Clean Air: Who Pays?
Costs need to be passed on where they belong: the American public.
DEBORAH WHISTLER
EDITOR
One thing that is as clear as the air will hopefully be with the new EPA engines: Conforming to this mandate is going to cost truckers dearly.
One other thing clear as a crystal in this engine fiasco: truckers need to unite if this industry is going to be able to afford the dictates of government — and supposed mandate of the American people.
Meeting the requirements of the stepped-up Clean Air Act will add enormous costs to the manufacture of heavy trucks and engines.
Many of those costs will be passed on to you, the fleet operator. And the increase is going to be higher than anyone predicted earlier.
Talk about sticker shock: The price of a new truck after October 2002 will most likely rise between $9,000 and $15,000, as our story on page 32 points out.
Now, before you run screaming to your truck manufacturer demanding a discount, think.
How much longer can this industry be expected to to absorb all the costs of government compliance?
Truck and component builders have improved their products impressively for decades, but the price to the end user has increased very little, especially in relation to other types of vehicles.
Consider this: A Corvette Coupe in 2002 costs $41,450 — up 127% from 1982. Yet the price of a 2002 Kenworth has increased only about 37% since 1982. Clearly, the cost of highway trucks has hardly kept pace with inflation.
But just because the cost of a Class 8 tractor hasn't increased much in the past 20 years, doesn't mean those vehicles don't cost a whole lot more to build.
Truck makers have had to comply with a myriad of safety and emission mandates in the past two decades, while improving durability, longevity, performance and ride — all without jacking the prices through the roof.
Trucking companies, too, have continually absorbed the high costs of regulatory compliance while improving safety, service and productivity. But the prices they charge for those services have remained stagnant. Why?
Gutsy carriers who have attempted to increase rates in any meaningful way are routinely sabotaged by their peers, who will haul the load at a loss to gain market share.
And the industry as a whole often has its head in the sand when it comes to dealing with difficult issues. It's the old ostrich approach to lobbying.
Here's a typical scenario:
The government makes a proposal that will have dire financial consequences for the industry.
A fragmented trucking lobby is unable to effectively block the plan. Then, when the nasty ramifications of the new regs finally hit, the various segments of the industry bash at each other to get financial relief. It's like a big game of kick the dog.
That's exactly what happened with this recent debacle. In 1998-99, when the first rumblings began about the crisis of meeting this emissions hurdle, there was no rally to the cause. It was somebody else's problem. Trucking associations felt they had bigger fish to fry; driver hours of service and meal deductibility were pressing issues.
When the time came for the industry to unite and try to reason with EPA, or take them to court to block the stepped-up emissions schedule, the engine and truck builders looked behind them and no one was there. EPA prevailed.
Now it's D-Day. Who will pay?
This isn't the first time trucking's been hit hard in the pocketbook to help improve safety on the highway and the quality of life to the benefit of the American public. It won't be the last.
But it's high time this industry became truly united and started passing these costs on where they must go, to the public. That will only happen with significant increases in freight rates.
As is evidenced by my Corvette example, John Q Public is willing to accept price increases for the things he holds dear. It's time for him to start paying the freight, literally, for truck service.
Let's kick the right dog this time.
