Sustainable Shipping and EPA’s Truck Mileage Standards
Last week, as I sat in traffic heading to the beach, I looked up at Interstate 95 to see an endless line of huge trucks gridlocked and waiting their turn to squeeze onto the George Washington Bridge. The road looked like a five-mile long freight train of colorful containers all heading west to the Promised Land. Later in the weekend, I read Aaron M. Kessler and Coral Davenport’s New York Times story on the Obama Administration’s effort to improve the gas mileage of the same huge trucks I had seen in the distance. These trucks are vital to our economy and ship nearly all of the items we rely on for our daily routines. According to Kessler and Davenport:
“This week, the E.P.A. is expected to propose regulations to cut greenhouse gas emissions from heavy-duty trucks, requiring that their fuel economy increase up to 40 percent by 2027, compared with levels in 2010, according to people briefed on the proposal. A tractor-trailer now averages five to six miles a gallon of diesel. The new regulations would seek to raise that average to as much as nine miles a gallon. A truck’s emissions can vary greatly, depending on how much it is carrying.”
While there are opponents to these new fuel efficiency standards, the opposition is not universal. As the Times story notes, the fuel efficient trucks will cost $12,000-$14,000 more than today’s less efficient trucks, but given the amount of gas used by these vehicles and the amount of ground they cover, that cost will be recovered in less than two years. Once the costs are recovered, the financial benefits of improved gas mileage can go to either the bottom line or to lower shipping rates.
As the global economy grows, production becomes increasingly specialized. Inexpensive communication and information, the technology of bar codes, containerized shipping, automated ports and terminals, satellite communication, smartphones and portable computing has made it possible to manufacture goods from components made in dozens, if not hundreds, of places and assembled in yet another place. The huge vertically integrated companies and large factory complexes of the 20th century have been replaced by the networked organization of the 21st. This enables more specialized and efficient production because the cost of shipping is low enough to be easily covered by the reduced costs of production. Shipping of finished products is also increasing as population and consumption increases.
Freight transportation is continuing to increase rapidly and about 70% of all freight in the U.S. is transported by truck. America’s settlement pattern, encouraged and serviced by the interstate highway system, is matched by its system of delivering goods to our stores and (due to e-commerce) increasingly to our homes. Europe, with a different settlement pattern, geography and transport system, relies on a system of freight delivery that differs from ours. About 45 percent of its freight is shipped by water, 45 percent by truck and about 10 percent by train. Nevertheless, a key trend in European freight delivery is the growing use of trucks. Back in 1970, 43 percent of the freight in Europe was moved via water, only 35 percent of the freight was carried by truck, and train shipped 22 percent of the goods. European train freight, which declined from 22 percent to 10 percent, is being replaced by truck freight.
Rapidly developing economies like India and China are in the process of rapidly expanding their freight delivery systems, as are the economies in other parts of the world. The decentralization of production makes truck transportation cost-effective and less reliant on centralized facilities such as ports and freight terminals. In other words, we should expect to see a world with many more trucks in the future than the number we have today.
The growing use of trucks to transport freight poses significant technological challenges in the effort to move from fossil fuels to renewable energy. Air transport presents similar challenges. While we have the technology to build an electric car and power it with renewable energy, the scale and weight of truck, ship and air transport provide a deeper challenge to efforts to replace fossil fuels with renewable energy. Fuels based on grains hold some promise, but in general there has been less focus on renewable large vehicle transport than renewable personal transportation. We are far from having the technology needed to shift off of fossil fuel-based trucks, ships and jets.
The Times story reminded me of the complexity of our economy and the infrastructure that supports it. Trucks use non-renewable energy, pollute the air, and contribute to climate change. They also cause congestion when they compete with autos for road space. Their weight can damage our already deteriorating bridge and highway infrastructure and their total costs are not always included in the taxes and user fees that they now pay.
Despite these issues, there is no turning back from this system of production, transport and delivery. The global economy has a life and logic of its own. Like a gravity-fed water system, it all flows downhill. Its momentum is irresistible because we all benefit from its efficiency and its effectiveness. The people who work on the logistics of shipping are constantly searching for cheaper, faster and more reliable methods of transportation. Arguably, shipping is one of the most competitive and complex businesses in the world. Each jurisdiction has its own rules and fees and the threat of terrorism has created inspections and bottlenecks at many national points of entry.
Technology is being developed to deal with these threats, delays and complexity. The growing interconnectedness of the world economy virtually assures that these problems will be brought under control in order to facilitate the increased flow of goods and raw materials throughout the world. If sustainability advocates attempt to prevent these trends, they will find themselves on the wrong side of economic history. Instead, an effort must be made to make the shipping system as efficient as possible and work to reduce its inevitable impact on ecosystems and environmental quality.
Improving fuel efficiency in trucks is a good example of such an enlightened policy. We need to motivate scientists, engineers and corporations to add energy efficiency to the design parameters for new trucks. When this was done with household appliances, such as refrigerators and air conditioners, we were able to generate dramatic improvements in energy efficiency. For example, trucks generate enormous amounts of heat; perhaps there is some way to utilize that energy instead of venting it. Since fuel is a major cost element in the shipping business, there is plenty of motivation to develop trucks that require less of it to deliver the same amount of goods.
We can also use congestion fees to rationalize the use of roadways and other taxes to pay the full cost of highway maintenance and construction. We can pay serious attention to the environmental impacts of new shipping facilities of every type. Transportation should be steered away from fragile and critical ecological resources. An enlightened and sustainable system of freight transport requires an active and forward-looking government. The U.S. national government has a critical role to play. This will require research, regulation, and creative use of taxation. President Obama’s action last week indicates that he is aware of the need to act. If he is replaced in 2017 by the same type of anti-government leadership we have in congress today, the U.S. will fall even further behind in our efforts to understand and sustainably participate in the growing global economy.