The Country for Old Trucks

EghtesadOnline: Mack trucks of 1967 are still rolling on Iranian roads. Transport trucks that should have been sent to the scrapyard years ago still fetch an exorbitant price.

News ID: ۷۴۹۷۱۷

17 February 2020

Iran Road Maintenance and Transportation Organization, the body in charge of heavy vehicles used for goods transportation, said an estimated 10,000 heavy-duty vehicles aged 45 years and above were rumbling along Iranian roads by March 2019, though the actual number is believed to be much higher, Financial Tribune reported.

A few years ago, it was announced that once the road fleet overhaul program, the so-called Key-to-Key Scheme, is launched, old trucks won’t be allowed on the roads. But with the decline in production, increase in prices and lack of financial incentives, these clunkers are not only refusing to drive into the sunset, but are also getting costlier.

On top of it, the governmental organization issues fuel cards for these old trucks to use subsidized diesel.

Today’s economic climate does not allow ambitious programs such as the fleet overhaul scheme. However, the stay of aged, clunky trucks is synonymous with offering subpar transportation services, excessive fuel consumption, air pollution and higher risks of accident, among others.

In September 2019, the Ministry of Industries, Mining and Trade announced that the fleet overhaul scheme of 200,000 aged trucks cost €11 billion over the course of three years.

The government is supposed to provide 50% of the budget needed for the program, banking resources 30% and the applicant will have to put up the rest. However, the straitened times and the depreciation of rial have put the scheme in deep freeze.

According to annual figures provided by Iran Road Maintenance and Transportation Organization, the total number of Iranian transport trucks stood at an estimated 358,000 in the last fiscal year (March 2018-19). Trailer trucks were the backbone of Iran’s road fleet with more than 146,000, followed by metal freight trucks (46,000), wooden freight trucks (45,000), six-wheeled dump trucks (24,000) and 10-wheeled dump trucks (17,000).

Out of 350,000 transport trucks operating last year, about 80,000 were above 30 years old. At present, nearly 21,000 trucks have a lifespan of between 31-35 years, 21,000 between 36-40 years, 30,000 between 41-45 years, 7,000 between 46-50 years and more than 2,000 heavy vehicles are more than 50 years old.

Ahmad Karimi, the secretary of Iran's Truck Owners Union, puts the number of the country’s aged trucks at 350,000-400,000 and says the average age of heavy duty vehicles in Iran are more than 25 years.

The overhaul of the country’s aging fleet, according to a report by the Persian-language daily Etemaad, should be the main policy to reduce fuel consumption, operating expenses and air pollution.

Estimates show old trucks using 100 liters consume 20 liters more than new, fuel-efficient trucks. Given old trucks’ years-long use, they consume hundreds of thousands of liters of more fuel than the standard consumption level.

To reduce fuel consumption, the government has two choices: either to ration fuel for trucks based on their haulage performance and fuel mileage, or raise fuel prices. The latter was implemented for gasoline-powered passenger cars in November 2019 but the importance of maintaining affordable prices for essential goods needed by people has prevented the government from raising diesel prices.

The decline in the manufacture of heavy vehicles is also to blame for the government’s failure to carry out its fleet overhaul program.

According to the Industries Ministry statistics, over the nine months to Dec. 21, production of trucks and trailers has declined by 63% to reach 3,196—the sharpest decline in the manufacture of any industrial products.

Restrictions on imports and prohibitive prices have made it difficult to meet market demand for heavy vehicles. On top of that, lack of financial facilities also prevents truck drivers from buying new trucks.

“In many European countries, banks provide 40% of the truck price in the form of loans whereas in Iran, there is no financial facility for purchasing heavy vehicles and the prices are going up by the day,” Karimi said.