Transportation Costs Killing Your Margins? Invest in a New Truck

Thursday, August 14, 2008 9:07

With oil shooting through 150 USD a barrel, the cost of transportation has become a factor for many manufacturing in China – particularly those exporting.

Nothing new about that, and it just as that average Joe in the US is getting used to 4 USD a gallon gas, manufacturers are going to have to either get used to paying 30% more trucking charges, find ways to move their manufacturing closer to their customers, or find ways to save without moving.

In China, saving are really there for the taking.  Just consider the fact that China is reporting out 17-20% of GDP as the costs of logistics whereas the US and EU are  in the 9-11%.

On the equipment side,  trucks in China have a real range of size, capabilities and reliabilities.. but if there is one thing they all share, it is the ability to reduce carbon emissions, improve fuel efficiency, and save money.

Which according to a recent article Solutions for the long haul,that highlights a report by the Rocky Mountain Institute on the US trucks:

According to the study, the average Class 8 tractor trailer — the kind of truck you see most often on the Interstate — gets about 6.5 miles per gallon on the highway when fully loaded. RMI Senior Consultant Michael Ogburn thinks that highway mileage could be increased to 12.3 mpg in the next few years with readily available technology.

Particularly interesting about this report is that they have broken down on page 8 the energy usage of a typical tractor trailer in the US (a study of Chinese trucks is sure to yield a vastly different result do to very different aerodynamic conditions).

Primary factors in the energy usage are:

  • engine 56% + idling and aux 8%
  • aerodynamics 21%
  • tires 13%

to read the full report, you can download the full report report here

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3 Responses to “Transportation Costs Killing Your Margins? Invest in a New Truck”

  1. New Trucks says:

    August 15th, 2008 at 5:19 am

    I’d be interested in seeing the same study with a Chinese truck.

  2. New Trucks says:

    August 18th, 2008 at 8:49 am

    Yes, and there’s no business hurting more than the trucking industry.

  3. Rich says:

    August 18th, 2008 at 11:54 pm

    New Trucks

    All you have to do is drive down the road to see that some of the most non-aerodynamic trucks in the world are found in China. All the major brands (and there are only two) still put out military transport looking models that are simply big and ugly.

    so.. in a country like China where 20% of GDP goes for logistics.. there is a lot of room to invest and save.