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Score another one for the law of unintended consequences:
In 2007, the Environmental Protection Agency (EPA) mandated stricter standards on new truck diesel engines in an
effort to curb emissions of pollutants known as “particulate
matter.” But it was soon discovered that the only way to keep
particulate matter from reaching the atmosphere was to trap
the pollutants inside the engine and use the combustion generated by diesel fuel to incinerate the matter. Unfortunately,
the process resulted in a drag on fuel economy, which, in
turn, required an increase in the amount of diesel fuel used,
which, in turn, effectively increased carbon emissions.
Glen P. Kedzie, vice president and associate environmental
counsel for the American Trucking Associations, estimates
that compliance with the 2007 standards has resulted in a 2-
to 4-percent reduction in a truck’s average fuel economy,
while raising the cost of a new engine by $8,000 to $10,000
per unit.
This is not the first time that truck manufacturers, buyers,
and leasing companies have taken it on the chin in the name
of sustainability. According to trucking industry estimates,
EPA clean air rules in 2002 drove up engine costs by $3,000
to $5,000 per unit, while reducing fuel economy by 6 to 8
percent, due mainly to the use of then-new Exhaust Gas
Recirculation (EGR) technology designed to reduce levels of
nitrous oxide. And even-tougher EPA emission rules that
take effect in 2010 will lead to a re-pricing of new engines to
the tune of $10,000 per unit, according to Kedzie. ;
— M.S.
Cass shipping index shows
improvement
A key monthly index of U.S. shipping activity continues to show improvement as 2009 progresses.
The index, published by freight audit and payment firm Cass Information Systems, is based on
the expenditures and shipments of Cass’s clients.
In June, the freight expenditure index reached
1.489, up from 1. 43 in May and 1. 39 in April. The
shipment index came in at 0.933, up from 0.913
in May and 0.878 in April.
Since the start of 2009, the Cass index has fluctuated wildly. For instance, the February expenditure
index was 1.507 and the shipment index stood at
0.938, which are both above June levels. Given the
general view that economic weakness was more
pronounced in February than in June, Cass executives warn against reading too much into month-over-month numbers, saying the index won’t produce a meaningful trend until summer’s end.
To put June’s numbers in historical context,
from the end of 2005 until mid-2008, the expenditure index averaged about 2.0, while the shipment index averaged about 1. 2. Both averages
are significantly higher than June’s figures, a
reflection of the rapid decline in the economy
and in shipping since last summer.
In 2008, Cass audited about 26 million shipments representing roughly $17.5 billion in shipper expenditures. ;
—M.S.
; Brown Shoe Co. has completed construction of a
350,000-square-foot Famous Footwear distribution center at
the Tejon Industrial Complex, 90 minutes north of Los
Angeles. Systems integrator Fortna designed the material
handling systems used at the new facility, which will serve
Brown’s stores and customers on the West Coast.
ground breakers
; Volkswagen has opened a $30 million auto parts distribution center in Jacksonville, Fla. The 260,000-square-foot facility, which incorporates energy-efficient lighting, insulated
dock doors, and other energy-saving features, serves 115
Volkswagen and Audi dealers.
; U.S. Foodservice has broken ground on a $13 million
addition to its distribution center in Topeka, Kan.
Construction on the 50,000-square-foot addition is scheduled for completion in early 2010.
; Watson Land Co. recently completed construction of a
297,107-square-foot industrial facility in Chino, Calif. Known
as the Legacy Building, the new facility has been awarded a
Gold-level LEED certification for green building performance
by the U.S. Green Building Council. This is the first speculative industrial building in Southern California to earn the
LEED Gold designation.
; ProLogis has signed three lease agreements in Europe
with DHL Supply Chain. The transactions include the leasing of 67,800 square feet of newly developed distribution
space at ProLogis Park Wroclaw in Poland, a lease extension
totaling 148,000 square feet at ProLogis Park Jönköping in
Sweden, and a lease extension totaling 48,400 square feet
at ProLogis Park Sochaczew, also in Poland. DHL now occupies 11. 7 million square feet of ProLogis distribution space
worldwide.
