One of the most expensive aspect in the logistic indicators is the price of the fuel used in the fleets.
In December of 2016, Scott Perry, who is chief technology and procurement officer at Ryder Global Fleet Management Solutions, wrote an article in APICS Magazine about how this decision is fueling to make the switch.
Quote the relevant point of the publishing:
These days, most people at the pump are celebrating the continuation of inexpensive oil. However, many transportation and logistics professionals are cursing the low prices because they complicate the choice between diesel and natural gas as well as related fleet equipment-purchasing decisions.
Of course, today’s low diesel prices will not last forever. Furthermore, from year to year, emissions rise and fall because of changes in the economy, the price of fuel, weather, and other factors. No matter the current state, being fuel efficient is a key performance indicator for natural gas vehicles (NGVs).
Smart fleet managers focus on miles per gallon all the time, one fleet at a time. They think about the longer-term benefits of switching truck fleets to natural gas. Potential benefits include fewer carbon emissions, a lower price per gallon, and public recognition that you are doing your part to help reduce greenhouse gas (GHG) and carbon dioxide emissions.
Transportation and logistics professionals have an important role to play. In fact, the US Environmental Protection Agency reports that the US transportation sector is the nation’s second-largest contributor of GHG emissions, accounting for 26 percent from 1990 to 2014. The total rate for 2014 was 6,870 million metric tons of carbon dioxide equivalent (MtCO2e), with medium- and heavy-duty trucks composing 23 percent of that segment. Emissions by these trucks increased 76 percent during that time—much more rapidly than that of passenger cars.
Compressed natural gas (CNG) vehicles produce 40 percent fewer GHG emissions than diesel and 80 percent fewer GHG emissions than certain renewable natural gas (biomethane from landfills) vehicles. However, because oil prices have fallen, diesel trucks cost the same as CNG vehicles to operate, so fewer companies are making the switch. In the long term, CNG trucks should be less expensive.
Other alternative fuel sources for commercial transportation, such as propane, also are evolving. There is evidence of propane gaining traction in the lighter- and medium-duty industry, but CNG continues to find applications across the entire portfolio of passenger; light-, medium-, and heavy-duty; and commercial vehicles.
Ryder is a provider of transportation and supply chain management products, including critical fleet functions, for more than 50,000 customers. Its NGV solutions for the commercial transportation industry encompass more than 100 million miles of experience, 22 NGV maintenance facilities, and more than 5,500 NGV-trained maintenance and support personnel. Along the way, the company has eliminated 35,269 MtCO2e GHG emissions and replaced approximately 15.4 million gallons of diesel fuel with lower-emission, domestically produced natural gas.
Ryder was an early mover toward natural gas because company leaders believe it is part of an energy-diversification strategy that will drive the continued evolution toward more advanced fuels. The company has deployed its NGVs into customer fleets in 16 US states and two Canadian provinces. To offer renewable natural gas—the cleanest fuel available today— Ryder also operates liquefied-to-compressed natural gas fuel stations at two service locations through a partnership with Clean Energy Fuels.
A greener green
UBCR is one company enjoying the long-term benefits of Ryder NGVs. This Michigan-based beverage container recycler has a container recovery rate of 97 percent, the highest in the nation. Its role in the deposit system is to collect, transport, and process empty beverage containers for large retailers. UBCR picks up more than 100 million cases from more than 600 stores and 100 wholesalers.
UBCR has operated its Ryder NGV fleet across more than 7 million miles since 2011. The business has reduced its GHG emissions by approximately 2,704 MtCO2e and replaced more than 1 million gallons of diesel fuel with lower-emission, domestically produced natural gas. In addition, UBCR announced earlier this year that it would be renewing its NGV lease agreement with Ryder for its entire truck fleet, becoming the first Ryder customer to transition from first-generation NGVs to the latest available technology. Now, 16 CNG vehicles, designed with the latest modifications and technological advances, are replacing the entire truck fleet.
“As a leading recycling company, this important carbon-reduction initiative complemented our long-standing growth strategy, which is grounded in sustainability,” says Nick Kronsbein, general manager for UBCR. “Ryder made it easier for us to jump-start our sustainable transportation program and convert our entire UBCR fleet to abundant, clean, and efficient natural gas. In the process, UBCR has gleaned financial benefits, including gaining more control over our costs and budgets by investing in a predictable and stable fuel source, while contributing to the wellbeing of our environment.”
A matter of maintenance
News about fueling infrastructure and new technology advancements continues to capture most of the headlines, but one of the most critical—and most often overlooked—elements for a successful natural gas fleet operation is maintenance. Well-maintained vehicles reduce emissions and improve fuel consumption; thus, they are unquestionably better for the environment. To meet stringent industry and government safety standards for NGV maintenance, traditional shops must go through a modification process, and technicians must receive extensive, specialized training.
Ryder trains technicians on the latest NGV technologies in order to help develop a best-in-class workforce. In fact, in 2015, Ryder announced the launch of a new online NGV maintenance training program for its North American maintenance network. The initiative provides the company’s entire technician workforce with knowledge of a wide array of NGV platforms and configurations in order to better serve customers that commit to converting all or part of their fleets to natural gas.
One of Ryder’s first natural gas customers was Willow Run Foods, a fast-food systems distributor in the US Northeast and Mid-Atlantic. Serving customers in 14 states, Willow Run Foods provides one-stop shopping for chain restaurant operators. The company has significantly benefited from having well-maintained natural gas and diesel vehicles. It currently leases a fleet of 124 tractors from Ryder, 15 of which are CNG vehicles.
Ryder’s on-site maintenance operation and team of technicians ensure optimal fleet performance. The natural-gas-vehicle-lease component is expected to reduce GHG emissions by 500 tons and save Willow Run Foods more than $100,000 annually through a reduction of 175,000 gallons of diesel fuel consumption.
“Ryder made a commitment to provide and maintain a fleet that would ensure the integrity of transporting time-sensitive products from our facility to customer locations,” says Len Basso, vice president of operations at Willow Run Foods. “We receive quality equipment and an extended commitment that we’d never have a truck down for more than two hours.”
This certainly isn’t the first time—and it won’t be the last time—that volatile oil prices affect the alternative fuel market. As transportation and logistics professionals look to the future, energy diversification and natural gas should play major parts. More investment also should be made in commercial vehicle technologies, such as engines, fuel storage, and fuel stations. This will serve as an essential springboard for the overall success of the heavy-commercial industry.