Soaring freight demand, high rates and the brisk pace of truck replacement among motor carriers in the U.S. is propelling Daimler Trucks to one of its best years.
But there are clouds on the horizon for Daimler, which as the owner of the Freightliner, Western Star, Fuso and Mercedes-Benz truck brands, must navigate trade disputes, higher tariffs and a cyclical business.
Martin Daum, global head of Daimler Trucks and Buses, runs point for the company. He discussed these issues in several sessions with reporters at this week’s IAA Commercial Vehicles show in Hanover, Germany. Here is an edited version of those conversations.
What do you think of the burgeoning global trade war?
A trade war will have no winners, just losers…. I am genuinely worried about the tendencies in the world that each and every country builds up walls and separates from each other.
I am a huge proponent of open borders. We are one globe, one people on that globe. If we work together we grow the cake. Whoever separates himself from the global markets suffers. You get a bigger share of your cake, but the cake shrinks.
We depend on the free exchange of goods, ideas and of people. The problems of the world are global, and the solutions are global.
What is the effect of increased tariffs on your business?
The steel and aluminum prices skyrocketed, especially in the U.S. making our trucks more expensive there. In the end it is not so much the company that suffers, it is the consumers because ultimately transportation might become more expensive. That will ultimately impact consumer prices on the shelves.
Will we see the automated driver-assistance system unveiled for the new Mercedes-Benz Actros heavy-duty truck on a future Freightliner Cascadia?
You can be certainly sure that nearly everything you have seen today you will see on the streets of the U.S., but I am not telling you when. Things are sometimes closer than they appear.
Are their regulations in North America that need to be changed to bring things like the MirrorCam, which replaces side-view mirrors with cameras and screens?
We are lobbying for those things because we see a certain benefit to it. We always have to adapt these technologies to the local markets. We are in talks with the legislators to get that innovation into the states as well. Taking the mirror away not just improves aerodynamics. It increases safety because you have far fewer blind spots when you look outside the cab.
What does Daimler mean when it says it wants to make operating a truck as easy as a cell phone?
If you look today at how people treat their smartphone — I was in line at an airport and there were about 100 people waiting, and every single person was looking at their smartphone. This is a dream for every manufacturer. If you would be attached to your truck and every driver wants it — that would be something. I think the convergence of systems, entertainment, the phone and on the trucking side a lot of logistics information on the screen into one platform which is open so that hours of service could be put on that as well as telematics information, even using it in the evening as an entertainment system, that would really make it a good working space for the trucker.
How valuable is it to be part of a company that also has a passenger car division?
It helps. I see more synergies than ever between the units. There is an exchange when it comes to talent pool. Sometimes it really benefits each other if you can exchange people. It is an exchange of ideas and thinking from a completely different angle.
All lot of the problems that we have these days when it comes to electric, to autonomous, to connectivity — they certainly benefit [from taking technology and ideas] from each other.
You showed a concept for a hydrogen fuel cell van. Is this technology ready for trucks and buses?
An electric drivetrain has to be technology neutral for whatever provides the energy. We have to be flexible what type of battery we put behind an electric drive line. Then we can always exchange the battery with a fuel cell and hydrogen tanks. Why don’t we do that today? We really have good knowledge, but we don’t see the technology at the moment as ripe for the market. It works, but it is four times as expensive as a combustion bus and we don’t have a hydrogen infrastructure. If there is a market we will be there. We are fully aware of the technology, but we don’t see the timeline. We are observing the market.
Trucking and truck manufacturing are having one of the best years in recent memory. Are you worried about a cyclical downturn?
The sentiment of our customers is strong, the demand for freight is high. Freight rates continue to be high. The new trucks are always great trucks, better than the trucks that are still on the road. So you see this replacement cycle. I think the markets are, from my U.S. compass, a little too high. When we have years when the market is too high above the long-term average it foreshadows a valley. As much higher as it is [above the average] before, the deeper it will be behind. We are sold out for 2018, and we are basically sold out for the first half of 2019. This is a really strong market.
What could change a strong market?
I would say the world economy. Start a really good trade war and you could get a recession in the U.S. Higher interest rates because trucks are financed. But this is the daily environment for a senior executive at a truck company. We will deal with it.