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Trucking Charrette
           Pre-Read   Rocky Mountain Institute
                      Transformational Trucking Project Manager:
                      Hiroko Kawai

                      Transformational Trucking Team:
                      Mike Simpson
                      Prateek Chourdia
Executive Summary: This Charrette will kick-start projects, accelerating the
adoption of new fuel-efficient technologies, infrastructure, and practices.
                                             This pre-read prepares Charrette participants by providing information about the event and research of the
                                             topic of doubling efficiency in the trucking industry. RMI defines trucking efficiency as the optimization of
                                             four elements: fuel economy, cargo capacity, operations, and infrastructure. In this document one will find
                                             an overview of RMI’s research, industry case-studies, and expert interviews; an overview of the charrette
                                             process and what to expect when you arrive; and an appendix of helpful industry facts to have as
                                             background information for participating in the charrette.
1. What is this Document?                    Transformational Trucking is an initiative to achieve doubled-efficiency in long-haul domestic freight
                                             transport. RMI has spent years surveying, modeling, and analyzing the market status and potential in the
                                             freight trucking industry—the second greatest user of petroleum products in the United States (consuming
                                             2.4 MMbbl/day in 2008). Transformational Trucking focuses on increasing the efficiency of the whole system
                                             of trucking in the most cost-effective way. This includes an understanding of:
                                               • hardware and platform improvement;
                                               • logistics and operations excellence;
                                               • policies and regulations; and
2. What is Transformational Trucking?          • business constraints and capital funding.
                                              Success of the Transformational Trucking initiative requires unconventional and creative collaboration
                                              across the trucking industry. This charrette brings together a diverse range of stakeholders capable of
                                              creating change together. Participants will alternate between structured activities in small breakout groups,
                                              lead by RMI facilitators, and plenary sessions for discussions amongst the entire group.
                                              Ultimately, after three days of working together, participants will generate collaborative project plans
                                              focused on solutions and strategies to improve the efficiency of vehicle platforms, powertrains, tractor-
                                              trailer configurations, hybridization, and electrification—with the goal of taking action that can break down
3. What is this Charrette?                    industry barriers and align policy intent with market realities.
                                       As of today, no one has found the “silver bullet” answer for fuel efficiency in trucking... and getting rid of
                                       trucking is not a viable solution. Many incremental solutions currently exist, but the diversity of industry
                                       applications, funding availability, and requirements creates a wide range in market adoption and the rate of
             ?                         implementation.
                                       RMI has shown through verified analysis that a whole-system integration of fuel efficiency improvements
                                       results in net benefits greater than the sum of the parts. Transformational trucking relies on the detailed
                                       business cases of aerodynamic devices, APUs, low rolling resistance tires, optimized powertrains,
4. What should I know before I arrive? lightweight equipment, compliant policies, reinforced infrastructure, and streamlined integrated logistics.
Executive Summary: Efficiency-improving technologies and techniques are
available, but fuel savings alone have not inspired their adoption.
  Fortunately, Class-7 and -8 long-haul trucks produced by OEMs today                       Owner-operators and fleet owners have access to an abundance of
  emit only a small fraction of greenhouse gases (GHGs) and particulate                     options providing additional control over operational fuel efficiency, yet
  matter (PM) that they emitted ten years ago. However, this incredible                     the average fuel economy of U.S. freight combination trucks rose by
  achievement comes with a lost opportunity cost. While filters and                         only 0.2% during 1970–2006, including a decline of 1.4% since 1996.
  catalyst technology ran up equipment budgets in order to capture                          In an extremely competitive industry with relatively low profit margins,
  emissions, trucks continue to burn the same amount of fuel from                           day-to-day business maintenance often takes precedence over long-
  which the emissions originate.                                                            term change and development, for good reason.
  Researchers understand the physics of over-the-road freight hauling                       RMI believes that stakeholders must consolidate the multiple, often
  and have thoroughly characterized its dynamics Despite this                               competing “visions” of stakeholders to align incentives for end users
  knowledge, the non-technological barriers to implementation and                           and accelerate the business cases of fuel conservation. Adoption
  market adoptions inhibit progress in realizing trucking fuel efficiency:                  strategies that leverage many stakeholders often have the best chances
     “We need higher level of market adoption to keep investing in new technologies.”       of gathering funding, maintaining market share, and reducing fuel
     “We don’t trust the efficiency numbers that OEMs claim.”                               consumption.
     “We have no funding to test and implement.”

      ENERGY EFFICIENCY                         PROCESS EFFICIENCY                                             POLICY IMPLICATIONS
       Technologies and Equipment           Logistical and Operational Processes              Regulation and Infrastructure         Program Funding and Incentives
  •   Aerodynamics Streamlining             •   Load Optimization (TL vs. LTL)          •   GHG and PM Emissions Limits         •   SmartWay Program
  •   Rolling Resistance Reduction          •   Hub-Spoke Distribution Network          •   Anti-idling Mandates                •   Cascade Sierra Solutions Programs
  •   Auxiliary Power Efficiency (APUs)     •   Warehouse/Inventory Management          •   Congestion Solutions                •   DOE Funding Initiatives
  •   Engine Idle Reduction                 •   Streamlined Routing                     •   Weight/Length Limits                •   State Rebates
  •   Powertrain “Right-sizing”             •   Driver Education and Metrics            •   Roadway Tolls                       •   Impending Carbon Exchange Market
  •   Powertrain Hybridization              •   Long-Combination Trailers               •   State and Federal Fees              •   Direct funding channels for end-users

