Tuesday, January 6, 2009

What is my return on investment?

Let's discuss why onboard technology can and does pay for itself - provided it's the right technology and it's managed. My first experience with obtaining an return on investment with onboard technology happened back in 1990 at a company in Dallas then known as Chemical Express Carriers. Using our early (and by today's standards antiquated) onboard computer system - we achieved a 12 month return on investment with our 550 trucks at 29 terminals.

The main payback is fuel economy. Even with electronically controlled engines, the driver is the difference.

"The driver is arguably the principal variable in fuel mileage. There is as much as a 35 percent different between the most proficient and least capable drivers" - The Fleet Manager's Guide to Fuel Economy, The Technology and Maintenance Council of the American Trucking Association.

How do you affect fuel economy? The average truck wastes 2196 gallons per year idling according to the Agronne National Lab. You can be assured that an idling truck engine burns a minimum 1 gallon per hour idle, without A/C or other engine load.

For every 1 MPH increase over 55 MPH, fuel consumption increases 2.2%. This means that 7.5 MPH at 55 MPH drops to 6.6 MPG at 65 MPH.

Rapid accelerations and decelerations. It's simple physics. You burn fuel getting that mass rolling - and then you scrub off that energy every time you hit the brakes.

Let's talk emissions. 10 MPH speed reduction reduces diesel engine NOX emissions by 18%. Idling by commercial trucks releases an estimated 10,000,000 tons of CO2, 50,000 tons of NOX, and 2,000 tons of particulates.

Fuel economy has a direct relation to vehicle wear. Increase in speed from 55 MPH to 65 MPH increases tire wear 5% to 16%, depending on weight. Increase in speed from 55 MPH to 65 MPH decreases miles to engine overhaul by 10% to 15%. Increase in speed from 55 MPH to 65 MPH increases oil consumption 15%. Idling for 6 hours = 42 miles of engine wear.

Will proper planning and execution of your dispatch and routing help your fleet utilization? An average of 42% of a fleet's operating costs is in vehicle depreciation. Intelligent routing and dispatching maximizes vehicle utilization and minimizes distance traveled.

You can find a simple, online fuel savings calculator at http://www.loadtrek.net/loadtrek_net/FuelEconomy.aspx.


This is an interesting subject. Let me know what you think.

1 comment:

JB said...

What about driver retention? It costs at least $3500 to recruit an experienced driver that needs no training.

I have found that younger drivers who do not have the industry experience tend to pick up electronic logs better than they do paper logs.