With its promises of low cost and abundant supply, natural gas is attracting a lot of attention as a fuel for commercial truck fleets. Add in substantial carbon reduction benefits, and NG looks like it offers an almost irresistible combination of economic and environmental benefits. In the real world, though, while those benefits are real, so are some substantial qualifications or “buts” that must be considered.
Saddle Creek Transportation, a regional OTR fleet supporting warehousing and other logistics services largely centered in the Southeast, has taken a hard look at those often underestimated issues that can make or break successful use of NG. Its conclusion? Given the right strategic vision, the right operations, the right investments, the right equipment, and most importantly, the right partners, natural gas can be an excellent heavy-duty fleet fuel.
And now Saddle Creek is putting its money behind that initial work. Today, 108 of the fleet’s 440 tractors run on CNG (compressed natural gas), with another 100 CNG tractors to be added before the middle of next year. It’s also built its own CNG fueling station at the company’s main terminal in Lakeland, FL; built a second with a partner in Georgia; and contracted with two other commercial CNG fueling stations to service its growing CNG fleet. Overall, the company has invested tens of millions of dollars in a CNG conversion plan that makes good economic sense as well as satisfies both corporate and customer sustainability goals.
Saddle Creek first got interested in NG when it began exploring potential fleet business opportunities in the gas fields of North and South Dakota. “We saw the abundance [of NG] was real, that it was going to be a viable fuel,” says Mike DelBovo, president. Moving quickly, it began exploring NG truck options and designing its first fueling station in 2011. In 2012, it took delivery of 40 Freightliner M2 tractors with 9L Cummins ISL G engines.
Not satisfied with the 500-mi. range of those first-generation trucks, it purchased another 60 M2 NG tractors.
Working with Freightliner and CNG tank maker Agility, those trucks saw extended range out to 600 mi., but DelBovo and his team still weren’t where they wanted to be. So earlier this year, 10 Freightliner Cascadias powered by the Cummins ISX G 12L engine joined the fleet. With a new tank system developed with Agility and advanced aerodynamics from the Cascadia Evolution, this third generation has a range of over 700 mi., which fits perfectly with Saddle Creek’s operational requirements. It has 45 more Cascadias coming this year and anticipates purchasing another 45 in the first half of 2014.
“When you’re engineering things for the first time, it’s exciting, frustrating and rewarding all at the same time,” says DelBovo. “But it would make a good case study in collaboration. You truly have to partner with your vendors and your customers to make it happen. And you also have to get driver buy-in to make it work.”
The key to succeeding with NG is making a positive economic case, according to DelBovo. “If we had a three-year trade cycle, that would be difficult, but we keep our trucks a long time, which allows us to take a long-term view.”
Even using conservative assumptions about future diesel and NG prices, Saddle Creek has calculated a 50-month ROI on its investment. And that’s without any government incentives.
“There are lots of hidden costs in this beyond the initial cost increase,” says DelBovo. “Maintenance costs are higher and operations are more expensive. You have additional costs for maintaining the fuel stations and for training drivers. And there’s more vehicle downtime. Even so, we’ll get that 50-month payback.”
As for sustainability, the fleet has already saved 12 million lbs. of carbon since beginning the conversion in 2012 and that will grow exponentially as it quickly adds new trucks. “We’re running an efficient green fleet,” says DelBovo. “We’re very, very happy with the results and so are our customers because we’re helping them meet their sustainability goals, too.”