                      The lack of efficiency improvement in trucking points to the need
                             for industry cohesion and creative collaborations.
Source: US DoT Transportation Energy Book,Table 5-02, 1/22/09, NPTC, 2008 Benchmarking Survey                                                                           3
Executive Summary: The viability of Transformational Trucking lies in its
profitability, clear benefits to the value chain.
                   Consumer                               POLICY                          New Collaborations
          Financiers     Small Fleets                           Regulatory             Accelerated Commitments to
                                                            Efficiency Mandates
  3rd Party Logistics    Policy Makers                                                   System-wide Efficiency
Component Suppliers      Innovation Startups                    Incentives

      Trailer OEMs       Tractor OEMs

         MegaFleets      Maintenance

                                                                                         $ $

    Technologies are
  ready to achieve 2X                                                                  Broader Market Adoption
    fuel efficiency ...
                                                                                            of Efficiency

                                         Operational Logistics,
                                        Efficiency + Productivity
                                          (Elimination of Losses)

                                “If any one of the stakeholders fails to see value in the implementation, it
                                                 will not prevail.” - Greg Skjodal, Ward N.A.                       4
Transformational Trucking Pre-Read
                                            Where do I start?

   1. What is this Document?

   2. What is Transformational Trucking?    Transformational Trucking focuses on increasing the efficiency of the whole
                                            system of trucking in the most cost-effective way. RMI has concluded the
                                              • Trucking suffers while maintaining a critical role in the U.S.
                                              • Compounded by the bleak economic outlook, market pressures threaten
                                                 to bankrupt this struggling industry.
                                              • Competitive advantage will demand fuel conservation.
   3. What is this Charrette?                 • Synergies exist in profitable efficiency and productivity.
                                              • For-profit industry is already demonstrating the potential for achieving
                                                 unprecedented productivity and efficiency without mandates
                 ?                            • Transformational Trucking faces technical, sociological, financial and
                                                 political obstacles.
                                            Thus, industry debates on the best path towards Transformational Trucking
   4. What should I know before I arrive?   should not focus on “Who is right?”, but “How can the players in the industry
                                            work together to survive and thrive?”
2.1 Trucking suffers while maintaining a critical role in the U.S.
 Consumer confidence has bottomed out and industrial production                                        planning for growth. Many truck freight customers have begun to
 in the U.S. is at its lowest point in 34 years. The recent economic                                   demand climate-friendly supply chain solutions and market forces
 downturn has now impacted nearly every industry, including the                                        are pushing energy efficiency in freight-goods transportation
 U.S. heavy trucking sector. In order to survive, the freight industry                                 solutions. Nonetheless, persistent structural, cultural, and economic
 must adapt with this external change.                                                                 barriers have impeded the heavy truck industry’s investment in and
 Despite the technical potential to dramatically improve the fuel                                      adoption of fuel-saving technologies.
 economy of heavy trucks, recent efficiency innovation has been
 incremental. Heavy trucks’ average mileage per gallon actually                                                  Fuel Economy and Mileage Outweigh Population
 decreased in the late 1990s and early 2000s, as cheap fuel and a
 soaring domestic economy led to emphasis on capacity over
                                                                                                                                                                            Class 8
 efficiency. In 2008, freight trucking consumed 2.4 MMbbl/day of                             Truck Population
                                                                                                                                                                            Class 7
 petroleum products as the second greatest user in the United                                                                                                               Class 6
 States.                                                                                                                                                                    Class 5
                                                                                                                                                                            Class 4
                                                                                          Fuel Consumption
 During the 20 months from February 2007 to October 2008, diesel                                                                                                            Class 3
 prices rose nearly 100 percent, from $2.40 to $4.70 a gallon, and
 then came down to $3.00. This flux creates challenges while                                                              0%     20%     40%     60%       80%       100%

                                                                                                                       GHG Emissions Increase from 1990 Values
Trucking’s Share in United States ...
 (Freight amongst Truck, Rail, Air, Ship)                                                                       50%
                                                                                           emissions increase

       Freight GHG Emissions 78%
       Freight Revenue 63%                                                                                      30%
              29% Freight Volume                                                                                           Medium/Heavy Duty Trucks
     8% National Oil Consumption                                                                                20%
    6% National CO2 Emissions                                                                                   10%
                                                                                                                                                      Light Duty Vehicles
                                                                                                                   1990 1992 1994 1996 1998 2000 2002 2004 2006
Source: M.J. Bradley & Associates, LLC., Setting the Stage for Regulation of Heavy-Duty Vehicle Fuel Economy & GHG Emissions: Issures and Opportunities, February 2009
        Inventory of U.S. GHG Emissions and Sinks: 1990-2006, EPA, #430-R-08-005,                                                                                                                                                  6
2.2 Compounded by the bleak economic outlook, market pressures
threaten to bankrupt this struggling industry.

                                                                                   More than 2,500
                                                                                owner/operator trucking
                                                                               companies went bankrupt
                                                                                        in 2008

                          Is trucking facing the same fate as the domestic auto industry?

Source: RMI Analysis, above sources as presented                                                          7
2.3 Current industry dynamics present more isolation gaps than
communication pathways.


                                                                                                            Organizations, and Industry Associations
                                                                                                              Government Regulators, Non-profit
                                                                                                                External Industry Influencers
                                                                 Tractor OEMs                Trailer OEMs

                                   Third-party         Mega
                                    Logistics          Fleets                                Component
                                                                  Engine OEMs

                                            Truck Leasors
                         Service            Private Haulers
                        End-Users          Owner-Operators
                                          Small-Medium Fleets   Equipment

                             End-User Engagement                             Engineering Firms,
                             Weak Relationship                              Innovation Start-ups
                             Strong Relationship                              and Design Firms

                                  Transformational Trucking will require a new format of operation
                                      between stakeholders with more, robust, connections.

