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NATURAL GAS: Saddle Creek ponies up for CNG Freightliners

HOUSTON, Texas -- Saddle Creek Transportation has embarked on an ambitious plan to convert its fleet to natural gas, and is already reaping substantial benefits.

HOUSTON, Texas — Saddle Creek Transportation has embarked on an ambitious plan to convert its fleet to natural gas, and is already reaping substantial benefits.

Mike DelBovo, president of Saddle Creek Transportation, outlined his company’s progress during a presentation at the Natural Gas Fleet Vehicles North American Congress in Houston today. The Lakeland, Fla. company runs 380 over-the-road tractors and operates 26 facilities in the southeastern US, where it operates 15 million square feet of warehouse space. It stores and ships products for major retailers including Walmart, Lowes, Office Depot and Disney. The fleet’s foray into natural gas was borne from a desire to help its customers achieve their environmental objectives.

“We sat down with our leadership team and said ‘What can we do to drive customer value?’,” DelBovo explained. “Our largest cost is fuel, so that was the one element that we could have an impact on in helping our customers save money. We started with a very customer-centric focus.”

Saddle Creek teamed up with Freightliner to build its first-generation compressed natural gas trucks; Business Class M2s with the Cummins ISL9 G engine. The first phase of the project included 40 CNG tractors with a fuel capacity of 130 diesel gallon equivalents (DGE), giving them a range of about 500 miles.

Almost as soon as it began taking delivery of its first CNG trucks, DelBovo said the carrier was already looking at opportunities to improve the design and remove weight from second-generation vehicles. The next round of trucks had a fuel capacity of 140 DGE and were more fuel-efficient thanks to aluminum rims, wheel covers and improved aerodynamics. Sixty second-generation trucks have been placed into the fleet, hauling payloads of 49,000 lbs (80,000-lb GVW) on dedicated runs across Florida and other southeastern states.

Saddle Creek installed both fast- and slow-fill fuelling stations at its yard and can serve its entire territory from Atlanta to Miami using its natural gas vehicles. It relies on a Clean Energy fuelling station in Atlanta. Saddle Creek also has purchased a CNG-powered Capacity terminal tractor, but DelBovo said it has to run three shifts a day to deliver a payback. The over-the-road tractors, on the other hand, are profitable averaging just 400 miles per day.

DelBovo said Saddle Creek is earning a payback on its CNG Freightliners in about four years. He’s hoping to run the trucks for 10 years and keep the tanks for even longer, because he’s uncertain about what the resale market will look like for the vehicles.

“We plan to keep the trucks for 10 years because I don’t know what the resale is going to be,” DelBovo admitted. He said tank manufacturers have told him they can be used for up to 20 years.

The benefits of running natural gas have been significant enough that the company plans to add another 200 CNG tractors by 2014. But that’s not to say the conversion has been without challenges. DelBovo said one of the biggest challenges was getting its fuelling site set up and working effectively while navigating the permit process with local governments. Permitting is “a big time-burner,” DelBovo said, adding a cooperative county commission made those hurdles easier to clear and in most cases granted approvals within 24 hours.

The other challenge was educating customers on the benefits of CNG, convincing them to pay for their share of the investment and determining appropriate fuel surcharges.

“A lot of customers have heard of natural gas, but they don’t know what it means,” DelBovo said. “They would love to have it done for free with no investment on their part. It took some frank discussions with customers on what it costs. The trucks are expensive and the (fuelling) stations are costly to own and operate.”

Saddle Creek has customized four different fuel surcharges for four customers, each unique depending on the requirements and risk tolerance of the customer.

“Coming up with a good fuel surcharge program is really key,” DelBovo said.

Driver training was also required, both for operating and fuelling the trucks.

Drivers are put through 2.5 hours of in-class training, 1.5 hours hands-on training with the truck and fuelling station and then spend a day-and-a-half with a driver trainer. They must prove their ability to achieve 5.5 mpg before they’re certified to run the CNG trucks. When they complete the task, they’re given a shirt with their name on it, recognizing them as certified operators.

“Drivers are very proud when they’re finally certified to drive these CNG trucks,” DelBovo said.

Saddle Creek has enlisted its drivers as ambassadors to help spread the word of the benefits of natural gas. Each truck carries a laminated list of frequently asked questions, so drivers are well versed on the technology when questioned by shippers.

One unforeseen hiccup when the trucks hit the road was that they were frequently pulled into the scales so curious inspection officers could have a closer look.

“That didn’t really help my productivity very much,” DelBovo quipped.

Another consideration is that seemingly small collisions can be costly.

“It’s really expensive when someone bumps into one of these trucks,” DelBovo said. “Any small incident turns into something expensive.”

So far, Saddle Creek has put three million miles on its CNG tractors, reducing its carbon footprint by 11.4 million pounds per year. With every weight-saving spec’ possible, the tractors now weigh just 600 lbs more than the company’s diesel-powered Mack day cabs. The 9-litre engine has no trouble pulling full weights, but DelBovo noted the company runs mostly flat terrain.

Fuel mileage is about 10% worse than diesel, but DelBovo said “If we hit 5.5 mpg, we will get the savings we need.”

Perhaps most importantly, DelBovo said the trucks are doing what they were supposed to do: delivering value to Saddle Creek’s customers.

“They exceed our customers’ sustainability goals,” he said. “And our ROI includes sharing the savings with our customers.”

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