June 2015

Fleet Management News & Business Info | Commercial Carrier Journal

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54 commercial carrier journal | june 2015 I n April 2011, on-highway diesel broke the $4-per-gallon mark for the first time since before the recession, double the low of $2-per-gallon just two years earlier. Fleet managers, still reeling from the effects of the economic downturn, were scrambling for answers. By 2012, there was no bigger buzzword in trucking than natural gas. Whether it was compressed natural gas or liquefied natural gas, OEMs and engine makers were ramping up for what was expected to be a game-changer for trucking efficiency. By that time, diesel had stabilized at about $4 per gallon, and no one thought it would drop soon. A handful of carriers were quick to react, converting some or most of their fleet equipment to more expensive natural gas-powered tractors to take advantage of the fuel's comparatively low cost. Many other carriers followed suit, dipping their toes in the water and getting positive results, just as the fueling infrastructure was unfolding. Other carriers were pressured into natural gas adoption by customers with aggressive environmental sustainability initiatives such as Owens Corning and Procter & Gamble. By December 2013, Class 8 natural gas truck sales had risen from nowhere to ac- count for 3.2 percent of the total U.S. and Canadian Class 8 truck market, according to FTR, an industry analyst firm that tracks equipment and freight trends. Some were calling for the natural gas truck market to skyrocket at that time, with Thomas O'Brien, TravelCenters of America president and chief executive officer, suggesting that one in four heavy trucks on the road in 2020 would be powered by natural gas. The diesel dip Over the next year and a half, diesel plummeted $1.25 per gallon, hitting a low of $2.75 in April of this year, according to the U.S. Energy Information Administration's weekly retail price index. Lower diesel costs, coupled with strides made by OEMs and engine makers to improve the fuel economy of traditional diesel- powered trucks and engines, have combined to stymie the natural gas market. "We are seeing a leveling off in activity," said Eric Starks, FTR president. "Demand for natural gas equipment is not growing, nor is it dropping. The trucking industry has been hoping for growth in this sector, and it clearly has stalled out and is not expected to make significant strides until the price of diesel fuel rises again." Given the inherent volatility in diesel prices, it is unlikely the low-cost fuel will remain at current levels for a long period of time. T. Boone Pickens, speaking at ACT Expo in Dallas last month, said as U.S. producers throttle back production, he expects oil prices to recover to upwards of $70 per barrel by the end of this Low-cost diesel has put a pinch in natural gas adoption, but will it last? By jeff crissey RealIty check ampCNG, which owns and operates public-access CNG fueling stations for heavy-duty trucks, announced its fleet of Class 8 CNG trucks has surpassed 30 million miles achieving fuel efficiency of 6.17 miles per diesel gallon equivalent, demonstrating CNG's commercial and operational viability.

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