Martin Labbe Associates 2007 Emissions TMC Meeting March 2004 Economic Consequences.

Martin Labbe Associates

2007 Emissions2007 Emissions

TMC MeetingTMC Meeting

March 2004

Economic ConsequencesEconomic Consequences


US Retail Sales

50,000

100,000

150,000

200,000

250,000

300,000

Class 8 Class 6&7


US Retail Sales

50,000

100,000

150,000

200,000

250,000

300,000

1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978

Class 8 Class 6&7


US Retail Sales

50,000

100,000

150,000

200,000

250,000

300,00019

80

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Class 8 Class 6&7


Inventory-To-Sales Ratios

1.21.251.3

1.351.4

1.451.5

1.551.6

1.651.7

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Retail

Wholesale

Manufacturing

Total


Transportation Services SegmentationLine Haul, Regional, Local

DISTRIBUTIONPRODUCTION

Line Haul

Line Haul

Line Haul

FINALGOODS

INTERMEDIATEGOODS

CRUDEMATERIALS

DISTRIBUTIONCENTERS

PRODUCERS/DISTRIBUTORS


Retail Outlets

DistributionCenters

Producers/Distributors

Regional/Local

Wholesalers

End Users End Users End Users

Line Haul/Regional

Line Haul/Regional

Line Haul/Regional/Local

LocalLocal

LocalRegional/Local Regional/

Local

DISTRIBUTION

Transportation Services SegmentationLine Haul, Regional, Local


Class 8 Population ChangePercent Change Year Ago

-5

0

5

10

81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98

Domestic Demand Class 8


US Class 8 Vehicle Population Age Trends

403 430 490

515 623824

9031,073

1,114

0

500

1000

1500

2000

2500

1998 2000 2004

11 to 20 6 to 10 1 to 5


Areas Impacted Direct Economic

Cost of goods sold

Fuel cost increase

Pre-buy issues


Areas Impacted Indirect Economic

Regional economic disruption

Cost of hiring

Layoff restrictions


Areas Impacted Equipment

Unknown maintenance Pre-buy quality Component suppliers Where to put it


Areas Impacted Operations

Increased fuel consumption Unscheduled downtime Scheduled downtime Increased training Enforcement issues


Areas Impacted Environment

Fuel issues Cleaning traps Disposing of waste Disposing of traps Diesel to gas switch


Current Estimates• Fuel – 6 to 20 cents per gallon• Fuel Economy – 6% to 9% loss• Equipment - $6,000 to $15,000• Additional Maintenance - $1,500 to

$3,000 per year• Waste material handling - $????• Roadside fines - $?,??? per incident


Net Profit Margins

00.5

11.5

22.5

33.5

4

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

$5 to 25 million

Over $25 Million


Timing – MLA Estimates• 1/1/2007 – Engines in all vehicles • 9/1/2006 – Final version to production

• 8/1/2005 – Current estimate of availability• 10/1/2005 – Estimate of production

• 10 months of testing


General Conclusions• Gross misestimate of impact

– Economic– Operations– Carrier profitability– Environment– Fuel economy– Energy conservation

Martin Labbe Associates 2007 Emissions TMC Meeting March 2004 Economic Consequences.

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