Trucks

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Trucks

INDUSTRIAL CODES

NAICS: 33-6120 Heavy Duty Truck Manufacturing

SIC: 3713 Truck and Bus Body Manufacturing

NAICS-Based Product Codes: 33-61201 through 33-61203104

PRODUCT OVERVIEW

A truck is, in the most basic sense of the word, any platform-like object on wheels. Trucks are motorized vehicles that are different from cars in that they are primarily designed for transporting objects. Trucks have been essential to local and international commerce, construction, agriculture, and many other aspects of daily life since they were manufactured more than a century ago. They also are the source of several problems threatening the quality of modern life. These problems include threats to the environment such as excessive carbon emissions contributing to global warming, gridlock on streets and highways, the rapid increase in truck traffic overwhelming an already inadequate transportation infrastructure, and a growing number of truck-related highway deaths.

This essay will examine the commercial trucking industry and its many contributions to the amenities of modern life, and the steps being taken or that should be taken to minimize the negative issues posed by our ever-increasing reliance on trucks and truck traffic.

While trucks belong to a variety of categories in terms of size and application, this essay focuses on medium- and heavy-duty trucks. These trucks comprise the bulk of commercial vehicles, buses, and recreational vehicles (typically built on medium- and heavy-truck platforms). Light trucks, which are typically used for personal transportation, pleasure, and convenience, as well as for lightweight commercial assignments, are not a part of heavy-duty truck manufacturing.

Commercial trucks carry much of the world's freight, (84.3 percent in terms of dollar value in the United States, for example), a figure that may increase to 87 percent by 2008. In terms of tonnage, trucks transport 5.46 billion tons of freight in the United States every year. Trucks are critical to today's enterprises, from commercial, retail, and industrial projects and programs to construction, land development, farming, logging and oil, and gas and mineral exploration. In the United States, trucks are the sole delivery method for goods and commodities to 70 percent of all communities.

According to the U.S. Census Bureau's Statistical Abstract of the United States: 2007, there were more than 112,600 trucking establishments in the United States in 2002, an increase of more than 2,000 such establishments since the turn of the century. Their annual revenues however, declined by more than $7 billion to $164.2 billion during that period, reflecting a slowdown in consumer spending coupled with rising fuel and insurance costs. Estimates for highway miles traveled by commercial trucks each year vary widely, from nearly 90 billion miles to 200 billion miles. The amount the industry pays in state and federal fees and taxes is estimated to be $21.4 billion per year. It is also estimated that approximately 15.5 million trucks (including 1.9 million tractor-trailers) are operating in the United States.

The classification of trucks used by different organizations vary slightly. This table provides the classifications used by five prominent players in this industry.
Weight Class Min. GVWR in pounds Max. GVWR in pounds VIUS Class 1EPA Class 2R.L. Polk Class 3J.D. Power Class 4Common Class 5
Abbreviations used: GVWR, gross vehicle weight rate; ALVW, adjusted loaded vehicle weight; LVW, loaded vehicle weight; Lt-Duty, light duty; Med-Duty, medium duty; Hvy-Duty, heavy duty; Lt-hvy, light heavy duty, and Hvy-hvy, heavy heavy duty.
  Data sources for each column:
1. VIUS stands for Vehicle Inventory and Use Survey, a product of the U.S. Department of Transportation (DOT).
2. Environmental Protection Agency—Lt-Duty 1, 0-3,750 lbs LVW; Lt-Duty 2, 3751-5,750 lbs LVW; Lt Duty 3, 0-5750 lbs ALVW; Lt-Duty 4, >5,750 lbs ALVW; Class 8a, 33,001-60,000 lbs GVWR; Class 8b, >60,000 lbs GVWR.
3. R.L. Polk is an automotive information and marketing firm.
4. J.D. Power is a marketing information services firm—The firm reports on medium- and heavy duty commercial vehicles (class 5-8). Pickups and commercial vans in Class 1 and 2 are rated as light-duty (under 6,000 lbs GVWR) or heavy-duty (6001-10,000 lbs GVWR).
5. General usage within the industry.
Class 16,000Lt-DutyLt-Duty 1-41C and 2Lt-Duty
Class 26,00110,000Lt-Duty2b Hvy-Duty2CLt-Duty
Class 310,00114,000Med-Duty33Lt-Duty
Class 414,00116,000Med-Duty44Med-Duty
Class 516,00119,500Med-Duty55Med-DutyMed-Duty
Class 619,50126,000Lt-hvy66Med-DutyMed-Duty
Class 726,00133,000Hvy-hvy77Med-DutyHvy-Duty
Class 833,001>33,001Hvy-hvy8a and 8b8Hvy-DutyHvy-Duty

Highway trucks are categorized by their gross vehicle weight. Whether a particular weight class is designated as light-, medium-, or heavy-duty tends to be decided arbitrarily by the company or agency assigning the classification. The basic official weight classifications are based on the U.S. Department of Transportation's Vehicle Inventory and Use Survey (VIUS). (Prior to 1997 the survey was called Truck Inventory and Use Survey—TIUS). Other agencies and organizations may sub-divide these classifications differently. J.D. Power and Associates, a marketing information service, places trucks in Classes 5, 6, and 7 in the medium-duty category while general usage within the industry defines medium-duty as classes 4, 5 and 6. Figure 215 shows various truck classifications by weight and definition.