Source: RMI Analysis                                                                                                                8
2.4 RMI hypotheses regarding “trucking efficiency” support a shift in
industry focus from cost to profits.
                                         The trucking industry’s business model currently hinges on the
        DELIVERING MORE OF               whims of the oil market. Such interdependence results in wildly
                                         uncontrollable dynamics for both providers and consumers of
        WHAT YOU WANT WITH               freight transportation.
                                         On the other hand, this reliance also reveals a key lever to
         THE LEAST ENERGY                promote profitability and firm business models: reduce
                                         petroleum consumption. An optimized vehicle design with
                                         minimized power requirements increases its range (miles) from
                                         each gallon of fuel.
                                         Though critical to energy independence and overall financial
                                         robustness, higher MPG cannot benefit the trucking industry
                                         alone. For example, a pickup truck achieves roughly three times
                                         the fuel economy of a Class-8 truck, but can only transport a
                                         small fraction of the freight. Thus, the second step of the
                                         Transformational Truck equation must incorporate maximized
                                         freight delivered during each trip, incorporated as TON-MILES /
                                         Combining technology and regulation to maximize this ratio will
                                         reduce oil dependency, but leaves additional fuel (and thus cost)
                                         savings on the table. Another factor that reduces overall fuel
                                         consumption regardless of change to fuel economy is total
                                         vehicle miles travelled, VMT. Logistics and route optimization
                                         are key levers for reducing both miles and gallons of fuel. Fewer
                                         “empty” miles, fewer required trips (increased load per delivery),
                                         and appropriate distribution of miles (to account for traffic and
                                         weather) all reduce VMT.

Source: RMI Analysis                                                                                          9
2.5 Transformational Trucking requires equipment, operations,
policy, and infrastructure.
    Trucking efficiency requires the optimization       RMI’s hypothesis underlying Transformational Trucking requires
                                                       integral activities to support efficiency implementation. Improved,
    of four major trucking elements, in                collaborative funding mechanisms support the business case behind
                                                       advanced technology, enhancing market adoption. Also, direct
    harmony...                                         connections between policy-makers and a variety of industry
       1. streamlined (low-resistance) equipment,      stakeholders supports coherence and alignment, avoided unintended
                                                       consequences of regulations.
       2. maximized freight capacity in each load,            Transformed Industry Dynamics
       3. tailored logistics and routing for reduced
          miles-traveled, and                                               Other Industry
       4. applicable policy implementation to                      Government Regulators, Non-profit
                                                                      Organizations, and Industry
          facilitate above measures,                                         Associations
                                                                         and Novel Financing order to cost-effectively achieve the                              Mechanisms             of Service
    goal of greater than DOUBLE the freight                                                  Private Haulers
    delivered per gallon of fuel.                                                           Owner-Operators
                                                                    Mega Fleets
                                                                                           Third-party Logistics
                                                                                          Small-Medium Fleets

              Profits                                                     Trailer OEMs
              Security                                                   Tractor OEMs
                                                                        Engineering Firms,
                                                                       Innovation Start-ups
                                                                         and Design Firms

Source: RMI Analysis                                                                                                         10
On a per-truck basis, the business case seems to sell itself.

                        Incremental Cash Flow of Single Tractor + 3 Trailors Retrofitted in 2010 or 2015
                                       Fuel Cost Savings
                                       Technology Cost, 2010 Retrofit
                      $120,000         Technology Cost, 2015 Retrofit
                                       Cumulative Cash Flow, 2010 Retrofit                                                             Efficiency Retrofit
                      $100,000         Cumulative Cash Flow, 2015 Retrofit
                                                                                                                                       Suite Includes:
                                                                                                                                          Trailer Skirts
  current year cash

                       $80,000                                                                                                             Trailer Tails
                                                                                                                                          Gap Fairings
                       $60,000                                                                                                       Wide-Base Single Tires
                                                                                                                                        Aluminum Rims
                       $40,000                                                                                                            Battery APU
                                                                                                                                       Engine ‘Right-Sizing’


                                  2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

                                 This efficiency retrofit suite will cost roughly $20,000, but pay itself
                                           back with fuel cost savings in under 10 months.
Source: RMI Trucking Industry Model, assumes 10% discount rate, standard Bass Adoption curve and EIA diesel price projections. Technology Cost spread out over 5
year lease period with 6% interest, includes equipment, installation, and maintenance costs.                                                                       11
2.6 RMI industry models convey an overwhelming business case to
implement fuel-saving efficiency measures.
                    With an initial investment of approximately 4.3 billion dollars today (net present value of the technology cost), the trucking industry
                    can transform itself, seeing an average 18-month payback and the creation of nearly 75,000 new jobs in the American economy.

                     Incremental Cash Flow of Nationwide Efficient Tractor-Trailor Retrofit Rollout
                     $25B                                                                                        500,000
                                   Fuel Cost Savings

                                                                                                                             number of transformed trucks
                                   Technology Cost                                                                                                                     This is only one
                                                                                                                                                                     scenario of potential
                                   Cumulative Cash Flow                                                                                                         efficiency implementation in
                     $20B          Number of Transformed Trucks
                                                                                                                                                              the trucking industry. Our model
                                                                                                                                                            dynamically analyzes these and other
                                                                                                                                                               metrics with respect to different
                                                                                                                                                              combinations of technology and
                     $15B                                                                                        300,000
current year cash

                                                                                                                                                            operations upgrade implementation. If
                                                                                                                                                            you have questions about the model,
                                                                                                                                                               or would like to see the model,
                                                                                                                                                                        please go to:
                     $10B                                                                                        200,000                                      

                      $5B                                                                                        100,000

                      $0B                                                                                        0

                              2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

                         With appropriate funding, transformation that will save over 9 billion gallons of fuel and 100 million
                            tons of CO2eq emissions can begin now and end up netting over $10B in net present value.
Source: RMI Trucking Industry Model, assumes 10% discount rate, standard Bass Adoption curve and EIA diesel price projections. Technology Cost spread out over 5
year lease period with 6% interest, includes equipment, installation, and maintenance costs.                                                                                                 12
2.7 For-profit industry is already demonstrating the potential for
achieving unprecedented productivity and efficiency without mandates
                           PROJECT         START                                  SCOPE                                               STAKEHOLDERS

