Above the Fold: Supply Chain Logistics News (April 26, 2024)

By Adrian Gonzalez

The woodpecker is back.

Maybe it’s not the same one that pecked a hole in my house a few years ago, but it could be a disgruntled relative.

I haven’t seen him yet, I’ve only heard his peck, peck, peck.

He’s taunting me, I know.

But I won’t let him get under my skin, peck away at me from the inside. I have enough going on in there.

So, peck all you want Mr. Woodpecker. I’m back too.

—

Pecking on, here’s the supply chain and logistics news that caught my attention this week:

Getting to Zero-Emissions in Freight Transport

This week the Biden-Harris Administration announced “a first-ever national goal to transition to a zero-emissions freight sector for truck, rail, aviation and marine, along with a commitment to develop a national zero-emissions freight strategy.” The press release contains a lot of details, but here are some excerpts related to freight:

As part of this commitment, the Environmental Protection Agency (EPA) is announcing today a nearly $1 billion funding opportunity for cities, states and Tribes through President Biden’s Inflation Reduction Act to replace Class 6 and Class 7 heavy duty vehicles – which include school buses, trash trucks, and delivery trucks – with zero-emissions vehicles. The funding will support infrastructure to charge, fuel and maintain heavy-duty zero emission vehicles along with workforce development and training to get this work done.

The Department of Transportation (DOT) is announcing the first tranche of its $400 million Reduction of Truck Emissions at Port Facilities Grant Program to improve air quality and reduce pollution for truck drivers, port workers and families that live in communities surrounding ports. The Department of Energy (DOE) is also announcing a $72 million investment to establish a “SuperTruck: Charged” program that will demonstrate how vehicle-grid integration enables depots and truck stops to provide affordable, reliable charging while increasing grid resiliency.

$1.5 billion sounds like a lot of money, but if using electric trucks is the main solution envisioned to get to zero emissions, it’s a drop in the bucket. A report from Roland Berger released in March 2024 by the Clean Freight Coalition estimates that “full electrification of the U.S. commercial truck fleet would require nearly $1 trillion in infrastructure investment alone.”

(Speaking of electric trucks, Tesla’s Semi, which was supposed to launch in 2019, is now slated to go into production in late 2025. Maybe. We’ll see. I hope you’re still not holding your breath.)

Battery-powered electric trucks, however, aren’t the only option on the table. Earlier this week, for example, The American Transportation Research Institute (ATRI) released a new report “that analyzes the benefits of employing renewable diesel (RD) as an alternative to battery electric vehicle (BEV) trucks.” Here are excerpts from the press release:

While both RD and BEV pathways have implementation costs, the report concludes that relying on BEV to decrease CO2 emissions is nearly six times more expensive than using RD.

Overall, ATRI estimated that a transition to BEV for long-haul trucking will cost over $1 trillion in electric infrastructure and vehicle purchase costs over 15 years. However, to achieve similar CO2 benefits with RD, ATRI estimates a price tag of $203 billion, a significant cost savings for achieving the same environmental benefits. Since RD is considerably more scalable than BEV and can be deployed immediately in trucks without modifications, it is likely that CO2 benefits using RD can be achieved on a much shorter timeline than with a BEV transition.

What fuel will ultimately power freight trucks in 2040? We’ll just have to wait and see, but there will be plenty of lobbying, politicking, money spent, and trials and errors between now and then.

And maybe, just maybe, by 2040 the Tesla Semi will be in full production too.

And with that, have a meaningful weekend!

Song of the Week: “Tuff Enuff” by The Fabulous Thunderbirds