ATDynamics Works to Reduce Drag in the Slow-to-Change Trucking Industry

11/1/11Follow @wroush

Semi-trailers suck. Literally. As these boxy shapes barrel down the freeway, they leave a vacuum in the air behind them, and this area of turbulence and low pressure generates suction that accounts for at least a quarter of all aerodynamic drag on a tractor-trailer rig. If you could do something to disrupt the vacuum and reduce the drag, then the truck engine wouldn’t have to work as hard to maintain highway speed, and you’d save a lot of diesel fuel.

Those are the facts of physics, anyway. Whether the facts can be translated into a real business is the question that ATDynamics is now testing. The South San Francisco, CA, startup, which was born as part of a business plan competition at Dartmouth’s Tuck School of Business in 2006, sells a collapsible tail for semi-trailers that’s designed to smooth out the air flow behind a trailer, reducing drag and improving fuel efficiency by 6 to 7 percent.

ATDynamics founder and CEO Andrew Smith says rigs with the $2,000 “TrailerTail” burn 8 gallons less fuel for every 1,000 miles driven. Suppose diesel costs you $3.75 per gallon at the pump-you’d only have to drive your TrailerTail-equipped trailer about 66,000 miles to earn your money back. “If you’re driving over 25,000 miles a year, this becomes a no-brainer,” says Smith. (For a different take on making trucking more efficient, see this story today by my San Diego colleague Bruce Bigelow.)

So far ATDynamics has sold more than 5,000 TrailerTails—mostly to commercial fleets, but a few to individual owner-operators. This month, Smith set a goal of shipping another 50,000 tails by 2014. While that’s an ambitious target, it would still represent only a 2.5 percent penetration rate, given that there are 2 million semi-trailers on U.S. roads.

The trucking industry is notoriously slow to adopt new technologies. But with fuel prices unlikely to come down, and with more companies demanding that their shippers use green technology to reduce carbon emissions, Smith reasons that the economic incentives to trucking fleets to install TrailerTails and their close cousins, trailer skirts, will become irresistible.

“Four years ago, I went and sat down with the senior vice president of engineering at one of the top U.S. trailer manufacturers,” he recounts. “I presented all this stuff about rear-drag aerodynamics, and he responded that they had been building square boxes for 50 years and they planned to build them for another 50 years, and that was the end of the meeting. But in the last two years, the market for trailer skirting has taken off—from a couple thousand units in 2009 to 60,000 or 70,000 this year—and trucking companies now get that trailers can be modified to be more fuel-efficient. I would be shocked if in the next five years, the majority of fleets don’t have rear-drag technology.”

Here’s a 24-second video showing how the TrailerTail works; story continues below video.

So how did we end up with two million semi-trailers in the form of giant boxes—”the least aerodynamic shape” possible, in Smith’s words? When semi-trailers were invented at mid-century, the Interstate system wasn’t finished yet, trucks couldn’t drive very fast, and the price of diesel fuel was low, Smith notes. But “now we have a world where tractor-trailers are able to maintain pretty good speeds. At 55 miles per hour, half of your fuel is going toward overcoming drag.”

Smith says he’s been dreaming about advanced transportation technologies at least since he was in sixth grade, when he bought his first Car & Driver magazine and was dismayed to discover that Ferraris and Lamborghinis get terrible mileage. “I told my parents confidently that I was going to build an electric vehicle company,” Smith says.

A series of accidents steered him toward the trucking industry instead. At Tuck, back in 2005 or so, Smith and a team of B-school classmates were searching for a transportation-related idea to enter in business plan competitions—an annual rite of passage for entrepreneurship-minded business school students. Smith had a friend named Cam Brensinger who had founded New England Mountain Equipment (NEMO), which is famous among hikers and climbers for its inflatable tents. During an ice-climbing trip, Brensinger told Smith about Kyril Calsoyas, an Arizona-based inventor, entrepreneur, and school administrator who had contacted NEMO with a concept for an inflatable device that could be attached to the back of a trailer to reduce drag. Smith’s team licensed the idea, came up with a plan for selling it, and ended up taking the 2006 grand prize at the nation’s largest business plan competition at Rice University in Houston.

Calsoyas is still an advisor to the company today, and the seed of his idea is alive. But Smith says ATDynamics has taken quite a few twists and turns on the way to building an affordable, manufacturable, street-legal product.

U.S. Department of Transportation regulations say that aerodynamic extensions for semi-trailers can extend the length of the trailer by no more than 5 feet. “The question was, how do you put this on the back of a trailer and still allow the trailer to go up to a loading bay without issues,” Smith says. With swing-door trailers, a driver who wants to back into a loading bay has to open both rear doors and swing them back 270 degrees until they’re flush against the side of the trailer itself. It turned out that the only arrangement that fit all these requirements was a hollow, tapered, four-sided box that’s rigid and extended on the highway, but also flattens into a space so thin that it doesn’t stop the doors from opening all the way.

Designing for that kind of collapsibility was essentially a geometry problem—and Smith says he spent hours on his living room floor, cutting, folding, and taping pieces of cardboard until he had his first working model. (He still keeps it on his office desk today; it resembles a school-cafeteria milk carton.) Once the basic shape was established, he says, it took the startup two years, $2 million, and 15 to 20 prototypes to identify the best materials and get the design working in real life. In the final TrailerTail, the outer panels consist of woven fiberglass and plastic resin, held open by aluminum struts. “The biggest hurdle was having a design that would endure hundreds of thousands of miles of bouncing around on the highway, at temperature extremes from Death Valley to northern Canada, with drivers who occasionally forget to shut the TrailerTail and back it into walls,” Smith says. (The origami-like design collapses automatically under these circumstances.)

Simulations using computational fluid dynamics software had predicted that the hollow, tapered shape of the TrailerTail would smooth out the lines of air flow around a semi-trailer, preventing 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.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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