The history and evolution of medium- and heavy-duty commercial trucks parallels that of passenger cars and other light vehicles in many respects. In fact, all of today's powered vehicles—cars, trucks, buses, recreational vehicles, etc.—trace their origins to the earliest self-propelled vehicles, notably the three-wheeled tricycle invented in 1769 by Frenchman Nicholas Joseph Cugnot. The first commercially viable vehicles did not appear until 1862 with the invention of the internal combustion engine by Etienne Lenoir of Belgium.

The first gasoline-powered vehicles were built by Germans Karl Benz and Gottlieb Daimler in 1885, two men who worked individually and never met. Daimler is credited with building the first truck in 1896, a "motorized goods vehicle, order no. 81, vehicle no. 42, four hp [horse-power] two-cylinder engine, weight of the complete vehicle: 1,200 kilograms (2,646 lbs.) for carrying a load of 1,500 kilograms (3,307 lbs.), invoiced to British Motor Syndicate Ltd. London," according to the production records of Daimler-Motoren-Gesellschaft (DMG) at its factory in Cannstatt near Stuttgart, Germany.

According to the Mercedes-Benz Truck Heritage Account on its company's Web site:

The world's first truck looked like a horse-drawn cart without a drawbar. The driver was seated on the coach-box ahead of the front axle, out in the open air. Hence the truck was a cab-over-engine unit.

The engine was installed in the rear—a Daimler 'Phoenix' two-cylinder engine which developed 4 hp from a displacement of 1.1 litres. Engine power was transmitted to the rear axle by a belt system, a design resembling that of the planetary hub reduction axles introduced decades later.

… Daimler supplied the truck in 4, 6, 8 and 10 hp versions, with payload capacity ratings between 1,500 and 5,000 kilograms (11,23 lbs.) and top speeds of up to 12 km/h (7.5 mph). However, Gottlieb Daimler and his collaborator Wilhelm Maybach were not content with the rear engine configuration. In the next models, the engine was installed in the frame underneath the driver's seat and the rear axle was driven by means of a chain. Power was conveyed by a gearwheel transmission, the engine was cooled by Wilhelm Maybach's tubular radiator and started by means of low-voltage magneto ignition. In the next generation, the engine was placed under a bonnet above the front axle—the conventional truck was born.

Benz also developed a truck-like four-wheel vehicle in 1895, and called it a combination delivery vehicle. Today the vehicle would be classified as a van. It consisted of a box body on the frame of Benz's Velo car and was capable of carrying 300 kilograms, including the driver. A single-cylinder engine with a displacement of 1,045 cubic centimeters (cc), and 2.75 horsepower (hp) provided its power. The following year the vehicle sported a 5 horsepower, single-cylinder engine with a displacement of 2,650 cc capable of carrying two people, and a 300-kg payload.

The Benz truck would be considered a light vehicle today. His contribution to the medium/heavy commercial vehicle industry was his development of the first bus in 1895. Commercial bus service began on March 18, 1895. An eight-passenger version of the Benz bus provided service along a 16.7-km route (10.4 miles) from Siegen to Netphen to Deuz, Germany, which the bus covered in less than one hour, according to the Mercedes-Benz history account. The bus made the trip four times per day. The entire trip cost 70 pfennigs (equal to $0.49).

The first truck company to open in the United States was the Rapid Motor Vehicle Company. Brothers Max and Morris Grabowski established the company in Detroit, Michigan, in 1902. In the previous year they designed and built a single-cylinder, chain-driven, gasoline-powered dray machine that in essence was a motorized version of a horse-drawn wagon. The name "Rapid" was chosen because the one-cylinder dray could tear along at almost 10 mph, a somewhat daunting experience for the driver who had to sit "up high and forward of the truck bed," according to Bob Hagin in History of GMC Truck. Rapid also built a factory in Pontiac, Michigan, which by 1906 was the world's largest manufacturer of trucks. The factory manufactured 200 trucks that year. Rapid trucks were large gas-powered machines designed to replace horse-drawn wagons.

Another successful Detroit automobile maker, the Reliance Motor Car Company, was founded in 1905, and was the producer of a five-seater tonneau. In 1907 the company switched production to trucks. At the same time, William C. Durant founded General Motors. Its line of vehicles included Buick, Oakland (predecessor of the Pontiac), and Oldsmobile. In 1909 Durant purchased Rapid and Reliance and incorporated them into General Motors, allowing him to complete his product line with trucks.

The remaining two members of the North American Big Three auto companies—Ford Motor Company and the Chrysler Corporation—joined the ranks of truck manufacturers early in the twentieth century. In 1900 Henry Ford built his third vehicle, a truck-like conveyance, although he did not introduce the Model-T One-Ton truck chassis until 1917. This chassis was the first ever specifically built for trucks. Ford introduced the first factory-assembled pickup in 1925 and in 1928 introduced the AA chassis, a heavy-duty truck-based version of the Model A. In 1932 the Model BB truck chassis and the Ford flathead V8 chassis were introduced. In 1948 the company began to use these chassis in the F-series, which included the F-8, a 3-ton medium-duty truck.