                          Logistics                   President of this bulk carrier redesigned a Class-8 tractor-trailer with
                                                                                                                               Logistics management, confidential OEMs,
                         Management,        2004      major OEM for 25% more payload (25% fewer trips), better safety/
                                                                                                                               confidential delivery client
                             Inc.                     ergonomics, state-of-the-art aerodynamic technology

                            Cascade                   Finance and lease energy efficiency devices (APU, aerodynamic
                                                                                                                     Freight Wing, Department of Energy, All
                             Sierra         2004      add-ons, tires, etc.) to truck owner-operators and fleets. 2000
                                                                                                                     SmartWay product suppliers
                            Solutions                 trucks upgraded already.

                                                                                                                        EPA, Carriers, Logistics Companies, Dealers,
                              EPA                     “...a voluntary public-private initiative designed to improve the
                                                                                                                        Service Centers, Shippers, and Original
                            SmartWay        2004      environmental performance of the freight delivery system in the
                                                                                                                        Equipment Manufacturers across the
                           Partnership                United States through money saving, market-based approaches.”

                                                      State-of-the-art equipment for 25%+ fleetwide efficiency increase.
                            Wal-Mart                  Fifteen reclaimed grease fuel trucks that will run on cooking grease Wal-Mart, Peterbuilt, Eaton, Arvin Meritor,
                             Fleets                   Nine Peterbilt Model 386: 5 heavy-duty hybrids, 4 running on liquid other component suppliers
                                                      natural gas

                                                      Aerodynamics and tire advancement implications on OEM International, Frito Lay, Kentucky Trailer,
                         DOE-Navistar       2006
                                                      integrated design                                     Freight Wing and Michelin

                          21st Century                                                                                     Departments of Energy, Transportation, and
                                                      Advanced technologies, hybridzation, safety measures, reliability of
                            Trucking        2007                                                                           Defense; the Environmental Protection
                                                      technology adoption
                          Partnership                                                                                      Agency; and 15 industrial partners

                           Solid Oxide                Successful demo of SOFC units installed on Peterbuilt tractors
                          Fuel Cell APU     2008      generating electricity for hotel loads from a variety of fuels without Delphi, Peterbuilt, US DoE
                          Development                 combustion.

               While the industry suffered under volatile fuel prices during the last few
                years, small groups collaborated to pursue efficiency from various
                                 angles, and many were successful.
Source:,, Sharon Banks, RMI Analysis
2.8 Independently, industry players spend more money and time
avoiding obstacles than addressing the issues.
RMI has identified eight critical barriers to increased fuel efficiency:
        BARRIERS                                    DESCRIPTION                                               POSSIBLE INTERVENTIONS
 Lack of Large-Scale Market      •   Many fleet mgrs. won’t invest without proven, name-         •   Develop purchasing coalition
  Adoption of Fuel-Efficient          brand leadership                                           •   Create marketing plan and outreach committees
            Fleet                •   Despite 1st-mover advantage, adoption is slow              •   Industry information clearinghouse
                                 •   Fleets with desire to improve efficiency lack capital for   •   Provide and promote alternative funding mechanisms (e.g.,
      Capital Constraints            up-front investment (due to thin margins, credit               profit-sharing)
                                     crunch, payback periods)                                   •   Customized business cases

  Skepticism Regarding the       •   Doubts persist about functionality, safety, and            •   Independent, third party testing and verification of OEM claims
Operability, Maintenance, and        durability of fuel-saving add-ons, light weighting, and    •   Inter-fleet data sharing
 Safety of New Technologies          engine redesign                                            •   Fix inconsistent and restrictive regulation structure

                                 •   Greatest efficiency gains result from whole-system          •   Greater coordination among tractor/trailer OEMs
     Lack of Value Chain
                                     design, but fragmented manufacturing prevents              •   Inter-fleet data sharing
                                     realizing benefits                                          •   Create strong, large-group partnerships
                                                                                                •   Open dialogue (OEMs, fleets)
                                 •   “Snake oil solutions” taint valid efficiency claims
                                                                                                •   Customized testing, business cases
      Cultural Obstacles         •   Traditional style trumps economic efficiency
                                                                                                •   Fresh design ideas, cross-industry collaboration
                                 •   Truck R&D is underdeveloped relative to auto
                                                                                                •   Broader application of IT logistics solutions
                                 •   Fleets are unwilling to accept generic analysis of         •   Improved testing, measurement and customized modeling
    Uncertain Economics              economic benefits (each thinks it’s unique)                     capability
                                 •   Regulatory doubt clouds investment decisions               •   Low-risk purchasing/lending
                                 •   Customers don’t know efficiency possibilities, OEMs         •   Customer education, consortium to provide soft orders
    “Chicken and Egg”
                                     don’t want to cannibalize business                         •   Move equipment R&D outside OEMs
  Manufacturers and Fleets
                                 •   New designs require hard orders in advance                 •   Funding (VC) impetus
                                 •   Emissions regulations imposed on hasty schedules
    Misguided Policy and                                                                        •   An industry task-force integrated with policy makers
                                     consuming operator funds for technologies that inhibit
        Regulations                                                                             •   Shift in focus from emissions to overall fuel efficiency

              Few stakeholders have gathered to collaborate on one shared goal—efficiency—
                      due to barriers based on financial, policy and cultural reasons.                                                                           14
2.9 Hot Topics: RMI believes that informed discussions will help
establish alignment over feasible methods to bust barriers to efficiency.
                                                      ONE SIDE OF THE
    EXAMPLE ISSUES                                                                                 ...OPPOSING SIDE                    REASON FOR ALIGNMENT
                                                                                                                               This back-and-forth has the potential to
  Who should govern their
                                                                                                When the customers agree to go on forever without intervention.
 overall standards for whole- OEMs need to produce the trucks that
                                                                                                pay for our R&D, the OEMS will Crafted with support from industry,
 system benefits: DOT, EPA,      use less fuel!
                                                                                                answer.                        informed policies can serve the needs of
DOE, State, Legislature, other?
                                                                                                                               all parties.

