will be challenged to pull a high percentage of their 2024 calendar year purchases into 2023. It is important to note that existing engine platforms will be able to meet 2024 regulations, including diesel particulate filter reconfigurations, fuel management systems, and warranty extensions, to ensure timely repairs are made.<\/p>\n

In meeting the 2027 CARB mandate, 2026 is expected to be the largest pre-buy. The 2027 mandates will introduce natural gas, electric and hydrogen engine types, and many diesel platforms will have to make significant changes to meet these new CARB requirements.<\/p>\n

Fleets Taking a Reactionary Approach Will Suffer<\/strong>
\nHowever, the rush to prebuy most likely means many fleets will take a reactionary approach to their procurement strategy, creating additional strains on supply chains. Leading fleets are working with their asset management partners to identify a holistic approach that leverages data and analytics to build a fleet modernization plan, and this will result in lowering their bottom-line costs over time.<\/p>\n

Another reason asset management partners are so valuable is that they help to make data more actionable. Fleets today are inundated with data. Most fleets have maintenance software systems that will provide every repair and every line item. They also have ELD devices and onboard computers that tell you where you have gone, how many miles you have run, how heavy you were when you ran those miles, and what part of the country you were in. However, companies need help today taking all that data and asking:
\n\u2022 What is the offering from the OEM?
\n\u2022 What is out there in the marketplace?
\n\u2022 What is the data that we have collected telling us?
\n\u2022 \u0007How do we put that into a roadmap for the next one, three, and five years?<\/p>\n

Actionable Data and Procurement Planning Will Help<\/strong>
\nThis level of actionable data-driven insight is crucial because it helps fleets build Modernization Studies, which have been proven to create more flexibility and business agility. These strategies are helping them pay closer attention to their truck\u2019s lifecycles to understand where they can save money by optimizing and shortening replacement cycles. Fleet studies take a closer look at performance data and economic factors that help fleets arrive at the right procurement strategy, shortening the lifecycle and preventing lengthier truck use. Additional data is being used in emissions scorecards to evaluate and reduce a fleet\u2019s carbon footprint.<\/p>\n

The fleets that operate with the lowest cost of ownership are the ones that subscribe to this flexible and environmentally responsible procurement strategy, as opposed to the legacy, pre-pandemic mindsets that were built on gut instincts and a \u201cthis is what I know, this is what I trust, this what I\u2019ve seen\u201d philosophy.<\/p>\n

Asset management partners can also help fleets as they realistically bridge today\u2019s clean-diesel technology into tomorrow\u2019s alternate fuel options, through an appropriate ESG roadmap to determine truck procurement strategies with optimal lifecycle management. This will maximize environmental considerations and organically progress toward alternate fuel technology. In doing so, fleets will achieve critical ESG goals and continuously operate the most appropriate equipment for their operation.<\/p>\n

There is a growing appetite for moving to zero emission equipment. In fact, a recent industry benchmark survey found that the majority of respondents (40 percent) said that they plan to deploy alternate fuel trucks within the next one to two years. This is a stark comparison to just a year ago when the majority (54 percent) said they plan to deploy alternate-fuel trucks within five to 10 years.<\/p>\n

Transitioning Your Fleet<\/strong>
\nIn reading today\u2019s headlines and recognizing the CARB mandates, fleets understand the importance of transitioning to a greener footprint. Still, the application must be appropriate for each fleet and its operations. For example, we have a high level of confidence with Battery Electric Vehicles (BEV) in operations close to the warehouse. We are excited about deploying electric yard trucks with our customers because we are getting a diesel truck off the road, and we can control the charge point. The truck is not leaving the yard, it is running all day, and it is generating a lot of hours.<\/p>\n

The next step is to shorten the range for deliveries around town. For example, think about food or beverage distribution and local commerce extending 50, maybe 75 miles a day and back in. We recognized that if you go right up against that 200-mile limit, you start giving everybody range anxiety. We want to make sure it really fits their business because it is crucial to avoid range anxiety for the drivers.<\/p>\n

Finally, it is about fitting into a fleet\u2019s lifecycle when you have identified the right areas that make sense close to the distribution network. It is not feasible for someone who is going 500 miles a day since the charging infrastructure is not ideal on the highways. Therefore, it is important to leverage data usage to identify what percentage of electric is going to fit into a fleet over the next one, three, and five years. This is identified through actionable data, which includes routing data and annual miles, so we can target individual distribution centers to put the trucks in the right place so that they are successful.<\/p>\n

All of this means that forward-thinking fleets leveraging strategic asset management partners and actionable data will avoid the need to react to prebuy cycles, enabling them to focus on their operations and realize a lower total cost of ownership while transitioning to emission-free trucks over time. | WA<\/p>\n

Brian Antonellis, CTP, is Senior Vice President of Fleet Operations at Fleet Advantage, a leading innovator in truck fleet business analytics, equipment financing, and lifecycle cost management. For more information, visit www.FleetAdvantage.com<\/a>.<\/em><\/p>\n

Notes
\nwww.truckinginfo.com\/10180199\/is-the-largest-truck-prebuy-ever-on-the-horizon
\n\u0007www.trucknews.com\/blogs\/new-emissions-regs-will-arrive-in-2027-and-chaos-may-ensue\/
\n\u0007https:\/\/podcasts.apple.com\/us\/podcast\/hdt-talks-truckingid1494189481?i=1000605237564<\/p>\n","protected":false},"excerpt":{"rendered":"

Forward-thinking fleets leveraging strategic asset management partners and actionable data will avoid the need to react to prebuy cycles, enabling them to focus on their operations and realize a lower […]<\/p>\n","protected":false},"author":1775,"featured_media":111666,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[95],"tags":[1099,130],"class_list":["post-111665","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-magazine-articles","tag-carb-prebuy","tag-trucks"],"jetpack_publicize_connections":[],"acf":[],"yoast_head":"\nNavigating the CARB Prebuy for Truck Procurement - 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