However, they said that, so far, the volume of DEF sales has not been great enough to offset the cost of installation.
Another truck stop chain said it sells DEF mostly in containers.
“Love’s is on track to have bulk DEF available at all travel stops by the end of the year,” said a statement from Love’s Travel Stops, Oklahoma City, on April 10. “124 of Love’s 230 locations now offer bulk DEF at 580 lanes on the diesel islands. Drivers will have access to more than 1,300 lanes of bulk DEF throughout Love’s network before the end of 2012.”
“Everything is in underground tanks in these figures,” Jon Archard, Love’s director of fleet sales, told Transport Topics. “That is where the expense comes in — retrofitting existing locations with underground tanks.”
“We didn’t make any projections, so we can’t say whether [DEF sales are] above or below what we expected,” Archard said. “Would we like to be selling more? Absolutely. But volumes are growing every day.”
Only trucks using selective catalytic reduction to meet 2010 emissions levels need DEF — a urea-water solution. All over-the-road truck and engine producers, except Navistar Inc., use SCR.
From Jan. 1, 2010, through March 31, 2012, truck producers sold 325,255 Class 8 vehicles in the United States, WardsAuto.com reported. Navistar, which has not sold any heavy-duty trucks with SCR systems requiring DEF, sold 71,957 Class 8s in the same period, Ward’s said.
Archard said that Love’s currently charges $2.59 per gallon, except for 11 western states, where it is $2.79 per gallon because of transportation costs.
He said the 11 western states are: Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.
Pilot/Flying J also said its western U.S. prices are higher.
“We have invested about $125 million” in DEF for fuel islands,” Mark Hazelwood, executive vice president, Pilot Flying J Travel Centers, said during a conference call April 13.
“We have about a little over 1,500 lanes today; that is about a little over a third of our total lanes,” Hazelwood said. “We plan on spending an additional $50 million over the rest of the year, bringing that total up to $175 million. Additionally, we have another $25 million slated for next year.”
He said that his company, which is based in Knoxville, Tenn., has 538 travel centers and travel plazas and will add 32 new locations this year.
“For every new installation that we put in, it is approximately about $300,000” for DEF, Hazelwood said.
“As far as earning any return, I would say the volumes are not there today to get the returns that we would like with the investment that we have,” Hazelwood said.
“I agree,” Tom O’Brien, CEO of TravelCenters of America and Petro Stopping Centers, Westlake, Ohio, said on the conference call. “Today, we have around $20 million” in DEF.
O’Brien said, “But, by far, the demand for this fluid today is not, frankly, in line with the huge amount of investment.”
Both TA and Pilot Flying J executives said that their companies would continue to install DEF infrastructure.
“We are seeing that about 18% of every diesel transaction has a DEF purchase along with it,” Hazelwood said. “The average fill on DEF is about 10 gallons.”
“We range at the pump between $2.69 and $2.89 per gallon,” Hazelwood said. “All of the product has to be trucked, so obviously there are different costs involved with how far away the distribution is from a source.”
The president of Roady’s, a chain of independently owned truck stops, said its members have decided to move cautiously.
“When we went in with DEF, we were very guarded, taking a conservative approach, location by location, focusing on the business makeup of each individual shop,” Bob Lee, Roady’s president, told TT. “We saw a general mix for DEF. All Roady’s Truck Stops do offer it in 2.5-gallon jugs, and that is going very well.”
Roady’s offers the 2.5-gallon DEF container at the same price nationwide, $19.99 per container, Lee said. That translates into a $7.99 per gallon price.
Roady’s said that its members operate “nearly 300 retail locations” in 43 states.
“The margins aren’t nearly what we expected,” Lee said. “That’s why we don’t want to put a lot of investment into where we haven’t had a lot of high volume” of DEF sales.
He said that some locations are seeking less expensive ways to put DEF on fuel islands, such as 250-gallon DEF totes or overhead DEF tanks on fuel islands.