The Chrysler Corporation joined the truck manufacturing industry through its acquisition of the Dodge Brothers Company in 1928. John and Horace Dodge built their first truck, a one-half-ton Army panel van, during World War I. The van evolved into their first civilian commercial vehicle, the 1918 Screenside. The Screenside was a one-half-ton car. Six months later, Dodge Brothers developed a panel truck version of the same vehicle. In 1921 the Dodge Brothers Company and the Graham Brothers Company collaborated on the manufacture of a 1.5-ton truck.

The future of trucks as a primary means for hauling goods and materials cross-continent and internationally was demonstrated during World War I when they were used extensively to transport men and supplies for the war effort. The United States manufactured 227,250 trucks for this purpose. Many new trucking companies also were established during this era, including Michigan Motor Freight, Yellow Freight, and Interstate Motor Freight.

The World War I era also signaled the start of a nationwide highway-paving program to "get the farmer out of the mud," according to Assessing and Managing the Ecological Impacts of Paved Roads (2005), a publication of the National Academies Press. In 1914 there were fewer than 15,000 miles of paved roads in the United States compared to some 4 million miles by the year 2000. The program was the first of many that culminated in the interstate highway system. In 1956 the U.S. Congress enacted a plan for building and funding the National System of Interstate and Defense Highways, a 42,500-mile network of limited-access, four-lane divided highways. The system was designed with standard vertical and horizontal clearances to accommodate military vehicles, such as trucks bearing tanks.

Paved roads substantially helped the trucking industry to decrease the amount of time spent on travel. For example, in 1911 the Seattle Chamber of Commerce sent a truck from Seattle, Washington, to New York City, a 2,900-mile trip that took 31 days to complete. In 2000 the same trip could be made in less than 50 hours of actual driving time.

Several factors contributed to the rise of the trucking industry in the post-World War I era: the population shift from the cities to the suburbs, the lower cost of trucking compared to railways, the expansion of the paved transcontinental network of highways, and the increasing sophistication and capabilities of the commercial truck fleet.

MARKET

The U.S. medium- and heavy-truck market was reasonably strong between 1997 and 2005, with only three years of declining shipments. According to the Census Bureau, the value of heavy-truck shipments rose 78 percent during this period, from $14.5 billion to $25.1 billion. The increase in shipment value was in the double-digit range for each year over that of the previous year with the exceptions of 2000 (a decline of 12.3%), 2001 (a decline of 35.4%), and 2003 (a decline of 3.5%).

The global truck market stumbled in the early twenty-first century. By 2005, however, the market appeared to be headed for dynamic growth in most of the world, according to projections reported by Swedish truck and bus builder Scania AB. The truck markets in Asia and Africa were expected to grow by 43 percent each by 2015, in Europe by 35 percent, and in the Middle East and India by 25 percent each. The bus market was expected to grow more modestly except in the Middle East and India, where it was expected to double from 40,000 units to 80,000 units between 2005 and 2015. Bus sales in Europe were expected to grow 10 percent by 2015; in Africa, 14 percent; and in Asia, 21 percent.

The mature North American heavy-truck market is expected to grow by only 3.5 percent between 2005 and 2015, while the Latin American market will decline some six percent. Latin American bus production is also expected to decline slightly while bus sales in North America will grow by almost 25 percent. Both truck and bus markets in Australia will stagnate during this period, according to the Scania market model. A picture of the global truck market in 2005 is provided in Figure 216.

Truck ownership is no longer the only means by which people have access to trucks. In recent years, truck leasing has become a popular way in which to "own" a truck. Truck leasing has changed the ownership landscape in the North American market significantly. There are many reasons for leasing trucks and those reasons have changed over the years. "Truck leasing used to be all about meeting unexpected equipment needs for a relatively short time," according to an article by Wendy Leavitt, Director of Editorial Development for Fleet Owner magazine on its April 1, 2007 Web site. "Today it is a long-term business strategy, not a short-term tactic for an increasing number of fleets, and the typical full-service lease agreement involves much more than just equipment. The Truck Rental and Leasing Assn. (TRALA) estimates that 1,003,160 leased or rented vehicles are currently in operation, approximately 31 percent of them through full-service lease agreements."

Production and sales figures are unit counts based on all truck classes.
Regions and Selected Countries Production Sales
Africa 237,874354,582
       South Africa198,998197,538
       Egypt17,38620,431
Asia-Pacific 6,752,8125,818,859
       Australia79,939378,204
       China2,537,8692,364,932
       India349,194322,065
       Japan1,782,9241,121,412
       South Korea342,256229,012
       Malaysia158,837140,291
       Taiwan122,526126,187
       Thailand854,100531,037
Central & South America 776,364776,158
       Argentina136,816
       Brazil527,861
Europe 2,827,2633,019,281
       France434,883480,396
       Germany407,523272,776
       Italy312,824236,486
       Poland108,69847,286
       Russia284,674282,310
       Spain655,688429,995
       Sweden142,17141,807
       United Kingdom210,063385,969
Middle East 564,663710,472
       Iran104,00094,893
       Saudi Arabia107,172
       Turkey25,789295,461
North America 9,589,13011,155,510
       Canada1,257,7861,168,237
       Mexico639,003417,834
       United States7,692,3419,569,439
Total 20,748,10621,834,862

While truck leasing as a long-term business strategy did not gain much prominence until the twenty-first century, another factor influencing commercial truck owner-ship in North America has been a constant of the industry since its earliest days: the large number of owner-operators. Truck owner-operators are a mainstay of the trucking industry. Typically they are independent business people, most of whom own their own rigs and contract their services directly to companies that need goods hauled, or they subcontract to larger fleets in need of additional trucks and/or drivers. Of the estimated 3.3 million truck drivers in the United States, one in ten is an independent and most of these independents are owner-operators, according to Truckinfo.net, a trucking industry information broker and online portal.

