ATDynamics Works to Reduce Drag in the Slow-to-Change Trucking Industry
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the formation of troublesome vortices and low-pressure pockets (see diagram). And in fact, on-road tests show that trucks equipped with the TrailerTail are 6.6 percent more fuel-efficient at 65 miles per hour.
That’s roughly the same efficiency gain truckers can get from placing skirts around the underside of the trailer—another region of intense aerodynamic drag. So if you’re going to the trouble of installing skirts, whether at the factory or as a retrofit, you should also install a TrailerTail, Smith argues. And in fact, he says ATDynamics has a partnership with Transtex, a Montreal-based maker of bendy thermoplastic skirts, that gives trailer manufacturers the option of “one-stop shopping” for skirts and tails.
Today, semi-trailers with TrailerTails are being used in all of the lower 48 states, with the biggest concentration visible along I-10, the southernmost east-west Interstate. Several large trucking companies, including Werner Enterprises (NYSE: WERN), Mesilla Valley Transportation, Robert Heath Trucking, and Nussbaum, have signed up to buy TrailerTails by the hundreds to retrofit their fleets. “In stage one, it’s the early adopters who get the fuel savings and are fired up to buy a technology and move first,” Smith says. “Later in the curve, you will see fleets where truckers are refusing to pull their cargo because they don’t have aerodynamic trailers.”
Right now, the TrailerTail only works on swing-door trailers, which make up the majority of high-mileage trailer fleets, but Smith says the company is working on a top-secret design for a tail that works on roll-door trailers. That product will debut in 2012.
ATDynamics has a staff of 30 and has raised just $3 million in capital, all from individual investors. (It has also benefited from grant funding through the Department of Energy’s “Super Truck” initiative, a $240 million program intended to result in a tractor-trailer design that is 50 percent more fuel-efficient than current models.) The startup’s revenue model is about as simple as it gets: the startup makes and sells TrailerTails. But Smith says the company is “constantly thinking about next-generation business models,” including the idea of financing the installation of tails and skirts, which would bring in recurring revenues over a period of many years.
Smith confesses that it occasionally galls him to see other Silicon Valley companies collecting tens of millions of dollars in venture capital for projects such as mobile apps with essentially zero cost of goods and, arguably, little economic or environmental utility. “We are trying to do something real in the world, and we have to do it in a cost-efficient way to make it work,” he says. “We have been living on a shoestring, and we pride ourselves on how much we’ve done with little capital.”
In a business that changes as slowly as trucking, Smith says, the key is to “listen to your customers, but don’t listen too much. When we first told these guys we were going to put tails on their trailers, they said ‘It’s a terrible idea, it will never work.’ Pushing forward the innovation obviously takes a little bit of stubbornness, a belief that you can engineer your way through the problems.”