June 2008

LOUISVILLE, Ky. –A new truck, a new engine and a new technology in North America. There was plenty to discuss with Daimler Trucks North America officials at this year’s Mid-America Trucking Show.

Executive editor James Menzies sat down with: Melissa Kellogg, director of product marketing for Freightliner Trucks; David Siler, director of marketing for Detroit Diesel; and Christoph Hofmann, director of product strategy with Freightliner, to learn more about the Freightliner Cascadia, the DD15 and Daimler Group’s intent to use SCR technology in 2010.

TN: Last year around this time, you introduced the aerodynamic Cascadia highway tractor. How has it been received?

Kellogg: The truck has been very well-received. A lot of the initial comments around the vehicle were based on the expected fuel economy, the interior, the finish and the quality of the product. We launched it last May, and there was a lot of excitement about it, not only at the press launch but also at our dealer meetings. Our dealers have really embraced it, they’ve stocked quite a few of them.

Now we have the DD15 and those first production combination vehicles are coming out this month and I think the excitement around the two is building.

TN: Is the interest in Canada as strong as in the US?

Kellogg: Dealers have stocked the trucks and a lot of them did go up to Canada, in fact our number one dealer that took stock of them was a Canadian dealer, so they are selling up there as well.

Hofmann: It has been an absolutely flawless launch as far as reliability is concerned. Most often with a new product, people experience some reliability issues in the first period of time and there was nothing we have seen or heard from the customers. We hit the ground running with this truck as far as reliability is concerned and that’s something we’re really proud of.

TN: Freightliner has been quite active on the hybrid truck scene. How big a role do you think hybrids will play in the heavy-duty, long-haul segment?

Kellogg: I see a place for them, but I honestly think it’s more of a medium-duty application just based on the stops and starts of the vehicle. Medium-duty applications such as pickup-and-delivery, utility, and municipal get more of a stop-and-start kind of benefit, so I really think it’s going to be more successful in medium-duty than heavy-duty in the long-term.

I’m not saying that there won’t be heavy-duty sales, but I think the focus will be more on medium-duty.

Hofmann: It’s not that there is no fuel efficiency to gain in heavy-duty applications, but if you look at the overall business case for the customer, you make them pay quite a bit up-front which they will recuperate very quickly in a medium-duty stop-and-go application.

But in heavy-duty long-haul applications where you rarely stop, there’s not a whole lot of recuperation of energy and the fuel economy gains are much lower and usually the payback is not there to justify the up-front cost. So for the time being, we’re somewhat cautious on that front.

TN: As an OEM, how concerned are you about another pre-buy in 2009? Is it inevitable?

Kellogg: I think a lot of our largest customers in 2006 purchased a lot of vehicles in advance and got out of their trade cycles, and I think that they’ve realized maybe the benefit wasn’t there for them. I think in 2009, we’re going to see a ramp-up but it’s not going to be nearly as substantial as it was in 2006 and also therefore the decline in 2010 will be a lot less drastic than in 07.

TN:There’s been a lot of talk lately about the cost of fuel. What’s an OEM’s role in helping its customers cope with the challenge of record fuel prices?

Siler: The number one place to save fuel would be engine consumption. I think we covered aerodynamics with the Cascadia. On the DD15 design, we’re going to bring strong fuel savings even before 2010. Typically, the DD15, is 2-4% more fuel efficient than a current Series 60 engine, which is already at or near top of fuel efficiency food chain in North America.

The DD15 is going to take us further and by 2010 when we adopt SCR technology, there’s another 3- 5% fuel savings. You add all these on top of each other with the Cascadia’s aerodynamics, and you’re getting a lot of fuel savings -real dollars and the paybacks are pretty darn fast.

TN: With so much focus on fuel-efficiency, do you think we’ll eventually see the extinction of the classic-styled, flat-nosed truck?

Kellogg: I think there will always be a segment of the market, like in vocational applications, that isn’t as focused on fuel economy because their daily business doesn’t really allow them to be fuel-efficient.

They’re doing a lot of starts and stops, a lot of inner-city deliveries or construction, and I think that part of the market will always be a fit for more traditional vehicles.

I think long-term, we’re going to see more of a push for aerodynamics, especially with the fleets because of the cost of fuel but even then, we’re going to always have owner/operators that want the traditional fit and finish of a classic-styled vehicle.

I think it might shrink over time but I think there will always be some demand.

TN: Looking ahead, which segments of the industry do you feel present the best growth opportunities for Freightliner?

Kellogg: Medium-duty for sure. The smaller-sized fleets and owner/ operators -there’s a lot of growth opportunities in those segments.

There are only so many large fleets out there and we have them all covered, so there’s not a lot of growth opportunities for us in that segment right now.

TN: On the engine side, you’ve had some time to evaluate the performance of your EPA07 engines in the real-world. How are they performing?

Siler: Overall, very well. The fuel economy degradation, by Detroit Diesel’s estimates, have been pretty much non-existent: about minus one per cent to one per cent. So there’s really been almost a negligible change. There were some spotted issues of ultra low-sulfur diesel (ULSD) availability, but that’s been pretty limited. That disaster that many thought would happen, never really occurred.

As far as regeneration intervals and the aftertreatment devices, there have been no major problems there at all.

TN: As we look ahead to 2010, there’s some divisiveness in the industry between those engine manufacturers opting for enhanced EGR and those, like yourselves, that are going with Selective Catalytic Reduction (SCR). What message

Siler:The message would be:SCR is absolutely a proven technology, there’s really no debate there. Everyone we have dealt with in Europe and everyone we’ve interviewed in the North American market all understand the performance advantages are there. The biggest question is urea infrastructure and how to handle urea.

Urea is not a toxic substance, it’s not a dangerous material. We’re already starting to work closely with not only our dealer network, but also truck stop chains so there is infrastructure in place. What we would ask our customers to do is, when they’re negotiating fuel contracts and discussing fuel options for the future, they need to be asking questions of their truck stop. ‘Do you plan on having urea available and if not, why not? Because I plan on using an SCR engine because it’s going to get me better fuel economy and a quick payback.’

Those are some of the things we need to have our customers starting to do. We want truck stops to have bulk pumping stations and that is where the investment starts to climb pretty rapidly, but if they see a chance to make money on it, they’re going to do it. And we intend to show them how quickly they can pay that back. We plan on building a lot of engines with SCR starting in 2010.

TN: What about the claim that SCR increases CO2 emissions?

Siler:
That’s a great question, I know we’ve done a lot of research on that. CO2 emissions are reduced drastically through the use of SCR. A small amount of CO2 happens to be created during urea synthesis, but by more than a factor of 20:1 this same amount is saved because of less diesel fuel being consumed.

CO2 is created from the combustion of diesel fuel, and if you’re going to combust 3-5% less diesel fuel, then you’re going to create that much less CO2.

TN: Have you tested SCR in cold climates, such as Canada?

Siler: Yes, we have tested it in Northern Canada. The urea would freeze, but it takes very little time to thaw it.

Hofmann:We have a heating element in the urea tank. With the start of the engine, it starts heating the urea and in a quick time liquifies it.

Siler: The bulk storage tanks at the truck stops obviously wouldn’t freeze if they’re below ground.

But if they’re above ground, there are electric heating grids on the outside of the tanks to keep them from reaching that 12 F freezing point.

When it gets really hot, some of the ammonia separates out, but it doesn’t go into the atmosphere and it can be recirculated back into the fluid. It’s not nearly as troublesome as some would have you believe.