Truck Builder Total Sales Percent of Total
(1) Includes Class 3 trucks.
Freightliner (Daimler)1125,04121.5
International (Navistar)115,18719.8
Ford100,43417.3
Peterbilt (PACCAR)43,6297.5
Kenworth (PACCAR)38,1316.6
Volvo30,7165.3
Mack29,5245.1
GMC23,3204.0
Sterling21,5583.7
Chevrolet18,0203.1
Isuzu115,7512.7
Hino6,2031.1
Mitsubishi Fuso16,0601.0
Western Star (Daimler)3,4630.6
Nissan Diesel12,7830.5
Other1,3790.2
Totals581,198

KEY PRODUCERS/MANUFACTURERS

Fifteen manufacturers account for virtually all of U.S. medium- and heavy-truck sales, including seven that build most of the largest trucks (Class 8 vehicles). There are myriad manufacturers worldwide although 15 stand out as the major international players and they are presented in Figure 217.

Freightliner, a DaimlerChrysler company, is the largest North American producer of medium- and heavy-duty commercial trucks. In addition to its Freightliner trucks and custom chassis for buses and motor homes, the company manufactures Sterling and Western Star trucks (which include off-road and severe-service trucks); Unimog, a German-built specialty truck for off-road, utility, and multi-tool implement applications; military trucks; Thomas Built Busses (school buses); and Detroit Diesel engines for medium- and heavy-duty highway trucks. It is also a leading exporter of medium- and heavy-duty trucks to markets such as Australia, Chile, New Zealand, and South Africa. Freightliner is developing business in Russia, the Middle East, and Asia.

PACCAR is the parent company of Kenworth Truck Company and Peterbilt Motors Company (which are important North American manufacturers of medium- and heavy-duty trucks), DAF Trucks, N.V., and Leyland Trucks Ltd. Kenworth trucks are sold throughout North America and Australia; Peterbilt trucks are sold in the United States and Canada; and DAF (headquartered in the Netherlands), builds trucks in the Netherlands, Belgium, and the United Kingdom and markets them throughout Europe. DAF exports to Asia, Africa, and North America. Leyland, one of Britain's leading manufacturers, builds DAF trucks at its assembly facility in northwest England, 40 percent of which are exported to European Community markets, Australia, South Africa, Mexico, and the United States. Foden, also a PACCAR company, manufactured a line of trucks sold in the United Kingdom and New Zealand until 2006 when the company folded. PACCAR continues to supply parts for Foden trucks.

International Trucks is part of Navistar International, a U.S.-based holding company whose individual units also include Mahindra International LLC (an Indian producer of commercial trucks and buses), IC Corporation (the world leader in school bus production), Workhorse Custom Chassis (manufacturer of Class A motor homes and step vans), Maxxforce International Diesel Power, and MVM International. MVM International, a manufacturer of engines, supplies engines to 39 countries on five continents. The company is the market leader in Brazil.

MATERIALS & SUPPLY CHAIN LOGISTICS

Materials used in the manufacture of heavy-duty commercial trucks in 2002 had a total delivered cost of nearly $12.67 billion, according to the U.S. Census Bureau's 2002 Economic Census. That was an increase of $2.55 billion over 1997, the previous year reported on in the Economic Census.

Truck manufacturing is a classic heavy industry. The movement of large quantities of heavy materials is an important part of the business and managing the logistics involved in this activity is an essential part of the success for any truck producer. According to the Census Bureau, heavy-truck manufacturers in the United States spent more than $1.7 billion for diesel engines and related parts in 2002. They spent $1.09 billion for drive-train parts and components; $208.7 million for suspension systems and components; $201 million for pneumatic tires and inner tubes; and $583.4 million for metal stampings, bearings, steel springs, hardware, metal fabrications and other metal components not including forgings and rough or unfinished castings.

Additional material costs in 2002 included $45.1 million for exhaust systems; $122.76 million for hydraulic systems, components and hydrostatic transmissions; $105.4 million for rubber and plastic hoses, belts, gaskets, and other fabrications; $75.2 million for seats, seat belts, and harnesses; $43.3 million for windows, mirrors and other glass products; $87.3 million for textiles for trim, panels, and headliners; $69.4 million for paints, varnishes, stains, lacquers and allied products; $46.3 million for lamps and lighting fixtures, including headlights, taillights, running lights, dome fixtures and bulbs and sealed beams; and $167.9 million for electrical parts, components and systems, including radios, speakers, wiring harnesses, batteries, instrument clusters, meters and gauges, semiconductors, electronic modules and other related devices.

In many ways the production processes used in making automobiles and light trucks are similar to those used in making medium- and heavy-duty commercial trucks but they differ greatly in one respect: commercial vehicles have customization requirements. Most automobile and light truck models are purchased more or less off-the-shelf with relatively limited choice in the selection of content, other than in entertainment systems, color, and trim levels.

