Firm suggests 10% savings for fleets with little impact on truckload operations
Every year, it seems, a proposal for allowing 33-foot double trailers on the nation’s roadways resurfaces. Again, this year, a push is being made to influence Congress to make these longer tandem trailers legal.
Industry and safety groups have differing opinions of the trailers. A new market analysis by Noel Perry, truck & transportation expert for FTR Transportation Intelligence, argues the economics of 33-foot doubles – and, based solely on economic reasons, there is a valid case, Perry says.
“Predictably, the proposal has found strong objections from railroads and highway safety groups, and, surprisingly, some truckload TL carriers oppose the idea as well,” Perry notes. “The idea gets strong support from LTL (less-than-truckload) and parcel carriers. The latter two industry segments would be the prime users of the larger combination trailers.”
Perry argues that moving to 33-foot doubles will not impact large segments of the industry and that they will reduce the amount of work required to move goods, and therefore the number of trucks on the road. In fact, according to Perry, the use of 33-foot trailers will likely remain within the domain of those currently using the legal 28-foot combinations – LTL and parcel operations.
“Importantly, [current 28-foot doubles] regulations still restrict doubles operation to 80,000-pound gross weight, so there is only a cubic capacity advantage over conventional single-trailer rigs. Gross weight is still subject to the same federal limitations as single-trailer rigs,” Perry says.
The analyst notes that current 28-foot doubles offer a 4% capacity advantage over a standard 53-foot trailer, allowing LTL and parcel companies the ability to haul more freight to local destinations and then splitting the trailers into single pups for final delivery moves.
“Second, there is also a maneuvering advantage due to the shorter wheel-base of the trailers,” Perry adds. “The rear trailer follows the track of the lead trailer, allowing the rig to turn much more easily than a 53-foot trailer.”
The current proposals call for increasing doubles to 33 feet but leaving the 80,000-pound weight limit intact.
“The change would allow the operators to use two more pallet positions per trailer (i.e., use more cubic capacity while still staying below the gross vehicle weight limit),” Perry says. “The additional length allows an 18% increase in cubic capacity compared to the current 28-foot double operations. The additional length would also increase the cubic capacity advantage relative to 53-foot trailers – a 24.5% increase for 33-foot doubles versus the 4% increase earlier for 28-foot doubles.”
For shippers, the longer trailers would reduce shipping costs. Even the trucking companies will see benefits. Perry notes a 10% savings in overall equipment costs.
“The increase in length will increase new trailer costs by approximately 12%,” he says. “Since there will be no appreciable changes to tractor costs (the biggest cost component), the increase in cost for the entire rig averages out to just 4%. … Against this increase one must factor in the substantial reduction in total rigs required, up to 18% when comparing 28-foot combinations to 33-foot combinations. This decrease is due to the increase in cubic capacity per rig. That gives us a maximum savings in capital of 14% (18% reduction in rigs offset by the 4% increase in rig costs). Since the fleets will not always use the full capacity of the new rigs, the actual number falls to an estimated 10% capital savings.”
Less fuel - about 10% less, Perry says – and labor (15%) would be needed as well. Add in a 10% savings in maintenance due to a reduction in the number of trucks and trailers needed to move the same amount of freight and 10% reduction in total over-the-road operating costs.
All of these cost savings become important due to the growing e-commerce segment.
“This savings is especially relevant today because parcel, and to a lesser extent LTL, is an essential part of the fastest growing supply chain segments, those that serve the exploding online marketplace,” Perry says. “LTL and parcel carriers support the length change proposal because it will simplify their operations and ease difficult driver shortage issues.”
Perry adds the public benefits of 33-foot doubles as well, which include a 10% reduction in emissions, a 10% reduction in wear and tear on already stressed highways, and less congestion.
“When fully loaded, a 33-foot trailer combination can move the same amount of freight with 18% fewer combinations,” he notes. “The longer combinations take up 4% more space per combination than a 28-foot combination. This means that 33-foot combinations can move the same amount of freight in 14% less highway space, helping to reduce highway congestion.”
The argument made by safety advocates is that longer trucks are less safe. Perry addresses this as well.
“It holds with great certainty that double trailer operations, including those at 33 feet, are well within the currently-held acceptable limits for truck safety,” Perry says. “FTR knows of no engineering theory that shows that a modest increase in weight, still below 80,000 pounds, or the addition of 10 feet in length will make the truck significantly harder to control or stop.16 Since this is not, in any way, new technology or operating techniques, one can surmise that the 33-foot rigs should operate with the same good safety records already established by combination rigs.”
Opponents of 33-foot doubles have cited safety, environmental concerns and the risk of jobs and investment in existing 53-foot trailer equipment.
“As participants in a near ‘perfect’ market, truckload carriers are fully empowered to recognize in their pricing the sunk costs of their existing equipment, making it a viable alternative to expensive new equipment,” Perry says. “This adjustment is exactly what they did when 35-foot trailers became 40 feet, became 45 feet, became 48 feet, became 53 feet; and, since this is a competitive-driven market, carriers will pass on any extra costs (or benefits) to the shippers.
Moreover, if 33-foot trailers could legitimately be used in their network, the productivity gains produced would quickly recoup the investment costs.”
Perry says that 28-foot doubles are only used by carriers where sorting and resorting are required, as in LTL and parcel applications. As such, the freight moving on 33-foot doubles would be the same freight, which is not in the domain of truckload carriers now and would therefore have minimal impact on their operations.
“A 33-foot combination provides a 24.5% increase in cubic capacity over a 53-foot trailer. This advantage may be important to supply chains that could fill two trailers without going over the 80,000-pound gross-weight limit,” Perry notes. “That arrangement would create a 10% cost
reduction when factoring in the additional handling to unload two trailers rather than one. This savings could be enough of a cost advantage to make 33-foot doubles attractive outside the currently limited market for doubles. Given this advantage, one might naively assume that
penetration of doubles into the existing 53-foot rig fleets would be high, in some estimates up
to 90%. FTR research shows a much more limited penetration.”
Perry argues that because only 13% of TL freight cubes out, the best case scenario would be it all moves to 33-foot doubles. But, since some of that cubed out freight is because it meets weight restrictions, he estimates 10% is a more realistic assumption. Secondly, it would assume that all the freight in each trailer is going to the same destination.
“If not, the trailers have to be delivered one at a time, adding 20-25% in extra cost,” he says. “In addition, the origin and destination need the maneuvering space and extra docks to handle doubles. LTL and parcel terminals have such infrastructure; most shippers and receivers do not. In practice, one needs a drop lot for the idea to work, but doubles operations require almost double the spotting work of a single-trailer drop lot. Conservatively, these limitations would disqualify two-thirds of the above cube out users.”
Finally, truckload carriers can haul light freight one day and heavy freight the next. But, a 33-foot trailer is a specialized piece of equipment not equipped to haul wide variations of freight, Perry argues.
“In contrast, single trailers that haul cube freight, one day, may haul heavy freight on the next leg. That flexibility is a major operational and commercial advantage, usually a ruling advantage,” he says. “This limitation suggests that truckload doubles will be limited to closed loop dedicated operations (private or for hire), where cube freight and proper loading and unloading facilities are readily available. Again, conservatively, such operations account for 40% of the total.”
Putting together these operational challenges, Perry sees only 1-2% of truckload freight being a candidate for 33-foot doubles operation, a minimal impact on the industry.