Combustion v. Compression

One of the biggest decisions facing a fleet manager when he or she fills out a spec' sheet for new medium-duty trucks is whether to spec' gasoline or diesel engines. To find out what goes into this decision, we spoke with a manager of a fleet that has just switched from diesel to gas power across the board in its medium-duty trucks, and representatives of a medium-duty truck manufacturer that has recently eliminated the gas engine option on its products.

Craig Joost, senior manager, corporate operations for 1-800-GOT-JUNK, a Vancouver, B.C.-based full-service junk removal company, oversees a fleet of about 1,000 medium-duty box trucks operating in the U.S., Canada and Australia.

According to Joost, 1-800-GOT-JUNK is not afraid to radically alter the way it operates if it sees a clear benefit to its franchisees in doing so. Up until five years ago, the company used Ford trucks, he says, "But with us operating in metros, the cabover configuration is just a way nicer turning radius and much easier for guys to drive. So, we did a switch-over five years ago."

That switch was from Ford to Isuzu, and today 85 percent of the trucks in the fleet are N-Series Isuzus. But now those are changing as well, from running on 4H 5.2L diesel engines to Vortec 6.0L gas engines.

NEAT & CLEAN

1-800-GOT-JUNK is a franchised private junk removal service, and each franchisee manages his or her own fleet of trucks. "It's a turnkey operation," Joost explains. "When they need a truck they call our main dealer, order the truck, arrange the financing, and the truck gets delivered with our spec' body on it and our spec' of truck."

As part of the company's squeaky-clean image, those trucks must always be clean and well-maintained.

"So, our guys can only keep their trucks for seven years because of our image," Joost says. "It's part of our brand to have the guys show up fully-uniformed, in a bright, shiny truck. We're going into people's houses; we don't want to look like Joe the garbage guy showing up in a beat-up truck and stomping around the house.

"So, with that in mind, part of our franchise agreement states that after seven years they have to replace their trucks," he says. "There is a one-year grace period, where we'll actually look at the truck and if it looks good and has been maintained well you can run it for one more year."

LIFE EXPECTANCIES

Up until 2007, the company relied exclusively on diesel power, and was even experimenting with biodiesel ("Biodiesel on Trial," Fuel Advantage, Fall 2007). But the EPA 2007 diesel engines had caused serious sticker shock among the company's franchisees, and Joost started taking a close look at whether the company could continue to justify the higher cost of diesel engines.

"We did a study on how many miles our franchisees travel in a year, because they're in such tight areas in such tight metros that they don't do any long-haul driving," he explains. "So, we looked at the mileage that they did, and with Isuzu we determined that our guys do on average about 20,000 miles a year per truck.

"And then we looked at the new generation of gas trucks that was out," he goes on. "We said, ‘What's the lifespan of a gas engine?' and Isuzu said, ‘Well, 160,000 to 200,000 miles wouldn't be an issue.'"

Joost did the math. If the company was requiring franchisees to replace their trucks after seven years--eight at the most--and each truck put on 20,000 miles a year, then the lifespan of a truck with a Vortec 6.0L gas engine fit in perfectly with the 1-800-GOT-JUNK business model.

"It really came down to the life of the truck, the application, and what fit for us," he explains. "I know in other businesses they might haul a lot heavier payloads, where our guys on our trucks actually cube out most times before they go over weight. You know, bulky couches and things take up room, but they don't weigh that much. Sure, we have the odd run where we pick up heavier stuff, but for the most part the truck is just not under the same stress as, say, a dump truck, and it doesn't need a crazy amount of torque.

"Really, when we broke it down, we were spending thousands less per (gasoline-powered) truck with the post-2007 diesels coming out and gas trucks essentially staying the same price," he says. "It was significant, so that was the rationale for starting the switchover."

FRANCHISEE ACCEPTANCE

It wasn't hard to convince the franchisees to switch over, despite Joost's estimate that "You'll always have five or ten percent who are hard-core diesel guys." Those hard-core diesel guys are not being forced to change their ways, but the company lets them know what they'll be dealing with if they continue to spec' diesels. Delivery time will be longer, for one thing, because the company only has gasoline models on reserve with Isuzu, the purchase price will be higher, and the company's long-term analysis shows that there will be cost-of-operations implications for the life of the truck.

"So, there are some qualitative and some quantitative measures that we've looked at," Joost says. "We didn't just make this decision out of the blue."