Commercial truck buyers are more likely to specify a great deal of the content in a new vehicle, such as its weight rating, size, wheel base, brake system, wheels and tires, engine type—gasoline or diesel, and transmission size and type—manual or automatic. Diesel power has taken over the heavy-duty segment and dominates in medium-duty trucks. In 2006 more than 85 percent of all commercial trucks produced in the United States were diesel-powered.

Depending on the intended use of the vehicle, commercial truck buyers are also apt to specify the size and type of cabs and sleeper units, seats, and aerodynamic devices to reduce air resistance, if they opted for a classic truck design rather than a more aerodynamically styled vehicle.

DISTRIBUTION CHANNEL

Since the commercial trucking industry is devoted to delivering freight, this section will address not only the distribution channels for truck manufacturing, but will outline the nature of the truck freight distribution system, focusing on the North American industry.

Distribution of Trucks

New commercial trucks, like automobiles, are typically are sold through franchised independent dealerships. The American Truck Dealers (ATD), a division of the National Automobile Dealers Association (NADA), represents more than 2,000 franchised dealers with approximately 3,000 separate franchises, domestic and import. Used trucks are sold by independent dealers as well as by new truck franchised dealerships. New trucks and trailers are delivered via the highway system, with one truck piggybacking another to dealership locations. Railroads typically are used for cross-continent deliveries. Trailers are delivered in much the same way, although more than one may be piggybacked at a time.

Distribution by Trucks

In the case of truck-based distribution systems, non-local truck delivery service to the North American market is categorized by the size of the shipment (truckload—TL, or less-than-truckload—LTL), the type of goods being hauled, the trucker's market (regional or national), and the availability of the trucker's services to shippers. TL shipments typically weigh 10,000 pounds or more, and constitute approximately 80 percent of all intercity freight.

While TL shipments are typically direct hauls from the shipper to the destination, LTL shipments may involve five phases: pick-up, sorting at a distribution terminal or transfer hub, line haul (the main and longest leg of the shipment), sorting at a destination facility, and final delivery. Consequently, LTL carriers must include a large sales force, install expensive technology, and maintain hundreds of distribution terminals.

Expediting services are filling a growing niche in the truck-based distribution network. The industry began as an "ambulance service for time-critical freight shipments falling outside of normal delivery schedules, but has evolved into a strategic tool," according to David Bieder-man in a 2006 report for The Journal of Commerce. (Bie-derman was quoting Andrew Clarke, chief executive of Seville, Ohio-based Panther Expedited Services). In 2005 expediting revenues were approximately $3.4 billion, a small percentage of the trucking market but growing.

One significant advance in freight hauling occurred in 1990 when truckers began to forge alliances with railroads. J.B. Hunt Transport Services and Schneider National, for example, formed alliances with Conrail, Norfolk Southern, Southern Pacific, Union Pacific, and Burlington Northern. These intermodal alliances provided shippers with the speed and flexibility of trucks at the low cost of rail service. To facilitate this new shipping method, truckers began to use equipment that accommodated intermodal containers that could be used with rail or maritime freight carriers and trucks. This shipping strategy has become a common shipping method (although more prevalent in some modes than in others)—90 percent of ocean shipping, for example, is by container. The percentage of general freight miles transported using intermodal methods increased from one percent in 1970 to 15 percent in 1991. A U.S. Bureau of Transportation Statistics study of U.S. freight activity for the years 1993, 1997, and 2002 showed that multiple modes of shipping combining truck and rail declined nearly 16 percent from 1993 to 2002 ($83.1 billion to $69.9 billion) while shipments by truck and water increased nearly 53 percent ($9.4 billion to $14.4 billion).

KEY USERS

Trucks are among the tools essential to transportation needs in many industries and businesses. They are used to deliver materials and supplies, to aid in the production process itself, and to deliver the finished product to the marketplace. Trucks are also used to provide the platform on which tools are mounted for a number of purposes, including plowing, towing and wrecker service, fire fighting, laying cable, soil testing, and seismology testing.

ADJACENT MARKETS

In addition to heavy trucks and buses, transportation equipment includes a wide variety of powered vehicles, from golf carts to heavy-duty construction equipment, motor scooters, motorcycles, cars, light trucks, commercial vans, and recreational vehicles. While trucks and buses are the dominant commercial carriers of freight and passengers in the United States, air transportation, water transportation, railroads, and pipelines are additional types of freight transportation.

According to the Census Bureau, trucks move more freight in the United States than does any other mode of transportation. The Census Bureau also reported that trucking activity accounted for total revenues of $174.9 billion in 2004. This total was broken down into general freight moved locally ($58.9 billion) and general freight moved long distances ($116 billion).

Railroads moved the second-largest quantity of freight in the United States. The eight major railroads comprise what is known as Class 1 Railroads. In 2005 Class 1 railroad revenues in the United States totaled $46.7 billion. The next two modes of freight transportation are via waterways and air. Pipelines are a mode of transporting liquids over long distances as well. In 2002 trucks moved 7.8billion tons of freight, followed by railways (1.9 billion tons), pipelines (684 million tons), waterways (681 million tons), and airways (3.8 million tons). In all, these five means of freight transportation accounted for 11 billion tons of freight moved in the United States in 2002.

