The New Challenges Facing Trucking Companies in California – The Demand for Retrofit

DP filter+peterbilt_model_389_truck+front_viewThe new Diesel Emissions Standards – This has got to be one of the toughest regulations impacting the trucking industry! A required retrofit that can cost a Trucking Company anywhere from $15,000 – $20,000 is not cheap. With California being the first State to adopt the new regulation and the State that has the largest amount of Trucks on its roads, this will not be easy to swallow for a lot of truckers.

 

Being an owner of a Trucking company is not easy when you have to weight:

  • The Cost of the Truck & Trailer                   [Average $50,000 – $300,000 per purchase]

  • Expensive Maintenance & Repairs              [Average $1000 – $7000 per month]

  • Raising Gas prices                                           [Average $5000 – $1000 per month]

  • High competition cutting into the profits of truckers (sometimes broker fee’s)         [per load]

  • Expensive Workers Compensation Insurance

  • Not to forget the long hours operating the machine

  • AND NOW: Required Retrofit                      [Aveage $15,000 – $20,000 per truck]

Is This Retrofit Good For Us?

Pros:

Upgrade Equipment:        Many trucking companies are using this new regulation to their advantage by upgrading their inventory, and in result:

    • Possible better Diesel Mileage,

    • Enhance companies reliability

    • Less Maintenance is required on newer vehicles

    • No Retrofit required on most equipment 2009 and newer

    • Better comfort

Improve Human Health:    

According to medical research, diesel soot is among the most harmful pollutants, as it can lodge deep in human lungs, can penetrate walls of blood vessels, and contains more than 40 cancel causing chemicals. According to Clean Air task Force, in 2010 there were 21,000 premature deaths, 3,000 lung cancer deaths, 410,000 asthma attacks.

Decrease Health Care Costs:       

The California Air Resources Board estimates that the regulation would cost $5.5 billion but would save at least $48 billion in reduced health care costs and increased productivity.

Programs Available to help you Junk that truck for Cash (depending on year and mileage)

 

Cons:

Expensive Retrofit Required for older trucks:        

To California that means A LOT of money because CA has the largest market share than any other state at 11.6% (www.ibisworld.com).

Damage to Vehicle Performance & Lifespan:

I have heard from a few of my clients whom are in trucking say the retrofit will create some damage:

  • Damages the Clutch

  • Can stop the engine

  • Causes wear & tear on the engine of the vehicle making it more expensive to maintenance & repair.

  • For Truckers who do not comply, the penalty can be up to $11,000 + the cost to fix.

 Luckily, I have been able to make a huge positive impact on the trucking industry being that I am in my current profession: a Business Banker. I have been helping a lot of my existing & new clients with financing new or used equipment, and for some, financing the part with a unsecured business loan. Unfortunately, the regulation is now in play, so time is limited for an industry that is continuing to grow.

 

If you are impacted by the new regulation and need some help, I can serve as great resource to your business, so don’t hesitate to contact me. I have also shared some links below if you want to expand your knowledge about the topic.

 

I wish you continued success,

Mohammad Salem

Business Banker, Business Coach & Consultant

inspiringsuccess@outlook.com

Office: (951) 723-1449

mohammad.salem@wellsfargo.com

Connect With Me On Linkedin

 

Sources:

AIR QUALITY by The Department of Transportation CA:

CCR: The regulation is in the California Code of Regulations (CCR), Title 17, Division 3, Chapter 1, SubChapter 10, Article 4, Subarticle 1, Sections 95300-95311

Air Resources Board ca.gov

California Diesel Risk Reduction Program

Statistics & Information On Air Pollution Caused by Diesel:

http://www.catf.us/diesel/

http://www.arb.ca.gov/diesel/mobile.htm

More Links:

http://forcechange.com/1141/california-passes-toughest-diesel-emissions-standards-in-us/

http://forcechange.com/1118/first-in-nation-proposal-in-ca-to-drastically-curb-diesel-emissions/

 

 

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