Balance. This is not a difficult concept to understand, but it is often a difficult concept to put into practice. Balance, and truly understanding the trade-offs associated with policy decisions, is something our entire nation could use a little bit more of. That likely holds true in politics, social issues, business strategies and personal pursuits.
Throughout the duration of the global pandemic, our supply chain was anything but balanced. The consequence of that imbalance resulted in destocked shelves in stores, backorders for online purchases, consumer buying behavior that can only be described as hoarding, freight that sat on docks waiting for short-staffed drivers to pick it up, and levels of inflation that the country had not seen since the 1970s.
As a reaction to this imbalance, the shipping community was pressed to over-order products, not knowing what they could get or when it would arrive. When those orders finally did arrive, many of those products were "out of season," resulting in a sharp increase of unusable inventory. Several years removed from the peak of that chaos, we are finally beginning to see signs of a return to normalcy in shipping orders. In essence, that is the basic summary of the trucking industry’s latest boom to bust experience, with the boom and the bust being deeper and more dramatic than perhaps any cycle we have ever seen.
The ideal situation would be that the nation has learned a valuable lesson about the fragile nature of the supply chain and the need to fortify our supply chain to keep freight flowing smoothly. That would be ideal, but that is not what appears to have happened. Since the end of the pandemic, the trucking industry has been inundated with an onslaught of rules, shifts in practice and policy pushes that further threaten the stability and effectiveness of the nation’s supply chain.
The U.S. Environmental Protection Agency (EPA) is set to enforce two upcoming rules affecting model year 2027 tractors. One rule would substantially reduce nitrogen oxide (NOx) emissions, while the other calls for a meaningful reduction in carbon dioxide (CO2) emissions. These two rules will likely result in a significant increase in the cost of a new tractor, which could place upward pressure on inflation, decrease the availability of new power equipment, and cause more downtime on that equipment until the technology matures.
The EPA is also working on a Greenhouse Gas Phase 3 rule that the industry would plausibly only be able to meet by moving to zero-emissions vehicles. While conceptually zero-emission vehicles sound appealing, in reality these vehicles: 1) would increase the cost of a power unit by about 300%; 2) will be 5,000-plus pounds heavier than a diesel tractor, resulting in more trips to haul the same amount of freight; 3) will see an 85% to 90% drop in range capabilities, compounding the issue of needing more trips to haul the same amount of freight; 4) have seen a sharp increase in equipment downtime due to the lack of developmental maturity in the technology; 5) will require a gargantuan investment for charging infrastructure; and 6) will likely cause significant stress on the nation’s electrical grid, resulting in another huge investment to build more power generation plants and update electrical transmission capabilities.
Whether you are for or against the rapid deployment of zero-emissions tractors, these are the realities facing the current state of technology. Other forms of zero emissions trucks, including the use of hydrogen-based fuels, face similar hurdles.
