Categorized | Green, Trucking Technology

California Reefer Rule Sparks Retrofits

Posted on 11 June 2009 by Rhonda Flathman

Time is running out on bringing reefer units into compliance with California's new emissions regulations, and many fleets are scrambling. With the cost of retrofitting the unit in the thousands of dollars, some companies have procrastinated, hoping for an appeal to delay spending the money especially in these tough economic times. The state's law will be enforced beginning July 17, 2009.
Truckers who pull refrigerated trailers into and around California have less than two months to prep for a rule that requires the small diesel engines that power older reefers to meet a state emission standard. Hope that the California Air Resources Board’s rule would not actually take effect, concern about potential costs and in some cases a lack of awareness led to widespread indifference to the mid-July deadline. Procrastination has given way to a frenzied realization that time is running out. “It has sort of become a fire drill,” David Kiefer, an engineer for refrigeration manufacturer Carrier Transicold, said. “If it cost $100 to comply, it wouldn’t be an issue, but you had fleets waiting to see if the [feds were] going to say no to CARB.” Ultimately, the U.S. Environmental Protection Agency decided to issue the waiver the state needed. The only result was to force CARB to postpone its first compliance deadline by a little more than six months — to mid-July. Now, considerable buzz surrounds the reefer rule — it was a hot topic at the Mid-America Trucking Show in March — and opinions differ on the best course of action, equipment manufacturers and industry participants said. Effective July 17, all refrigeration units of model year 2001 and older running on California highways must meet particulate restrictions not unlike those on new-truck diesels. CARB has estimated as many as 75,000 reefer trailers are affected. Fleets can comply in a variety of ways, from dedicating their better trailers to California runs to putting remanufactured engines in the reefers or retrofitting diesel particulate filters on current engines. And more deadlines are coming in succession, based on younger model years. Compliance of model year 2002 is required by this coming Dec. 31. “There is quite a bit of urgency,” said Evan Ypsilantis, vice president of sales at Rypos Inc., a manufacturer of a diesel particulate filter that can be fixed to older reefer engines and bring them into compliance. Though there were rumblings of an appeal of the CARB rule, deadline aversion won’t be helpful. “The reality is CARB is operating legally,” said Joe Rajkovacz, regulatory affairs specialist for the Owner-Operator Independent Drivers Association. “It has the authority to do what it’s doing, and from my standpoint, that is what everyone is missing. A lot of the folks have had a certain sense of denial.” He said many of his members are struggling with the timing of the rule’s enactment: “Many feel like they’re getting kidney-punched in this down economy.” Based on conversations at MATS and elsewhere, Kiefer found some fleets have been ready for a while, but others are either unprepared or simply uninformed. “Quite honestly, some fleets are just becoming aware that there is legislation,” Kiefer said. “Some are aware but don’t have the money to comply. A couple of fleets that don’t run in California don’t care. And some fleets were ahead of the curve and ready two years ago. They’re going into this in pretty good shape.” Knight Transportation of Phoenix is ready. Dave Williams, vice president of equipment and maintenance, said the firm refreshed its refrigerated fleet several years ago with new units, and the oldest are turning five — which gives them another two years’ grace. The CARB rule requires replacement of reefer power units every seven years. “The real impact for us will be on used reefer values,” Williams said, because most buyers will know that the retired equipment will need an upgrade. Williams said he sees suppliers pushing new engines for the older units and many fleets choosing that option over filter retrofit. Installing a diesel particulate filter runs “around $3,500 to $4,500, while a new engine for a reefer unit will cost around $7,000,” Williams said. “But with a new engine, you’ve got something that should last 10,000 to 15,000 hours.” Everyone struggling in this harsh economy — especially owner-operators and small fleets — is watching every penny. For them, a retrofit filter or remanufactured engine — among the least-expensive options — may provide the best immediate solution. “We’re selling a lot of filters,” said Ypsilantis, noting that a Rypos filter kit costs about $4,000, but the price can fluctuate, depending on purchase volume. Scott Bates, an engineer at Thermo King, which shares the reefer market with Carrier Transicold, said his company offers retrofit kits that bring its older engines into compliance. Installation can cost $8,000 to $9,000, with parts and labor included, Bates said. But the total cost of retrofit will vary with differences in the age of the original unit and the type of original engine. The refrigerator also may need a new compressor, battery or additional software, which would increase the price. Bates said Thermo King has tried to structure pricing to address this uncertainty. “We’ve elected to offer the kit as a series of part numbers, so people aren’t buying what they don’t need,” he said. Thermo King will accept trades and, in some cases, outright purchase used items to help customers defray costs. A key lure to retrofitting particulate filters is lower cost, but some customers are dubious, because in the long run, maintenance costs on the engine likely will increase. For well-worn power plants on otherwise sound reefer units, a new or remanufactured engine provides another solution. Kiefer said he believes a business case can be made for a new or reman engine if there’s a lot of life left in the reefer. “You need to look at your units, your hours, and if they’re still in pretty good shape, you may want to just repower them,” he said. “We have customers who are using the reefer part time because they’re backhauling dry. They’re only putting 1,000 hours on per year, so at end of seven years, it’s pretty lightly used. They’re probably better off replacing the reefer engine.” Kiefer said Carrier Transicold is limiting retrofit kits to its most popular units. “We have developed kits for the biggest sellers, but you can’t always have a retrofit for everything,” he said. “We are looking to go back to about [model year] 1993, give or take. That’s a 16-year-old unit that you’re giving another seven years of life.” Factoring in vehicle downtime, the silver lining may be the limited time needed to complete a retrofit. Ypsilantis said his company’s filters can be installed in three to four hours, sometimes less. “Some guys are doing them in two hours; they’ve gotten a lot better at it,” he said. Installing a new engine may take eight hours of labor, or about one day in the shop, according to Carrier. Finding someone to do it may become problematic, though. Kiefer cautioned that fleets may find service bays crowded as the deadline draws near. “There are a finite number of refrigeration technicians out there,” he said. “Swapping a unit out is pretty straightforward, but it’s just like a car dealership: You’re fine as long as the dealer is sitting there with no other service work. Otherwise, there are limits on the amount of work they can do, and it might be hard to find labor.”
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