Mass transit and ground transportation operations in the United States reported revenues of $18.8 billion in 2002, according to the Census Bureau. Urban transit systems accounted for $2.8 billion, followed by interurban and rural bus transportation ($1.5 billion), school and employee bus transportation ($5.9 billion), and charter bus transportation (approximately $1.8 billion).

Mass transit usage in the United States has not grown much over the years. Just over 4 percent of all workers use mass transit of some kind (bus, streetcar, subway, or elevated train) in their daily commute, based on data collected by the Bureau of Transportation Statistics. In 1989, 4.9 million workers (4.6% of all commuters) reached their jobs by mass transit every day. In 2001 5.6 million (4.7% of workers) used mass transit regularly. By 2005 the number declined to 5.4 million workers (4.4 % of all those commuting to work).

In one sense, the growing trend of working from home, made possible by the computer and the Internet, is a way of avoiding transportation—at least to the place of work. Surveys by the U.S. Department of Transportation (DOT) reflect this phenomenon and show that it is growing. Approximately 2.7 million people worked at home in 1989 (2.6% of all workers). The numbers have steadily increased, if slowly, to 3.4 million in 2001 (2.8%) and 4.1 million in 2005 (3.4%).

Adjacent markets for long-distance travel are airlines, bus companies, trains, and ships. The DOT surveys demonstrate that the automobile is the dominant form of transportation. Use of personal vehicles accounted for 89 percent of all trips in 2001. Air transportation accounted for 7.4 percent; bus transportation, 2.1 percent; train transportation, 0.8 percent; and ship, boat, or ferry transportation, 0.1 percent. The DOT did not classify the remainder.

Modes of transportation ranked by mileage (the DOT uses the term personal-miles traveled in its studies of transportation) in 2001 showed that transportation in personal vehicles accounted for 55.9 percent of miles, followed by air travel (41%), bus travel (2%), train travel (0.8%), and water-borne travel (0.3%).

RESEARCH & DEVELOPMENT

One important development in the manufacturing of cars and trucks was the invention of the pneumatic air-inflated tire. Although the inflatable tire had been around since 1888 when John Dunlop invented it for use on bicycles, it was not used on cars and trucks until after World War I, according to "Trucking History" in The Truckers Place/Class A Truckstop, a Web site for the trucking industry. By 1920 this new tire had become extremely popular. The tire, which replaced solid rubber, caused much less wear-and-tear on vehicles, allowed for travel at much higher highway speeds, and made travel much more comfortable and less stressful for the driver.

Two other developments of that era helped to fuel the popularity and increase the utility of commercial trucks for short- and long-distance hauling: the invention of the fifth wheel, which improved the performance of semi-trailer truck rigs, and the application of diesel engines that held the promise of fuel economy, durability, and tremendous power delivered at much lower revolutions per minute (rpm) than did their gasoline counterparts.

The fifth wheel is a large disc located on a horizontal platform over the rear wheels on the rear of the truck tractor unit. A matching plate with a locking pin located on the front of the trailer locks into the fifth wheel, which supports the trailer and secures the trailer to the tractor. This meant a single truck tractor could be mated to a variety of trailers—flat beds, fully enclosed carriers, tankers, refrigeration units, etc.—and fully loaded trailers could be delivered to a shipping terminal and left there to be unloaded later, freeing the tractor for other assignments. Early trailers started at 33 feet in length and gradually increased in length through the years. The maximum length of a trailer in the United States is 53 feet long and 8.5 feet wide. In Europe semi-trailer rig lengths are based on the total length of the vehicle and range up to 25.25 meters (82.84 feet). Australia, with its wide-open spaces, has articulated trucks or road trains with lengths of up to 53.5 meters (175.5 feet).

As is the case with most transportation equipment in the early twenty-first century, an important area of research and development in trucks is the improvement of fuel consumption and efficiency. The costs of petroleum and gas were volatile throughout the early 2000s and are expected to continue to be so through 2010.

Like the first cars and trucks, the diesel engine originated in Germany. In 1892 Rudolph Diesel filed a patent with the German Imperial Patent Office for a "Working Method and Design for Combustion Engines … a new efficient thermal engine." In the following year he built a working model of the engine, and by 1897, introduced "the first diesel engine suitable for practical use, which operated at an 'unbelievable efficiency of 75 percent'," according to "A History of the Diesel Engine," on the Web site of the Yokayo Biofuels organization. At the 1898 Exhibition Fair in Paris, France, a demonstration model of the engine was operated. The engine was fueled by peanut oil, the original biodiesel, according to the Yokayo account. In fact, until the late 1920s vegetable oil was the primary fuel for diesels. It later was supplanted by petroleum-based fuel. Today, biofuel is considered a potential means of weaning the world away from its dependence on petroleum products.

Early diesel engines were too large and heavy for anything but stationary use because of the size of the fuel injection pump, so they primarily were used by industry and for ships and submarines (they were used with deadly efficiency during World War I to power German U-boats). The diesel engine was made compact in the 1920s with the invention of a new fuel injection pump design that eliminated the need for pressurized air and its accompanying tank. By 1923–1924, trucks were being equipped with the new smaller engines. By the end of the 1920s diesel-powered trucks had become common throughout Europe. By the 1950s diesel engines had virtually replaced gasoline engines in commercial trucks.