                            If the money is right, they’ll abide.                               This industry hasn’t changed
Will owner-operators change                                                                                                     Without the buy-in of both the service
                            Applying for funding is rarely simple,                              much in the last 50 years and
to implement new technology                                                                                                     provider and end-user, solutions fall on
                            though. Owner-operators will need better                            doesn’t aim to. Funding is only
       and practices?                                                                                                           deaf ears.
                            clarity of funding mechanisms.                                      part of the story.

                                                                                       This regulation stands to clean                CARB aims to reduce large amounts of
     CARB’s “reefer rule”                    EPA’s waiver has given uninformed policy
                                                                                       up a dirty, consumption-heavy                  particulate matter emissions, but the
 regulation will help clean the              makers an undeserved right. The
                                                                                       state. This country may need a                 schedule is overly aggressive. Can the
   California air, but at what               expense and immediacy of this policy will
                                                                                       few progressive states to bring                same change be made at a profit to all
             cost?                           drive companies out of business.
                                                                                       the rest of the country forward.               stakeholders?
   IMPROVED                                                                                                                                                             OPPORTUNITY
                           The trucking industry is not monolithic—players hold widely diverse attitudes toward fuel efficiency improvement                              FOR CHANGE
                   Weak Macroeconomy                                                                                                       “Fleets would dress
                                                                                                 Tight credit markets
                                   “The price of      Razor-thin           “[Trucking is] an        and restricted                        drivers in clown suits to
     “I don’t like to                                                                              capital budgets    Private equity       get their hands on a 10
                                  fuel is back to    profit margins       industry that is not
lead the parade - you                 normal”                           always economically
                                                                                                                       acquisitions              mpg truck.”
get hit by all the bugs”                                                        rational.”                    Increasing
   - fleet manager                                                                                          Factor Costs (ex:    Rising Fuel Costs                      “[we can] pull
                                 Industrywide                         Industry                               Labor, Raw
                                                       Diesel price                                                                                                  cost out of these
                                 Overcapacity        increase > 80% Deregulation                              Materials)
                                                       2007–2008                                                                          Hunger for
               “...the !newness"                                                       “Most
                                                                                truckers are one major                                  information on
             or !strangeness" of a                                                                            “Fleet customers           new products
                                              “It!s not easy to               breakdown...away from                                                     “The larger the fleet,
          technology—especially in a                                                                       don"t know what level of
                                               convince [fleet                       bankruptcy.”                                                     the sharper the pencil...the
       conservative industry like trucking                                                                     fuel efficiency is
                                             managers] to switch            (935 companies w/5+ trucks                                              greater likelihood there is that
           —may be a hinderance to                                                                          possible...and OEMs
                                                  suppliers”                bankrupt in Q1 2008, highest                                            management understands [its
                  acceptance.”                                                 since 2001 recession)        aren"t telling them.”                         costs] to the penny.”

Source: RMI Analysis                                                                                                                                                                   15
Transformational Trucking Pre-Read
                                            Why am I here and what’s in store?

   1. What is this Document?

   2. What is Transformational Trucking?

                                            • Accelerating Transformational Trucking
                                            • Showcase Possible Solutions and See Them from Whole
                                              Systems Perspective
                                            • Guiding the Way Towards Actionable Solutions
                                            • Purpose in the Grand Scheme, Identify Each Orgnization’s Role
   3. What is this Charrette?                 in the Solution
                                            • Follow-Up/Continual Movement


   4. What should I know before I arrive?

3.1 Who is putting on this event?

          Rocky Mountain Institute
  Rocky Mountain Institute (RMI) is an independent, entrepreneurial,              The Robertson Foundation is a private foundation
  nonprofit organization that fosters the efficient and restorative use of        established in 1996 by Tiger Management founder
  resources to make the world secure, just, prosperous, and life-                 Julian H. Robertson, Jr., his wife Josie, and their
  sustaining. For 25 years RMI has been crafting profitable resource              family. With assets in excess of $1 billion and
  and energy efficiency solutions. Our research and consulting teams              designated future gifts considerably higher, the
  focus on the three core sectors of Built Environment (BET), Energy              foundation takes a targeted, businesslike, results-
  & Resources (ERT) and Mobility + Vehicle Efficiency (MOVE).                     oriented approach to philanthropy. The foundation
                                                                                  makes large, transformative grants. Its objective is
                                                                                  to leverage these grants by partnering with proven
                                                                                  grantees and aligned funders. It seeks measurable
                                                                                  outcomes in either the intermediate or longer term.
                                                                                  The Robertson Foundation currently targets high-
                                                                                  impact grants in four principal areas within the
                                                                                  United States: 1) education 2) environment 3)
                                                                                  medical research and 4) religion and spirituality. As
                                                                                  opportunities emerge, the foundation has provided
                                                                                  grants in other areas of interest.

                                       U.S. Energy

  At the Charrette itself, the RMI team will lead small, structured breakout groups that focus on specific sub-topics or challenges for
  the broader project. Throughout the three days of the Transformational Trucking Charrette, we will guide the participants through
  processes of brainstorming and converging on ideas to understand the biggest barriers to the evolution of Transformational
  Trucking and develop action plans to implement solutions addressing those barriers. Our role is that of a facilitator who provides a
  structured process to encourage the collaboration and creativity of the group while capturing the outcomes.

