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Monday, 01/01/2007 9:07:32 AM

Monday, January 01, 2007 9:07:32 AM

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Federal regulations that take effect Monday mandate cleaner diesel engines in new trucks and school buses, dramatically cutting pollution but raising costs.
The new engines, in combination with low-sulfur diesel fuel that began selling nationwide in October, will reduce particulate emissions by up to 98% over the previous generation, the Diesel Technology Forum says. Nitrogen-oxide emissions will fall by half.

But the new engines could add up to $12,000 to the cost of a new big-rig truck, which can run upward of $100,000. In addition, operators fear higher maintenance costs and worse fuel mileage.

"Clean air is not free," says Rich Moskowitz, who handles regulatory affairs for the American Trucking Associations, which supports the transition.

Truckers seeking to beat the price increases made 2006 a record year for truck makers. More than 373,000 big-rig trucks were built in North America, says Ken Vieth of A.C.T. Research, which follows truck sales trends. The tally easily topped the previous record of 330,000 trucks in 1999.

But next year, Vieth predicts "a production drought," with sales falling by more than 40% to 220,000 as trucking firms hold off buying to see how the new clean-diesel trucks perform.

One big maker, International Truck and Engine, built up to 200 vehicles a day during 2006, double the normal rate of production. Only about four years ago, production was as low as 37 vehicles a day because of sagging demand, spokesman Roy Wiley says.

The Navistar unit dealt with the extra orders this year "in an orderly fashion," mostly by having employees work overtime, Wiley says. He says International expects to weather any industry downturn next year with a sales boost from a new fuel-saving model.

One trucking firm delaying purchases is Schneider National, which operates a fleet of 15,000 trucks from Green Bay, Wis. Schneider increased its truck buying in the past three years to make its fleet younger, but will only take delivery of about 1,000 new tractor trucks in 2007, about half its normal replacement rate. Most of the new big rigs will arrive in the latter half of the year, which will "buy us time to understand the technology (to) make sure it's reliable," Vice President Steve Duley says. The company didn't have enough time to conduct long-term tests of sample clean-diesel models to check durability and costs.

The cost to truckers goes beyond new big-rig purchases, according to Moskowitz. The new fuel costs 5 cents to 10 cents more per gallon to refine and may produce lower fuel mileage. The new engines weigh more, further cutting mileage. "Over the long run, their increased costs will be passed on to the shippers and ultimately, the consumers," Moskowitz says.

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