Think again. Getting on the road to a cleaner fleet is more accessible every day.
By: Chris Nordh, Director, Advanced Fuels & Strategic Infrastructure, Ryder System, Inc.
Fleet owners, transportation managers and common carriers typically add natural gas vehicles to their fleets for two reasons: natural gas costs less than diesel and alternative fuels vehicles help companies achieve their corporate sustainability and carbon reduction goals. Moving freight to cleaner, natural-gas-powered vehicles makes sense because they:
- Help lower fuel costs
- Run cleaner and emit fewer greenhouse gases
- Are powered by a fuel that’s domestically sourced and increasingly abundant
The Challenges
Despite the fuel savings and environmental benefits, barriers to the broad adoption of naturalgas vehicles remain. Some of the challenges that keep many fleet owners from seriously considering natural gas powered vehicles include:
- Limited commercial fueling infrastructure
- High initial cost of the technology
- Vehicle range limitations
Historically, the use of Compressed Natural Gas (CNG) vehicles in commercial fleets made financial sense only for higher mileage applications (say 80,000 miles or more.) It all comes down to math. The more miles vehicles operate, the more likely fuel cost savings will offset the initial vehicle investment, which can be prohibitive for some fleets.
The Solution is In the Tank
Because of these barriers, there’s a misconception among some fleet owners that natural gas-powered vehicles are financially out of reach. The good news? All that is changing. In terms of cost, one way to make natural gas work is to lease alternative fuels vehicles.
Leasing eliminates the significant upfront investment and risks associated with purchasing natural gas vehicles (for example unknown maintenance costs and residual values.) By partnering with a transportation services provider that has taken steps to further reduce costs, companies can save even more.
Here’s how. Natural gas tank storage systems are among the most expensive components in a natural gas vehicle. So it follows that if you can lower the cost of the tank storage systems, the overall cost of owning/operating the vehicles will be lower. That’s exactly what some smart transportation providers are doing. They’re helping design CNG fuel tank storage systems to make them more efficient, purchasing the systems directly from manufacturers and installing the tanks on CNG-powered vehicles themselves. Then, they’re passing the savings on to customers who lease the vehicles.
This approach eliminates a large chunk of the cost of natural gas vehicles. Now, where natural gas vehicles once made financial sense only for higher-mileage applications, they’re viable for shorter haul transportation. Meanwhile, the storage systems are more reliable, which extends vehicle uptime, and lighter, which enables the trucks to transport more payload and maximize vehicle profitability.
Written by Chris Nordh. Chris is Director, Advanced Fuels & Strategic Infrastructure at Ryder System, Inc. Nordh has more than nine years of experience in the fuel & alternative fuel industry and has played an active role in developing Ryder’s advanced fuels strategy and product offering