In the United States, Clessie L. Cummins, a self-taught mechanic and inventor who was convinced of the potential diesel engines offered the automotive industry, obtained manufacturing rights from a Dutch diesel licensor company named Hvid. In 1919 Cummins introduced a 6—hp, four-cycle stationary engine, but he was dissatisfied with the technology. Subsequently, Cummins collaborated with H.L. Knudsen (a former Hvid engineer), and introduced an engine that included an innovative single-disk fuel system. Cummins was a creative promoter of this engine and was determined to popularize the diesel as an automotive power, so he developed the diesel-powered Duesenberg. The Duesenberg set a speed record at Daytona Beach, Florida, circa 1930. Cummins also developed a diesel-powered truck which he drove coast-to-coast on $11.22 worth of fuel. Then in 1931, a Cummins team set a new endurance record—13,535 miles—at the Indianapolis Motor Speedway.

This combination of demonstrated economy and durability impressed some truckers and fleet operators who began using Cummins engines. This gave the fledgling Cummins Engine Company a market base that it expanded in 1933 with the introduction of a more advanced, reliable engine, the Model H. This engine marked the beginning of Cummins' most successful line of engines. The company earned its first profit in 1937 and in 1940 offered the industry's first 100,000-mile warranty.

The 1950s was a period of dynamic growth for diesel power in Europe with the introduction of direct-injection fuel technology and turbocharging, both of which improved the engine's response time and power, and helped to minimize its less desirable qualities—noise and dirty emissions. Swedish truck builder Volvo, a leader in medium- and heavy-truck production, was a pioneer in turbocharging. These improvements, which enabled cleaner, more powerful engines, led to the heavier and longer truck-trailer combinations seen on the highways of the world today.

Acceptance of diesel power was much slower in the U.S. trucking community, although heavy trucks were increasingly diesel powered by the 1950s in response to the need for economy, power, reliability, and durability for cross-continental hauling. Acceptance of diesel power in smaller commercial vehicles was even slower, although by 1970 diesels were common in most commercial truck classes. By 2006 diesel engines accounted for 85.7 percent of all new commercial vehicle registrations.

Other significant R&D efforts by the trucking industry have included advances in alternative powertrains, cleaner burning low-sulfur fuels and biofuels—although in the case of biofuels it is more a matter of déjàvu since the diesel was originally developed because of its potential to avoid the use of fossil fuels. As with the automobile, much of the focus has been in improving the safety, economy, and environmental compatibility of the truck. However, while the broad goals in these areas are similar, the emphasis is somewhat different for trucks. Gains are directly reflected in the bottom line—a mile-per-gallon improvement in fuel economy, for example, can lead to huge cost savings, especially with the soaring cost of fuel and the millions of miles traveled by commercial vehicles each year.

More aerodynamic designs to improve fuel economy, for example, can lead to huge fuel savings for the industry. This was demonstrated in "A Multi-Year Program Plan for the Aerodynamic Design of Heavy Vehicles," a 1998 joint study by Lawrence Livermore National Laboratory, Sandia National Laboratories, the University of Southern California, California Institute of Technology, and the NASA Ames Research Center. The study notes that "reducing the drag coefficient from 0.6 to 0.3 for a typical Class 8 tractor-trailer would result in a total yearly savings of 3 billion gallons of diesel fuel for travel at a present day speed of 60 miles per hour. The mileage improvement is from 6.1 miles per gallon to 8.8 miles per gallon—a 43% savings."

Other efforts to improve the fuel economy of and reduce emissions from commercial trucks have included weight reduction through the use of lighter-weight materials and hybrid powertrain technologies. As noted in the report "Technology Options 2005," published by the U.S. Climate Change Technology Program:

Vehicle efficiency could be increased by as much as 50%, if all current research areas such as a new generation of ultra-high-efficiency diesel engines (using advanced emission-control technology) and reduced aerodynamic drag, rolling resistance, and parasitic power losses are successful. Development and commercialization of trucks with high efficiency will significantly reduce transportation oil use, emissions (including CO2) and related costs to the economy. Increased use of lightweight materials will contribute to these goals. Hybrid propulsion systems have the potential to double fuel economy of heavy-duty vehicles, such as buses or delivery vehicles, over urban driving cycles.

Research areas cited in the report included four-stroke direct injection diesel engines with high peak-cylinder pressures, thermal barrier coatings, high-pressure fuel injection systems and turbocharging, and hybrid power-trains with regenerative braking.

Hybrids have been a major research subject by virtually all of the major manufacturers for use in both cars and trucks. Hybrids typically function by means of an electric motor mated to an internal combustion engine. Designers accomplish this mating in any of three ways: strictly as part of a generating system to charge the batteries; as an auxiliary to the electric motor providing extra power when needed, as well as for recharging the batteries; or as the main motive force while the batteries are used to power all other systems in the vehicle, reducing demands on the internal combustion engine.

In the future, fuel cells may play a role in heavy-truck powertrains, starting with auxiliary power units and potentially employed as part of a hybrid system. At present, fuel cells are gaining favor as a likely power source for intra-city buses. A fuel cell can best be defined as an electrochemical device that uses a combination of hydrogen and oxygen to produce electricity. The byproducts of this interaction are water and heat, making it a very clean, quiet, and efficient device, at least twice as efficient as burning fossil fuels. Fuel cell vehicles (FCVs) are propelled by electric motors, but unlike battery-electric vehicles that use stored electric energy, FCVs create their own. They can be fueled by pure hydrogen gas stored onboard in high-pressure tanks or by hydrogen-rich fuels such as methanol, natural gas, or gasoline which are converted by an onboard device called a reformer, according to the U.S. Department of Energy (DOE).

