Tankless Job: The costs of new fuel hauling

TORONTO — It’s said that every time ULSD changes handlers, another 2 ppm of sulfur is added to the mix. While it’s refiners and suppliers that are charged with keeping sulfur levels on spec, petroleum haulers are being counted on to keep the fuel compliant at the tail end of the distribution chain.

That’s placed new burdens and costs on tanker fleets since 15 ppm ULSD became a retail requirement this past October. Some large carriers have reportedly dished out thousands of bucks for new equipment in order to segregate ULSD from other petroleum products with much higher sulfur content like jet fuel, kerosene, and off-road diesel.

Others, like Concord, Ont.-based liquid bulk fleet Foss Transport, have been made to follow stringent tank flushing and loading guidelines between every load in order to mitigate contamination.

Some diesel haulers are hoping they can get away with
trucking the new fuel behind gasoline to avoid redundant costs

“A tanker will interchange between gasoline and ULSD several times a day,” says president Gord Foss. “At the loading rack the trailer gets drained dry at every load … when higher-sulfur products like jet fuel are carried, a gasoline load is hauled in between, before a ULSD run, with typical draining procedures after each (stage).”

Not only are there additional labor and logistical costs, but some payload is lost at every drain interval, too. “The flushing is a big deal because someone has to pay for that product that’s flushed. No one thinks they should be paying for it, but in most cases it’s the carrier who does,” says Foss.

Logistically, some carriers can’t drain dry prior to every load and are asking customers if they can load ULSD behind product already low in sulfur like tier-two gasoline, which averages between 30 and 40 ppm.

New York-based transportation analyst firm Bear Stearns describes how one large tank outfit in the U.S. told its customers it can do just that with almost no residual contamination.

“The fleet is asking its customers to allow it to load ULSD behind gasoline, ethanol, and biodiesel (while) higher sulfur products like aviation gasoline, jet fuel, and kerosene will have segregated trailers,” says Bear Stearns.

By their estimation, Bear Stearns says any restrictions prohibiting the loading of ULSD behind gasoline will result in a 5-percent increase in diesel linehaul rates to cover the costs of additional trailers, lost utilization, and mid-shift trailer switching.

— (Check out today’s lead online story, ‘Free Flowing,’ for an analysis on the transition to ULSD and life after).

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