That’s the conclusion of transportation consultant Rod Case, a partner at Oliver Wyman who spoke at the RailTrends 2019 conference last week.
“We would like to reinforce the issue is not the driverless truck,” Case says. “The issue is competing on the energy inputs and the rate this gets adopted.”
Skeptics chuckled in 2017 when Tesla unveiled plans to produce a battery powered truck that company founder Elon Musk said would be a railroad killer. The Tesla truck, Musk said, would be 20% cheaper to operate than diesel trucks.
Since then, battery technology has improved, electricity costs have declined as natural gas and renewables have pushed coal aside as a generation source, and more electric truck manufacturers are entering the fray, Case says.
The result? The energy cost per mile for a battery-electric truck could be as much as 80% below that of diesel trucks.
“This is effectively a steam to diesel transition” for the trucking industry because of the efficiency gains of battery power over diesel rigs, Case says.
Trucking companies are not rushing out to buy battery powered trucks, which have yet to develop the range or carrying capacity of their traditional fuel counterparts.
But Amazon announced in September that it has ordered 100,000 electric delivery vehicles from start-up electric automaker Rivian.
The $10-billion order, set for delivery between 2021 and 2024, is what Case calls the “gateway drug” for the widespread commercialization of electric trucks.
“That is an immediate issue that we have to pay attention to,” Case says. “And it’s getting more real.”
A positive trend for railroads is that big companies are aiming to reduce the carbon footprint of their supply chains.
Walmart, for example, wants its supply chain partners to remove a gigaton of carbon emissions by 2030. One gigaton is equal to about 880 million tons — the rough equivalent of 88,000,000 loaded 100-ton hopper cars.
One way they can move toward that goal, Case says, is by increasing use of railroads and intermodal, which are more fuel efficient than conventional diesel trucks.
RailTrends is sponsored by independent analyst Anthony B. Hatch and industry trade publication Progressive Railroading.
Railroads never have been consistently aggressive at marketing. There are ways to increase paying loads, but you have to get the product on board the next train. How does the customer access the next train out of town? Has anybody enlightened the potential customers? Has anybody identified them?
Truicking related companies are going to have to fix the rolling resistance problems they have. Don’t forget that rails use 10 percent of the energy of balloon tired trucks and cars. Autonomous? That is still a ways off – and trains under PTC may well be there as well. The problem with autonomous vehicles is that not every situation is fixed before the incident. Who will be there to straighten out the situation when that does happen and how long will it take?
In the case of autonomous trucks, you have the same “Catch 22” as you do with autonomous trains. All you need is a “Lac Megantic” type accident with the government, lawyers, and the media involved before there’s a recall that would make the 737 Max grounding look like it involved Testors gliders…
As for electric trucks in general, right now, in the event of an accident with a hybrid or electric car, any accident requires a HAZMAT response. And, those fees aren’t cheap. Those fees are no doubt included in the insurance premiums for those vehicles. As the number of those vehicles increase, the frequency/severity of accidents will undoubtedly increase. So, guess what else will increase?
Up to perhaps 500 miles, trucks are viable. But, beyond that, rail is a better deal. Surprised the Class 1’s aren’t going after that market more aggressively.
The railroads aren’t going away anytime soon if trucks deploy electric driven powertrain. Trucks are driving the industry and railroads are still wondering around looking for operating schedules and service that satisfies customer demand. Service at the best cost is where things are for the 21st century. The railroads could divert traffic off the highway if not so sensitive yo WS demands. Right now the railroads are losing market share even while making bucket loads of money. This trend cannot be sustained. If the economy takes off, the railroads will capture the overflow from what trucks cannot handle. The suject electric technology for trucks will continue to put price pressure on the railroads. To answer the competition, railroads will have to come off its WS obsession.
I agree John. The railroads are leaving a lot of profitable business on the table. With the lose of coal traffic and some other bulk commodities, railroads need to convert some of the cost cutting to tariff reduction. In doing so, they could expand their market share without loss of their vaunted operation ratio under PSR. Will they do it, I really don’t think so. The railroads can go in front of a traffic club luncheon and talk a good game, but that is about it. I do think however, the railroads will always retain the default business that maybe beholden to the railroads or when truck capacity begins to shrink with an ever better economy.
