Port of Long Beach and Port of Los Angeles commissioners voted Thursday to approve three-year Clean Trucks Program loan and lease-to-own agreements with Daimler Truck Financial that will help trucking folks buy 2007-compliant diesel or alternative fuel vehicles.

The contracts were negotiated over several months by the two ports and the company. Due to the differences in their programs, each port approved its own contract with Daimler. In Los Angeles, only licensed motor carriers are eligible for the program. In Long Beach, the program is open to both companies and owner-operators.

The two ports will guarantee all leases in case of default.

At the end of the seven-year lease, the residual value of the truck is expected to be about 16 percent of its new cost. The lessee will have the option at that point to purchase the truck by paying half the residual value.

Drivers or companies participating in the lease-to-own program will have to agree to certain “operational requirements” such as only operating the truck in California, having at least 50 percent of the travel within the trade corridor, making at least 300 trips per year to the San Pedro Bay Ports in the first four years, traveling 350,000 miles or committing to an eight-year term of service, allowing installation of an automatic vehicle locator so the movements can be monitored and to “periodically report certain information.”

If a truck lessee is not able to keep up payments, the port plans to have another lessee standing by to take over the lease in what is called a “slip-seating” process. Daimler will invoice the port a $1,500 fee for each truck that is slip-seated to a new lessee.

In addition to the lease-to-own program, a trucking company (or owner-operator in Long Beach) can choose to just take out a loan for a truck. They are not obligated to go through Daimler to do so, but only to give the company the right to first review. Purchase loans will not be guaranteed by the ports.

The National Advertising Division of the Council of Better Business Bureaus has recommended that Daimler Trucks North America, LLC (DTNA) discontinue or modify certain advertising claims for the company’s Freightliner Cascadia tractor trucks. However, NAD determined that the monadic claim “We were able to fine-tune the truck’s design to maximize aerodynamics and fuel economy” is supported by the evidence in the record.
NAD, the advertising industry’s self regulatory forum, examined DTNA’s print and Internet advertising following a challenge by International Truck and Engine Corporation (renamed Navistar, Inc.), maker of ProStar Trucks, a competing line of tractor trucks.
Print and Internet advertising claims included:
– “We have more than the most fuel efficient design…its official. Cascadia is the most aerodynamic truck on the planet…And a truck with less aerodynamic drag means better fuel efficiency and savings at the pump.”
– “Auto Research Center (ARC), and independent company…has reviewed and validated these results.”
– “[Using Cascadia Trucks] could save customers as much as $950 to $2,750 a year per truck.” (Superscript: “based on 7.8% less drag”)
– “‘My overall conclusion from this test is that based upon the results, the Freightliner Cascadia is the most aerodynamic of the five tractors tested,’ said Mike Camosy, ARC operations manager.”
– ARC researchers compared the Cascadia with four other similarly spec’ed [sic] Class 8 vehicles.”
NAD also examined claims made in internal sales-related training documents. NAD noted at the outset that internal documents constitute advertising in that they are used to provide salespeople with information they can use to explain to potential purchasers the ways in which Cascadia is superior to competing trucks. The claims included:
– “Industry leading aerodynamics…[with] advantages in ALL areas of this truck when compared to our competitors….our aerodynamic superiority over every truck now in the market place is where you can show your customers the biggest cost savings of all.”
– “We were able to fine-tune the truck’s design to maximize aerodynamics and fuel economy.”
– A table with Cascadia listed as the most fuel efficient, International ProStar as the second most fuel efficient at +$948 more in fuel use, as well as Volvo, Kenworth and Peterbilt in the 3rd, 4th and 5th place.
– “ARC, an independent company…has reviewed and validated these test results.”
The main issue in this case is the truth and accuracy of the advertiser’s superior fuel savings claims. The advertiser presented evidence based on proprietary aerodynamic testing that was used to estimate the fuel savings that customers can expect to achieve. The challenger’s rebuttal evidence consisted of the results of SAE Type III and Type IV testing, which it argued are industry standard tests to determine the fuel efficiency of trucks.
Given the quantified nature of the fuel saving claims and the fact that NAD found certain aspects of the advertiser’s test methodology did not fully reflect real world conditions which can impact on a truck’s actual fuel consumption and, by extension, fuel efficiency, NAD determined that the advertiser did not provide a reasonable basis for the following claims and recommended that they be discontinued: 1) “We have more than the most fuel efficient design….it’s official. Cascadia is the most aerodynamic truck on the planet…And a truck with less aerodynamic drag means better fuel efficiency and savings at the pump”; 2) “[Using Cascadia Trucks] could save customers as much as $950 to $2,750 a year per truck.” (Superscript: “based on 7.8% less drag”); 3) “Industry leading aerodynamics…[with] advantages in ALL areas of this truck when compared to our competitors….our aerodynamic superiority over every truck now in the market place is where you can show your customers the biggest cost savings of all”; and 4) a table with Cascadia listed as the most fuel efficient, International ProStar as the second most fuel efficient at +$948 more in fuel use, as well as Volvo, Kenworth and Peterbilt in the 3rd, 4th and 5th place.
As for the monadic claim “We were able to fine-tune the truck’s design to maximize aerodynamics and fuel economy,” NAD determined that it was supported by evidence in the record.
With regard to the claims “Auto Research Center (ARC), an independent company…has reviewed and validated these results” and “ARC researchers compared the Cascadia with four other similarly spec’ed [sic] Class 8 vehicles,” NAD recommended the advertiser modify these claims to make clear that ARC did not verify the advertiser’s results but simply independently concluded that Cascadia had the least amount of aerodynamic drag of the trucks tested.
In its advertiser’s statement, DTNA stated it Daimler Trucks North America LLC (DTNA) appreciates NAD’s careful consideration of this matter and that while it believes “NAD did not adequately understand the nature of certain technical information submitted with DTNA’s responses,” it would nonetheless “modify its advertising accordingly.”
NAD’s inquiry was conducted under NAD/CARU/NARB Procedures for the Voluntary Self-Regulation of National Advertising. Details of the initial inquiry, NAD’s decision, and the advertiser’s response will be included in the next NAD/CARU Case Report.
About Advertising Industry Self-Regulation: The National Advertising Review Council (NARC) was formed in 1971 by the Association of National Advertisers, Inc. (ANA), the American Association of Advertising Agencies, Inc. (AAAA), the American Advertising Federation, Inc. (AAF), and the Council of Better Business Bureaus, Inc. (CBBB). Its purpose is to foster truth and accuracy in national advertising through voluntary self-regulation. NARC is the body that establishes the policies and procedures for the CBBB’s National Advertising Division (NAD) and Children’s Advertising Review Unit (CARU), as well as for the National Advertising Review Board (NARB) and the Electronic Retailing Self-Regulation Program (ERSP).
NAD and CARU are the investigative arms of the advertising industry’s voluntary self-regulation program. Their casework results from competitive challenges from other advertisers, and also from self-monitoring traditional and new media. The National Advertising Review Board (NARB), the appeals body, is a peer group from which ad-hoc panels are selected to adjudicate those cases that are not resolved at the NAD/CARU level. This unique, self-regulatory system is funded entirely by the business community; CARU is financed by the children’s advertising industry, while NAD/NARC/NARB’s sole source of funding is derived from membership fees paid to the CBBB. ERSP’s funding is derived from membership in the Electronic Retailing Association. For more information about advertising self regulation, please visit www.narcpartners.org.