Driving natural gas

May 13, 2014
Natural gas delivers for shippers and carriers

It is hard for the transportation industry to ignore the natural gas phenomenon sweeping North America.  Natural gas offers significant emissions reductions and operational cost savings of 30-50%, which far exceeds the benefit carriers can achieve even when using multiple trucking efficiency technologies for their big rigs.  As a result, shippers are increasingly seeking out carriers that will employ this alternative fuel, while carriers are leveraging natural gas trucks to strategically grow their business with shippers.  Given potential economic and environmental benefits, natural gas rigs in the right application offer a win-win-win value proposition to the shipper, the carrier, and for the environment.

To illustrate this shift, Procter & Gamble has pledged to have 20% of its shipments delivered by natural gas trucks by the end of 2014.  Owens Corning has partnered with several carriers as it works toward its goal of having 50% of its network miles running on natural gas by 2020.  And most recently, Lowe’s has stated a goal of replacing all of its diesel-powered fleet with natural gas trucks by the end of 2017.  With major shipping companies—and many others—making bold commitments, there is clearly a solid business case here for both parties to gain a competitive advantage.  On the carrier side, Dillon Transport has grown its business by nearly 200% via its strong commitment to LNG- and CNG-powered trucks.  Saddle Creek, Paper Transport, and many other carriers across the U.S. are seeing similar gains.

These projects and partnerships are the result of a carefully crafted program designed to provide mutual benefits to both sides.  Shippers are able to reduce supply chain costs, improve environmental performance, and limit exposure to frequent diesel fuel price fluctuations.  Alternately, carriers are able to reduce operating costs, secure new contracts with Fortune 500 companies, gain long-term agreements with customers, and, ultimately, improve their bottom line.

Over the past 20 years, my firm has helped some of the nation’s largest fleet operators successfully develop and implement heavy-duty natural gas truck deployment projects.  For carriers looking to grow with natural gas, we advise our clients to:

Understand the pros and cons of natural gas. Natural gas trucks are not a panacea; the right deployment application is necessary for fleet operators to achieve their full benefits.  Conferences such as the Alternative Clean Transportation (ACT) Expo provide an unparalleled opportunity to hear first-hand case studies from other fleets and to explore the equipment, technology, and fueling options of such a conversion.

Talk to customers about their interest in natural gas.  Bring forward-thinking solutions to existing and potential customers to provide a unique value proposition and new business development strategy.

Develop an infrastructure plan.  Find stations that can support heavy-duty fleet operations, and also consider developing your own station.  Fuel suppliers are often willing to provide the necessary infrastructure and attractive fuel pricing given the large volumes of demand from heavy-duty fleet operators.

Identify grant funding and incentive opportunities.  Fleets can benefit from available incentives at the federal, state and local levels in order to help offset higher upfront investment costs.

Shippers are more aggressively looking for carriers to haul their freight with natural gas trucks, while carriers are proving that natural gas trucks can allow them to grow their business.  Given these benefits in addition to positive environmental and domestic impacts, it’s most likely not a question of “if” but “when and how?”

Erik Neandross is CEO of Gladstein, Neandross & Associates (GNA), the clean transportation and energy consulting firm that organizes the Alternative Clean Transportation (ACT) Expo. Learn more at www.gladstein.org and www.actexpo.com.
 

About the Author

Erik Neandross | Contributing editor

Erik Neandross is CEO of Gladstein, Neandross & Associates (GNA), the clean transportation and energy consulting firm that organizes the Alternative Clean Transportation (ACT) Expo. Learn more at www.gladstein.org and www.actexpo.com.

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