CURRENT TRENDS

While the trucking industry has never been known as a high-technology leader, it has adopted a number of sophisticated electronic tools to streamline many of its operations. Those that are having a major impact on the commercial trucking industry include vehicle- and freight-tracking systems and information storage and interchange systems, both of which provide increased productivity and faster response to customers. Tracking technologies use sophisticated computer systems and satellites to provide precise locations of fleet trucks. Bar coding and portable bar-code scanners are additional technologies increasing the speed and accuracy of data tracking and processing by permitting truckers to capture data automatically and enter it into the carrier's computer system for analysis. These advanced electronic data interchange systems (EDI) allow carriers to better track fuel taxes and fuel management performance; aid in navigation; record arrivals, departures and fuel consumption; monitor vehicle speed and engine conditions; and send and receive messages.

Trends seen in truck design and development include the use of radar early warning systems that alert drivers when they are approaching another vehicle too quickly. Cab-mounted computers that enable dispatchers to monitor the status of the driver and vehicle to reduce accident potential are being seen in more commercial vehicles. Other electronic devices that are being seen more commonly in commercial trucks include electronic systems for registering automatic payment of tolls without requiring a stop; systems for automatically monitoring freight and engine temperatures and for setting temperature levels in refrigerated vehicles; and diagnostic and prognostic software that allow computers to predict component failure based on engine performance trends.

Laser image-processing and optical character recognition technologies also are being used to speed paperwork processing; driver-training simulators are being developed using aerospace industry designs, as well as shipment planner software to reduce deadhead (empty trailer) miles; and fax- and voice-response systems that provide shippers with constantly updated rate quotes, transit times and locations of in-transit shipments.

Perhaps the most important trend affecting the trucking industry in the twenty-first century is the increasing reliance on trucks for the local and cross-country transportation of produce and other perishable merchandise. This trend has been accompanied by a number of challenges: "traffic congestion, transportation system deficiencies, safety, infrastructure deterioration, inter-modal connections, environmental impacts, quality of life, economic development and losses in productivity," according to Strategies for Managing Increasing Truck Traffic, a report published by the National Cooperative Highway Research Program of the Transportation Research Board of the National Academies. The research was sponsored by the American Association of State Highway and Transportation Officials in Cooperation with the Federal Highway Administration in 2003. "Since 1970, truck travel in the United States, as measured in vehicle miles of travel, has increased by 216 percent, whereas the population has increased only 33 percent and overall vehicle travel has increased by 137 percent. Meanwhile, highway system capacity (measured in land-miles of freeways and arterial roads) has increased by only 18 percent since 1980," according to the report.

The report noted that the most prevalent challenges facing the individual state Departments of Transportation are threefold: (1) congested urban highways; (2) insufficient quantities of truck parking, and (3) pavement deterioration.

Weight Class Axles Tires Vehicles Types
Class 1 .......................24Pick-up Van
Class 2 .......................24Step Van
Small Courier Van
Class 3 .......................26Metro Van
Small Tow Truck
Class 4 .......................26Flat Bed Truck
Class 5 .......................26Large Tow Truck
Stake Truck
Package Delivery Truck
Class 6 .......................36Single Unit Truck
Moving Van
Beverage Truck
Home Heating Oil Truck
Armored Car
Mini Bus
Class 7 .......................310Tractor/Trailer
Moving Van
Dump Truck
Transit Bus
Class 8 .......................3+10+Tractor/Trailer
Moving Van
Freight Truck
Ready-Mix Truck
Gravel Hauler
Articulated Bus
Greyhound Bus

To address these issues, which are not limited to the United States or North America, but are global in scope, concerned agencies and organizations are studying a number of potential remedies. Some remedies being studied are highway privatization, restricting trucks to dedicated traffic lanes, adding separate truck lanes to the highway infrastructure, widening traffic lanes to improve traffic flow, and using light rail systems for freight transportation.

TARGET MARKETS & SEGMENTATION

The commercial truck market can be broken down into a wide variety of segments based on a number of different criteria, notably the industries being served: tanker trucks for moving liquid and gaseous cargoes, for example, or refrigerated reefers for transporting perishable cargo. Truck manufacturers typically build the base truck—chassis, powertrain, wheels, and tires—then equip it according to buyer specifications: i.e., type of cab, semi-tractor, flat-bed, van body—or send the basic vehicle to the buyer or designated truck body builder who completes the assembly.

Market segments can be identified in a number of ways, the most obvious being by weight class, each of which can be further segmented by typical application. Figure 218 contains a description of the types of vehicles representative of each weight class.

RELATED ASSOCIATIONS & ORGANIZATIONS

American Truck Dealers, division of the National Automobile Dealers Association, http://www.nada.org

Owner-Operator Independent Drivers Association, http://www.ooida.com

Owner-Operator's Business Association of Canada—Association professionelle des routiers autonomes du Canada, http://www.obac.ca

Truck Renting and Leasing Association, http://www.trala.org

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