Source: RMI, Robertson Foundation,, 2/12/09                                                                   17
3.2 The Goal: Accelerate Transformational Trucking in the most
environmentally and economically beneficial way possible.
 RMI believes that the heavy trucking sector must change. During the past forty years the trucking industry has seen limited technology
 adoption and very few transitions towards optimizing efficiency. As evidenced by previous RMI clients, such as EDS, the Indiana Energy
 Systems Network, and Bright Automotive, industry stakeholders stand to benefit from active dialogue and collaboration. RMI proposes an
 action-based industry-wide design session to accelerate the transition to improved efficiency: the trucking sector does not have time to wait.
 Barrier-Busting Workshop: By reinforcing industry-wide partnerships and leveraging our own expertise in facilitated problem-solving, RMI
 seeks to accelerate fuel efficiency improvements in Class-8 trucks. Building on a technical foundation of applied research and industry analysis,
 RMI will convene an industry-wide Transformational Trucking Charrette to address the most pressing obstacles to greater trucking fuel
 Workshop participants will include major players from all segments of the heavy trucking value chain, including tractor/trailer equipment
 manufacturers, for-hire and private fleet executives, tier-1 component suppliers, outside influencers (including government agencies and
 nonprofit organizations), and end-user/shipping customers. By reaching across sectors, industries, and corporate boundaries, the workshop
 will harness diverse perspectives and pursue creative solutions.

       DAY                                     OUTCOME                                                                GOAL
                     Immersion and Vision: Ground participants in consumer experience,
                     work to find common threads in participants’ short-to-mid term
       Day 1                                                                                       Our goal is to accelerate the adoption of
                     visions, then establish the barriers currently blocking the path to
                                                                                                   Transformational Trucking elements in the
                     those visions.
                                                                                                   most environmentally and economically
                                                                                                   beneficial way possible.
                     Rank and Bust Barriers: Verify alignment of group upon barriers               To achieve this goal, the charrette will align
                     and establish a process for overcoming them. Brainstorm                       the vision of a diverse set of stakeholders in
       Day 2
                     strategies that work through and/or circumnavigate these “road                new and recently applicable ways.
                                                                                                   Additionally, the charrette participants will
                                                                                                   identify 3–5 specific projects that they will
                     Solutions and Commitment: Create 3–5 concrete project plans that              start the day after the charrette.
       Day 3         tackle top barriers, open markets, and pave the way to improved
                     efficiency. Detailed work structure and commit to actionable tasks.

3.3 How will this Charrette work?
Charrette (n.): An intense period of time during which a great amount of energy is dedicated to solving a specific design problem or problems by a given deadline *
     Pre-Charrette                                                                  Charrette                                                          Tomorrow
                                      Day One:                Day Two:                                               Day Three:
                                Immersion/Exploration System Limits and Beyond                                 Solution Development
                                                *Mix of small breakout groups to tackle specific goals and larger plenary
                                            Co      sessions for feedback/integration throughout charrette process*







                                                                                                   e                                Co
                                                                                                             Dive                        nve


                                  Brainstorming and                           Identifying Barriers                Refining Ideas and
     Research                                                                                                                                          Next Steps
                                 Building Value Chains                           and Solutions                        Planning

   In-depth stakeholder                                                         Complaint vetting,
     interviews, market                                                      classification of system         Revisit actionable roadmaps,
    studies, technology                                                     disconnects and perverse        compare/contrast with current
    and business case               Industry immersion                      incentives. Brainstorming         efforts and establish solid           Committed action,
           analysis                 and case-modeling                            solutions, goals              methods and personnel                     TBD

    Outputs       Pre-read, modeling, and       You will experience some small “ah-ha”            More “ah-ha” moments converge            Final convergence on just a
                  participant selection helps   moments, but Day One is often frustrating         around key solutions strategies,         few projects. However, all the
                  group converge on general     because it feels like a repetition of what        participants feel aligned, informed.     other ideas from the previous
                  areas of focus.               you already know. Actually, it’s aligning                                                  days are carefully documented.
                                                ideas and supporting Day 2.
                                                FOR MORE INFORMATION ON RMI CHARRETTES, PLEASE VISIT:
3.4 The Charrette is only one step towards a broader initiative.

         Exploration                                Modeling, and        Charrette
                                                                         Workshop                Synthesis          Implementation

       DEFINITION                   PARTICIPANTS                    PROCESS                                  EXAMPLES
 •   Multi-day, multi-         •   Tractor OEMs          •   Clear goals                    •   Designing necessary funding
     disciplinary, intensive   •   Trailer OEMs          •   Structured plenary and small       mechanism and channel for efficiency-
     innovation process                                      group sessions                     technology wider adopion
                               •   Component Suppliers
 •   Participants                                        •   Divergence (brainstorming)/          - Replicate Cascade Sierra Solutions
                               •   Design Specialists
     brainstorm and                                          convergence (prioritize and            to broader audience
     collaborate to find
                               •   Policy Makers
                                                             select best ideas)                   - Collaborate with ATA and state-
     breakthrough              •   Strategy Experts                                                 based trucking associations to
                                                         •   Rapid vetting and
     solutions to complex      •   Government                                                       impact policy recommendations
                                                             verification of new ideas
     problems                      Contractors           •   Cross-industry exchange              - Design pilot programs to retrofit older
                               •   RMI Consultants           and synthesis                          trucks with aerodynamic solutions,
                                                                                                    with more efficiency powertrains
                                                                                            •   Work with Logistics Providers to Reduce
                                                                                                Empty Back-Haul Miles
                                                                                                  - UPS, IBM logistics modeling to
                                                                                                    increase application of best practice

        RMI’s charrette process reveals stakeholder creativity while providing access
         to external expertise, and is one step in a multi-phase innovation process.
3.5 What happens after the Charrette?