On the qualitative side of the decision, franchisees must consider the age and experience levels of their drivers. "They're not professional drivers," Joost says. "When you look at post-2007 diesel trucks with DPF regeneration and all the extras that come with it, (gas) was a lot easier.

"When you look at the actual everyday use of employees--their turnover rate is on average eight or nine months, because they're students and they go back to school or move on--these aren't long-haul drivers, or owner-operators of the truck," he says. "So, we wanted to get the cabover because the size of the truck is specific to these guys feeling comfortable driving the vehicle, and the gas application, for the average person in North America, is what they're used to. All that adds to their comfort level and confidence, which we feel translates into a safer operation."

COST OF OPERATION

To those who argue that the fuel economy gain you get with a diesel engine trumps all other considerations, Joost offers an alternative view. First of all, he believes that, in the post-2007 world, the lower lifetime fuel consumption of a diesel engine doesn't offset the higher initial purchase price or the higher cost of a gallon of diesel fuel.

Further, even this early in the program he sees a difference in maintenance expenses.

"If anything, this is actually reducing maintenance costs overall," he says, "just with the parts for gas trucks being cheaper and easier to get than those for diesels. They're just cheaper to work on in general.

"We still don't have numbers that show the frequency with which the trucks are going in for service, but that is something that we are looking at to say, ‘Listen, a part for a diesel costs $500 while the same part for a gas engine costs $270, but are you replacing it twice as much?' But we haven't gone far enough into the life of the gas trucks, because they're only a year old."

Joost also finds that it is easier for franchisees to find skilled technicians who can work on gasoline-powered trucks. While the company encourages franchisees to have trucks serviced and maintained at Isuzu dealers, some don't have access to the dealer network and have to fend for themselves.

"We're in 44 states, and we go from rural markets right into downtown Manhattan, so there is definitely a benefit to someone who is, maybe, in Idaho in a rural town who has a local mechanic who can work on the truck when there isn't a dealership within 150-200 miles," Joost says.

"It's tough, if you have two trucks in your operation, to drive four or five hours for a service."

APPLICATION-SPECIFIC

"I don't have anything against diesels," Joost proclaims. "And I'm not a huge proponent of gas in the same way. But for our business application I am, just because it makes sense for our guys and the size of the business and the initial capital investment in these trucks. If they can save $10,000 to $15,000 on buying two trucks--because they have to when they start the business--that's significant, because that could be operating capital. It just makes sense for us."

For other applications--say, those where the truck clocks 30,000 to 50,000 miles a year--Joost admits that gas engines wouldn't be the right spec'. "It probably wouldn't make sense, because by year four or five they will already have gone to what we feel is a comfortable mileage on a gas engine," he says.

"We have a fleet specialist here who handles all the calls and works with Isuzu, and when we can do (maintenance) on a dealer level that's fine," he says, "but all our franchisees are responsible for doing their own maintenance, and whether they go to a local mechanic or whether they have scheduled service that they go into an Isuzu dealer for, it's up to the FP and what makes sense in their region."

While the company doesn't force franchisees to use the Isuzu dealer network for their maintenance and repair needs, Joost hopes they will, for one simple reason:

"It's a lot easier if you want to return it, if there's warranty info," Joost explains. "It's a lot easier for us to go to Isuzu and say, ‘What do we do about this? It's a month out of warranty.' And they've helped us a lot on that; they've really been an awesome company. We've had issues where it's a month out and they say ‘This guy's taken the truck in to the same dealership for every service, the service was just performed a few months ago, this should not have happened, we'll cover it.' They really have been a pleasure to work with."

DIESEL CLATTER

But some medium-duty fleets just can't get away from that diesel clatter, and Chrysler LLC Commercial Vehicles is ready to serve them. The company recently deleted its only gas engine option, the 3.5L V6, on its medium-duty trucks, leaving its Class-4 and 5 Sprinter van, like its Ram Chassis Cab cousin, a diesel-only proposition.

"We never really expected the gas engine in the Sprinter to be a high runner," explains Pamela Niekamp, senior manager--commercial vehicle marketing and product planning for Chrysler LLC Commercial Vehicles. "Our diesel engine is a very good engine that offers superior fuel economy. It's a Mercedes-Benz engine, and it's been one of the strengths of the Sprinter product."

The gas engine was offered on the U.S. spec' Sprinter when the redesigned model was introduced because it was being offered already in other markets. Because the vehicle is produced in Germany, disassembled and shipped across the Atlantic, and then re-assembled in the U.S., it was a simple enough matter to mix the gasoline engine version into the supply chain.

