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The Time Is Now

Concerns about the economy this year may have supplanted concern about the environment in the minds of many but Volvo Group North America believes the time is right for rethinking our approach to tran...


Concerns about the economy this year may have supplanted concern about the environment in the minds of many but Volvo Group North America believes the time is right for rethinking our approach to transport efficiency and truck productivity.

A large part of the reason that environmental concerns seem that have slipped in priority since the global economic meltdown in the final quarter of 2008 is the perceived cost involved with thinking green. Companies fighting just to make payroll from week to week find it hard to justify expenditures they believe to have a much longer-term impact.

But Leif Johansson, president of AB Volvo and CEO of the Volvo Group, argued during a seminar on climate change policy hosted by Volvo in Boston recently, that when we think of environmental sustainability initiatives we often get it wrong, distorting our judgement calls in the process.

“We think it’s going to cost too much. Sustainability to me is reducing costs and having a more sustainable business,” Johansson told the large gathering of Volvo dealers and customers attending the event. And he wondered out loud if the industry is not making a mistake in promoting the new hybrid vehicles as “green” alternatives rather than as simply a more efficient way to operate.

In addition to Johansson, the seminar included presentations on sustainable transportation from Bill Graves, president and CEO of the American Trucking Associations, John Heywood, a professor of mechanical engineering and director of the Sloan Automotive Laboratory at the Massachusetts Institute of Technology, and Scott Kress, senior vice president, sales and marketing, for Volvo Trucks North America.

Buying into the need to move towards more sustainable transportation practices is one thing, actually figuring out what that entails is quite another, however, Heywood pointed out during the seminar.

“And unfortunately the challenge is harder than we think,” Heywood added.

Adding to the challenge for the trucking industry will be some pressing trends. It is currently estimated that the total amount of freight in the US will increase 26% by 2020 compared to 2006 (yes, the recession will eventually come to an end.). Under the current structure, that would require a similar increase in truck population to keep pace. The American Trucking Associations forecasts a 40% increase in the Class 8 truck population by 2018 compared to the 2000 population. And considering US surface transportation still largely functions on a transportation infrastructure built in the 1950s, that will only add to the current gridlock.

“We can’t base what we do today on what we did or thought yesterday. Things have changed and transportation has not moved as fast as everything else. We have a productivity gap. Infrastructure and equipment are not growing as fast as freight tonnage,” said Kress.

In what Volvo billed as a call to action for the US trucking industry and public policymakers, Kress said new thinking and new investments are needed so truck transportation can be efficient and cost-effective now and in the future.

Kress noted that statutory and regulatory limits on truck capacities haven’t changed in years. Population and economic growth lead to increased demand for freight transportation, yet infrastructure investment has not kept pace and hundreds of significant freight bottlenecks can be found across the US, which cost the overall economy tens of billions of dollars each year.

Kress challenged stakeholders to investigate the answers to several questions.

“Do different limits on trailer weight, size and permissible com- binations offer improved efficiency while reducing road congestion? What are the advantages to using longer combination vehicles (LCVs) and under what circumstances are the benefits the greatest?”

He noted that more productive trucks would consume (15-20%) less fuel, contributing to less demand for foreign oil while also reducing emissions, especially greenhouse gases such as CO2. In fact, according to Kress, they have a better safety record than the corresponding tractor/single trailer combination predominant in today’s freight hauling.

In recent years Volvo has also sought to examine the viability of moving away from diesel power towards alternative fuels that can meet the power needs of today’s heavy duty engines without contributing to the build up of greenhouse gases in the atmosphere the way that diesel does. One of the major advantages of the diesel engine is that it does not have to use conventional diesel fuel or other fossil-based fuels. Through the introduction of some sophisticated technology and minor modifications the diesel engine we’ve come to rely on can be adapted to run on a wide range of renewable fuels that emit no excess carbon dioxide in powering a vehicle.

Volvo is currently testing 7 different alternative fuel sources -biodiesel, synthetic diesel, dimethylether(DME), methanol/ethanol, biogas, biogas-biodiesel and hydrogen-biogas. It is comparing and contrasting the benefits and drawbacks of these seven alternative fuels in a variety of critical areas such as climate impact, energy efficiency, land use efficiency, fuel potential, vehicle adaptation, fuel cost and fuel infrastructure.

It has performed a great deal of ground breaking work, yet as Johansson acknowledged, the headway being made towards the production and distribution of renewable fuels on a major scale has so far proved disappointing.

There seems to be “lots of very good talk, very little investment,” he said.

Investment is also a major issue when it comes to updating the road infrastructure. But where will the money come from? Will the Obama administration make an honest attempt to fix the nation’s infrastructure problems? The best ATA’s Graves could do was “a maybe”.

“The problem is the Highway Trust Fund is broke and investment in infrastructure is not going to happen unless we pay more,” Graves said adding a fuel tax increase could support infrastructure investment but there appears to be no support for such among US politicians -Republican or Democrat.

“We get told not only ‘no’ but ‘hell no'”, Graves said.

Volvo’s goals in launching its more productive trucks initiative was to facilitate the dialogue around the use of more productive trucks and to change public policy on truck combinations. However Johansson pointed out that programs aimed at meaningfully transforming the transportation system could take 10 to 20 years to reach fruition.

“We need political direction that keeps that in mind,” he said. Johansson said when it comes to driving change, government can use either taxation or the dynamic of the market, through cap and trade programs. Although he is admittedly “very positive” on the theory of cap and trade programs, pointing out they had been used to good effect in combating acid rain and CFCs, he said he doesn’t favor one over the other.

(A cap and trade system is a market-driven mechanism that sets ceilings for carbon output and lets companies that come in under the limit sell credits to those that don’t, allowing them to keep on polluting -for a price. The long-term impact, however, is to reduce overall carbon and create an economic advantage for those companies willing to be greener than their competitors. That in turn drives investment and research dollars into renewable energy and efficiency.)

“Theoretically cap and trade, as is used in Europe, is most efficient. But it’s difficult for politicians to see how individual industries interact under the cap and trade bubble. That has meant it has been a very cautious enterprise. There is very little impact at the beginning and in a downturn the value of credits would go down.”

Johansson also challenged the industry to stop thinking of regulation and environmental controls as negative.

“It’s actually the other way around,” he reinforced. “Companies cannot be in contradiction to what society thinks is the right way to go.”

When challenged by one reporter that some people, particularly in the US, remain skeptical that global warming is a reality (or at least a man-made reality) Johansson said it’s important for science to keep digging for answers but added that the “laws of natural science are not a democratic issue. Science does not work that way. Most people used to think that the world was flat.”

The long timelines involved was also central to remarks made by Heywood from the Sloan Automotive Lab. He said the path forward must include finding ways to improve, conserve and transform energy use, and it’s critical that all three approaches be employed.

He said that in order to stave off the ruinous effects of global warming, current estimates are that by 2020 we need to be capable of levelling off our fuel consumption; by 2035 we need to have in place new technologies and fuels on a scale that can make a difference; and by 2050 we need to be at a point where we are making significant reductions in energy use.

“If we don’t start today with a sense of urgency we are going to run out of time,” Heywood cautioned before adding that “The opportunities are real. We shouldn’t get discouraged but we are going to have to work very hard.”


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