 RMI has several hypotheses about the projects that will emerge from this Charrette, but the Charrette itself is neither a goal nor
 an end. Ultimately the event serves as a transition period organized to let the group create solutions. Below is a timeline with a few
 follow-up actions RMI has already planned, and some examples of major projects that could emerge.

            TIME                                                                ACTION
    1 week after Charrette         RMI will work with our press partners for in-depth media coverage of the event

                                   RMI will release the documentation of the charrette to participants only for peer review, in addition to
    2 weeks after Charrette
                                   publicizing the event beyond our press partners.

                                   RMI will release event documentation, including a guide for the future of Transformational Trucking and
                                   documentation of the discussion and conclusions of the charrette to the public via the web. The
    4 weeks after Charrette        website will be a source of information for consumers, decision-makers, and entrepreneurs interested
                                   in what this transition means for them, and will include a collaboration forum and the full charrette

                                   RMI will support participants in turning some the best project ideas into reality. RMI will facilitate
                                   collaboration, additional research, or proposal/business plan writing. RMI will also follow up with
   May through June, 2009          independent research into any economic or environmental questions that emerge as critical unknowns
                                   from the charrette. Potential projects could include: a guide for policy-makers, a new joint-venture for
                                   purchasing and/or selling networks, large-scale pilot projects with early-stage prototypes.

                                   Continue with collaborative projects initiated during the workshop. RMI will report key charrette
 July through December, 2009
                                   outcomes to other groups via publications and presentations.

                                   RMI continues to work with collaborative projects and document results. In March and April, RMI will
  January through April, 2010
                                   update research and guide to reflect the progress during the past year.

3.6 Charrette Scope—Boundaries to maintain focus and create
meaningful outcomes.
               IN SCOPE                                  OUT OF SCOPE                                    RATIONAL
                                                 Busting barriers for other countries (EU,   Global scope is important but too large
                                                              Japan, China)                           for three-day event
     Busting barriers within the U.S. and
     discussion on how the international
           market will affect them                Focus on one city or region for the first Move beyond isolated city or regional
                                                two days (although one could emerge on a demonstration projects and tackle U.S.-
                                                              Day 3 project)                          level issues

                                                 Review of specific technologies, brands,      Emphasis on system, integration, and
   High-level technology attributes that will                     etc.                           high-level coordination issues
  enable Transformational Trucking, barriers
                  and levers                                                                 Event is employing an Open Innovation
                                                       Disclosure of proprietary IP

                                                                                                Standards-making is a critical, but
    Suggesting standards, improving and
                                                   Creating a standards development              specialized, process with strong
     accelerating the standards-making
                                                              organization                   standards-making bodies (SAE, UL) that

                                                                                              Better coordination and integration of
                                                   Detailed analysis and comparison
   Discussion on the possibility of better                                                       rail and trucking may be a post
                                                  between rail and trucking, and issues
  multi-modal freight transportation sector.                                                  Charrette research topic, but entails a
                                                                                             much broader set of barriers / solutions.

    RMI encourages healthy debate that incorporates holistic perspectives and out-
     of-the-box alternatives, but we will curb out-of-scope topics to focus on the
         Charrette’s intended goals. Please send comments to
3.7 The Transformational Trucking Charrette Has Representatives
From Across the Heavy Duty Trucking Value Chain
     OEMs &                  INNOVATIVE                    LOGISTICS & NON-GOVERNMENT
                                                                                              RESEARCH               OTHERS
    SUPPLIERS              TECHNOLOGIES                      FLEETS

                                                                                                                   NEW BELGIUM


The companies we selected for this event are certainly leaders in their fields, however, we did not intend to create an exhaustive
list of players who will be involved in the future. Instead, this selection is representational of the major types of companies that
will be involved in the evolution of Transformational Trucking.
To see the individual participant list please visit:

Transformational Trucking Pre-Read

                                            What are the details?

   1. What is this Document?


   2. What is Transformational Trucking?

                                            This section is a synthesis of the technology and market research
                                            conducted by RMI over the last decade.
                                            • Today, commercially available OEM and aftermarket
                                              equipment address major contributors to inefficiency in
   3. What is this Charrette?
                                            • The lack of coordinated logistics across the system hinders
                                              productivity and increases operational costs for truck fleets and
                 ?                          • Regulations threaten to determine the future of trucking, and
                                              pro-active work towards alignment may be the best approach
                                              for fleets to have a voice in this debate.
   4. What should I know before I arrive?

4.1 Fuel efficiency determines a carriers robust advantage in
unstable economic times...
 Can a truck really achieve double efficiency?
 Recent research on heavy trucking efficiency indicates that fuel
 economy exceeding 10 miles per gallon using diesel is feasible with                                                                            75%
 currently available technologies. In July, 2008, Rocky Mountain
 Institute’s (RMI) Mobility + Vehicle Efficiency Group (MOVE)
 published “Transformational Trucks: Determining the Energy
 Efficiency Limits of a Class-8 Tractor-Trailer,” which represents the
 culmination of applied research on aerodynamics, rolling resistance,                                                              The appendices
 and integrated tractor-trailer design. “Transformational Trucks”                                                               following this section
 supports a growing industry sentiment that heavy trucks can double                                                           contain more detail into
 their fuel efficiency with minimal technological investment. RMI                                                             each industry element of
 developed this hypothesis in its 2005 publication Winning the Oil                                                                 trucking efficiency.
 Endgame, which is supported by scientific findings of the U.S.
 Department of Energy’s 21st Century Truck Partnership.