If trucks can be electric powered, then so could trains… with presumably the same increase in efficiency?
Not exactly… The highways are still overcrowded, trucks can’t get heavier, and rubber tires still have far more friction than trains, so use far more energy per ton. And – if electric operation becomes a thing – it is far less carbon footprint to put that transport on rails, where the steel wheels have less than 1/13th the rolling resistance and where it doesn’t take a separate driver for every 80,000 pounds of cargo.
Will this challenge railroads? Maybe – a little. But the idea that this makes railroads go away makes this story just clickbait.
Tesla claims their electric semi tractor will cost between $150,000 to $200,000. A diesel ‘fleet’ rig such as the Freightliner Cascadia { used by carriers such as Werner & Schneider } will set you back $130,000 – tops. Not to say it won’t be someday, but for now it’s really no contest. The diesels will rule for a while yet……
This why railroads are going to PSR. Without new technology the railroads will be toast except bulk and mostly international containers. The railroads are essentially downsizing short of technological breakthroughs that will bring in new business. With all the empty track capacity the railroads could move a lot more business. Trouble is what they mostly offer is mediocre service few are buying at the tariffs now offered.
They will loose a lot of the efficiencies. They will have to have a tax added to make up the difference in fuel tax
Electric rigs but still no new highways to drive them on. I 80 on the far south side of Chicago? Ever been there? I94 in the winter? Ever been there?
Do as Europe does. Put whole rigs on TOFC (truck on flat cars) and train them the long distances then drive them off. Maybe even recharge them on the way with a generator unit. A true Iron Highway that CSX put so much time and effort into. No more building expressways that immediately fill up with traffic. Those building days are over.
Daniel; you and I are thinking along similar lines.
Whether we’re talking diesel power, electric, autonomous, platooned – take your pick; the US is sorely lacking in the highway capacity to absorb thousands and thousands of new truck shipments. Railroads wave all these purported threats around like so many bogeymen when it serves whatever purpose they have in mind from regulatory to labor and customer relations (and I use the word “relations” VERY loosely in this context).
I sometimes believe the analysts who harp on this all the time haven’t spent even 30 minutes on an interstate highway in the past decade.
Maybe Warren Buffet should use his elephant gun to invest Berkshire’s large cash reserve to work electrifying the Santa Fe Transcon. Matt Rose would be a good candidate to manage the project and Berkshire Hathaway Energy could provide the wind and solar power to operate it. That would put BNSF on the same energy cost basis as electric trucks.
With the potential introduction of all these electric powered trucks and cars, has anyone studied how much of an additional load this would place on an already aging and strained power grid? Yes battery technology has come a long way, but at some point you will need to recharge them. With many people plugging in at once, hello brownouts.
Gas powered trucks are a jolt. What are you taking about?!
One stormy day with traffic backups and the batteries will die out on the new battery powered trucks.
Let’s not be so hasty…. For local delivery EV yes. OTR No.. Not for awhile.. Diesel will still rule OTR as the batteries are too heavy eating into net weight..
I like what I see but …
Electric vehicles do not contain a prime mover. They contain an energy storage device and a mover. The prime mover is somewhere else.
If properly done this can serve to hold down emissions. Zero or low emissions generating sources are gaining steam and doing well. Coal is down, but natural gas (which produces CO2) is up. Nuclear? Well, we can’t use the N word here, can we now? And as for hydroelectric, there really isn’t another place to put a set of turbines. Indeed, dams are being removed because they are causing fish stocks to drop.
But anything that reduces carbon emissions I am favour of.
The above comments are genetic in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Soylent Green is people!
They say electricity cost have declined as natural gas and renewables have pushed coal aside so Duke has done that but why has my electric bill gone up.
This means Wabtec’s move into plugin-electric engines is more strategic than many thought. It could provide a gateway technology to either fuel cell or full battery train operation.
I don’t think aggregates and hazmat chem will move to electric trucks anytime soon, but if those cost reductions hold up, rail will lose another market.
The battery technology has come so far now, Airbus is even testing an electric propjet engine on light aircraft.
If Wabtec can get the HP per kW up to diesel standards over the life of the haul, they will have made a breakthrough.
No catenary needed, no large power distribution network over the rails. Though I could see a transition to interim by using 800V catenary to provide a “top off” of the batteries during a low effort move or on sidings.