"We thought that there would be a certain niche segment of our customer base that would prefer the gas engine," she says. "The concern was that the gas engine in the Sprinter required premium fuel, and in this environment, with the price of fuel, it just became prohibitive to the point that fewer of our customers were able to make use of that option than we had expected."

CUSTOMER RESEARCH

That decision to focus on the 3.0L V6 turbodiesel for the Sprinter reflects what the company discovered during the development process of its medium-duty Ram Chassis Cabs. The majority of respondents to Chrysler's research said that they required a diesel engine for the majority of their type of work. The reasons cited for their preference for diesel power included diesel's reputation for being long-lasting, durable and reliable, well-suited to hauling and towing, and fuel-efficient.

"There were some that preferred a gas engine, and they cited things like a less-expensive acquisition price, being easier to maintain, from their point-of-view, but it was our conclusion, in the end, that the lack of a gas-powered medium-duty truck wasn't a deal-breaker," Niekamp says.

Interestingly, when Sterling Trucks wanted to offer its own version of the Ram medium-duty chassis cab, "The Bullet," Sterling marketers didn't entirely trust Dodge's market research.

"They asked us the same question: ‘Aren't you concerned about not having a gas engine in your lineup?'" Niekamp says. "‘No,' we said, ‘here's our research, here's what our customers say.'

"Well, they wanted confirmation, so they did research of their own, and their research, to their surprise, replicated what we found," she says. "Most of the fleet customers they talked to had a mix of gasoline and diesel-powered trucks in their fleets, but their preference skewed--and this is their word--'severely' towards diesel. And it was for all the same reasons we found in our research."

Sterling's research did point to some regional preferences: for example, fleets in Los Angeles preferred diesel over gas, much moreso than in other areas of the country. Likewise, diesel preference was high in certain vocations, such as utilities and construction.

"They did find some preference for gas in rural areas, neighborhoods where noise was a concern," Niekamp says. "The companies that prefer gas don't intend to keep their vehicles as long. Or they have smaller, lighter-duty trucks, such as Class-4, that tend to skew higher towards a preference for gas than Class-5.

"But Sterling's conclusion from this research was that customers in the medium-duty segment by and large do prefer a diesel engine. They came away convinced, as we were, that the strategy for our customers was the right one."

POPULARITY CONTEST

To Brad Pugh, Ram Chassis Cab product planner for Chrysler LLC Commercial Vehicles, the reasons for diesel's popularity in his medium-duty product are easy to grasp.

"The diesel is as popular as it is, number one, because of the way it performs," he says. "Number two, in a very close second, is the name Cummins on the badge.

"With the Cummins you get best-in-class fuel efficiency," he says, "so you're saving money at the pump when you're hauling heavy loads, and you're able to develop all your torque at super-low engine rpms. So, at 1,600 rpm, we already have all our engine torque, which is 610 lb-ft.

"You compare that to a gas engine, where your torque curve is steep--it's more like a mountain slope, as opposed to a plateau that you get with a diesel engine," he explains. "So, you get maximum pulling power for trailer towing, for the heavy loads that a Class-3, 4 or 5 sees. And you're able to get that right off the line."

Pugh also points out that diesel trucks generally have higher resale value: "If you look at the historical prices of used trucks, the ones with diesel engines will hold their value a little bit better, and you'll get a higher return when you have to replace that truck."

EMISSION ISSUES

Although one reason cited by Craig Joost with 1-800-GOT-JUNK for eschewing diesel engines was concern about the regeneration process of the diesel particulate filter (DPF), Pugh doesn't see this as a significant issue.

"The technology shouldn't be as scary as it is to the customer, especially in a Class-4 or 5 truck where, right now, you don't have to remove the particulate trap to clean it," Pugh says. "We've worked hard with Cummins to calibrate it so that it actually does a cleansing process when it gets close to full, with pressure sensors in there to monitor how full the particulate trap is. Once it reaches a certain point, it goes through a regen process that cleans it out and allows airflow back into the system and restores it to its normal operating state. But there's not a whole lot of extra maintenance required because of that system, and I'm surprised that people would be scared off by it."

In the end, Isuzu's commitment to offering its customers a gasoline option is just as courageous as Chrysler LLC's commitment to a diesel-only lineup. Both decisions come from a desire to give the customers what they want, and every customer wants the vehicle that's just right for them.

To see the results of our "Gas Or Diesel" readers' poll, go to www.fleetmag.com

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