      6.5 mpg                                                                          Budget Advantages in Fuel Cost
      130 ton-mile/gal

                         Reduce energy consumption of the vehicle

                                                                         cost / mile
      12.5 mpg
      275 ton-mile/gal
                                                                                               e   Car
                         Maximize delivered cargo per vehicle and trip                                       r          ADVANTAGE
      8.7 mpg
      335 ton-mile/gal                                                         $2.50                $3.00              $3.50            $4.00         $4.50
                                                                                                                 diesel price ($/gal)
Source: RMI Analysis, NPTC, 2008 Benchmarking Survey                                                                                                          25
4.2 Today, commercially available OEM and aftermarket equipment
address most major areas of loss in the system.
The first aerodynamic device was a cab-mounted roof                                                             ics

deflector, developed in the 1960s by Airshield. It wasn’t
until the oil shocks of the 1970s that these technologies                                              od       Sensors
were really accepted. They’re still not universally used.                                   A        er        Telematics             Equipment Weight
Technology has infiltrated nearly every nook and cranny                                              Engine
of today’s long-haul truck, yet the average fuel economy
of the industry remains stalled just above 5 mpg.                                                              Tires                 Tires     Aerodynamics                      Tires

Many Fleets are Top-Ranked by SmartWay, 1.25
       Model Year 2007 or later engine
       Integrated cab-high roof fairing                                                                                                         Designed in 1936
                                                                                             120                                                                                   10
                                                                                                                                             with 135 HP and a top
       Tractor-mounted side fairing gap reducers                                                            1960
                                                                                                                                               speed of 50 mph                     9
       Tractor fuel-tank side fairings
       Aerodynamic bumper and mirrors                                                        100
       Options for reducing periods of extended engine idling            trucks in use (thousands)

                                                                                                                                                                                        average fuel economy (mpg)
       Options for low-rolling resistance tires mounted on                                                                                                                         7
       aluminum wheels
Can they do more, and do it more profitably?
                                                                                                     60                                                                            5
       Advanced battery-powered APU
       Trailer aerodynamic fairings                                                                                                                                                4
       Wide base tires                                                                               40                                                                   2007
       Optimized lightweight trailer structure
                                                                                                                                          500 HP                                   3
                                                                                                                                    Less than 6 miles to
       Optimized engine/transmission for reduced drag load                                                                                                                         2
                                                                                                     20                                  the gallon
       Optimized truck to trailer/container gap
       Integrated driver routing/safety training
       Certified logistics optimization software                                                      0                                                                             0
       Real-time acquisition and diagnostic telematics                                                1970            1975   1980   1985      1990       1995   2000   2005      2010

                                               SEE APPENDIX A FOR MORE INFORMATION ON TECHNOLOGY
 Source: Cooper, K.R.. “Commercial Vehicle Aerodynamic Drag Reduction: Historical Perspective as a Guide.” 2004                                                                     26
4.3 Sub-optimal logistical efficiency reduces productivity and
increases operation costs for truck fleets and drivers.
                                    The solution to increase productivity and reducing operation costs is the
                                   optimization of “getting what you want at the right place and the right time.”

                   Empty Backhauls                     A                      Delivery and Return Flow                              B
         10%                                                  Optimization of the following levers will keep
          5%                                                  long-haul trucking sustainably competitive:
                 2005    2006     2007    2008
                                                                          Flexibility in Time of Delivery
       United States Heavy Duty Truck                                              (Speed, Mode)
         Size / Length Regulations

                                                                          Matching Client Expectations
                                                                              (Requirements, Ease)

                                                                           Proper Asset Utilization
                                                                      (Weight, Volume, Distribution Centers)
         Maximum combination is a single trailer tractor
         Maximum combination is a double trailer tractor
         Maximum combination is a triple trailer tractor

                                                       SEE APPENDIX B FOR MORE INFORMATION ON LOGISTICS
Source: RMI Analysis,,,,,,,,, M.J. Bradley & Associates, LLC., Setting the Stage for
        Regulation of Heavy-Duty Vehicle Fuel Economy & GHG Emissions: Issures and Opportunities, February 2009                                                                                  27
4.4 Infrastructure and industry regulations will ultimately govern the
future of doubled trucking efficiency.
 Aging highways with low carrying capacities, inconsistent state legislation,                    Should national policy force change or do local governments have the
 and increasing pressure to reduce emissions all restrict the ability to                         foresight and consideration to pursue a better stakeholders synergy? Even
 implement efficiency. While the new administration has dedicated $27B                           if fleets can optimize the size of their trucks to achieve better efficiency,
 from the federal stimulus package to road and bridge repairs, the                               the emissions regulations may work against them. Policy-makers require
 implementation and GVWR of any new infrastructure is still                                      adequate information from the industry to properly understand the full
 undetermined. By coordinating and communicating national priorities in                          effect of their legislation, in this case by understanding the relationship
 trucking, the industry may find common ground with policy-makers.                               between fuel economy, emissions and engine load. This charrette aims at
                                                                                                 reinforcing the conduit for that communication.

        United States Heavy Duty Truck                                                                   Heavy Duty Truck Emission Standards
              Weight Regulations                                               16
                                                                                    EU NOx
                                                                               14   US NOx

                                                                                    Japan NOx
                                                           Emissions (g/kWh)



                                                                               6        Particulate
                                                                                        matter (PM)
                                                                                        as of 2008:
                                                                               4         US = 0.01
                                                                                         EU = 0.02
                                                                                        JP = 0.027
              Under 80,000 lbs                                                 2
                                                                                                                              Japan PM
              In between 80,000 and 100,000 lbs                                           US PM           EU PM
              In between 100,000 and 120,000 lbs                               0
                                                                                1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
              In between 120,000 and 140,000 lbs
              In between 140,000 and 165,000 lbs                                                                          Time (years)

                                                   SEE APPENDIX C FOR MORE INFORMATION ON POLICY
Source: RMI Analysis,, 3/6/09                                                                                                                                   28
Summary: Focused industry-wide collaboration is critical to realizing
efficient and productive transformational trucking.




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                  take on the industry?
     Send all comments and questions to Hiroko Kawai:

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