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February 19, 2015 12:20 PM, EST

Cost of Diesel Shouldn't Deter Fleets From Alt-Fuel Vehicles, Industry Execs Say

NASHVILLE, Tenn. — The current lower cost of diesel fuel should not deter fleets from purchasing alternate-fuel vehicles, a panel of industry executives said at a session of the Technology & Maintenance Council annual conference here.

Using the right strategy, motor carriers who purchase natural gas and other alternate-fuel vehicles can get a good return on investment and also gain business from shippers wanting green fleets to haul their goods, the executives said.

Erik Neandross, CEO of the consulting firm Gladstein, Neandross & Associates, said that his company has assisted truckers in finding ways to purchase natural gas and other alternate-fuel vehicles through federal, state and local grants, as well as with rebates and tax incentives.

“As you know, these trucks are expensive, the stations are expensive and the shops can be expensive,” Neandross said at a Feb. 17 technical session entitled “Green Trucks, Green Shops, Green Incentives.”

Financial assistance helps offset the cost of the purchase of alternate-fuel programs, Neandross said.

Using cheap diesel and more expensive diesel cost comparisons, Neandross concluded that that the natural-gas trucks save 45% in fuel costs over diesel when the diesel price is high and 25% when diesel is low.

Neandross said that natural-gas tractors are about $65,000 more expensive to purchase than diesel. But with a $25,000 purchase grant or other incentive, it takes two to three years to get a return on investment. Without the financial assistance, the return on investment of a natural-gas vehicle is about 4 1/2  years, he said.

“So in the low-fuel price environment, the grants ... are particularly important to help keep these projects moving and allow these investments to be continually made,” Neandross said.

Panelists from UPS Inc., Coca-Cola Co. and Ryder System Inc. also indicated they have had  generally positive results adding alternate-fuel vehicles to their fleets.

Duane Lippincott, a senior project manager for UPS, said his company has 5,000 alternative-fuel trucks.

“We don’t believe there is any blanket solution for replacing petroleum,” Lippincott said. “UPS is fuel-neutral.”

He added, “We prefer to not rely on any financial aid in justifying the vehicles. We believe they need to stand on their own.”

UPS’ “rolling laboratory” is testing virtually every type of alternate vehicle and plans to log 1 million miles with the alternate-vehicle fleet by the end of 2017, Lippincott said.

“There is no one-size-fits-all in terms of alternative-fuel vehicles,” Lippincott said. “There is no clear answer. It depends on the year, the make, the model and the technology. But they all make a difference in the maintenance cost.”

Lippincott said fuel savings is not the only advantage of alternate-fuel vehicles.

“You’ve got to look at what the technology gives you as an emission advantage and what it gets you as a competitive advantage,” he said.

Ryder fleet manager Art Trahan said his company has 985 natural-gas tractors.

Trahan discounted many of the rumors of problems, such as underpowered engines, fuel tank dangers, driver discontent, fuel range and residual value risks.

Tony Eiermann, manager of asset and value management for Coca-Cola North America, said the beverage giant has 738 hybrid electric trucks and 58 hydrogen fuel cell vehicles in its delivery fleet.

The company has implemented a “Smart Driver” program to teach drivers of alternate-fuel vehicles to accelerate and brake slowly, maintain the truck’s momentum, avoid excessive idling, drive in the correct gear and minimize the use of the air conditioner.

Neandross said that with tougher ozone standards set to take effect in October, the number of nonattainment air quality counties in the United States will double.

Although trucks will be targeted for air quality reductions, more federal and state money will be available, he said.

“Given that you’re going to be the target, you’re going to be the first in line to receive funding,” he said.