Fuel is now the highest or second-highest expense for motor carriers after driver compensation, depending on the size of the fleet.
With dramatically lower prices for natural gas, along with increasing supplies and general availability, there is a growing interest among many in the industry to convert their fleets to natural gas rather than diesel.
"There's a lot of interest not just for local use, but for long-haul operations because it's so much cheaper than diesel fuel," said Bob Costello, chief economist of the American Trucking Associations, during the recent U.S. Chamber of Commerce Foundation's Quarterly Economic Roundtable, as cited by Oil & Gas Journal.
Natural gas playing a big role in the industry
Natural gas is more prevalent than ever, thanks to increased domestic drilling and new extraction techniques. It is also more affordable than diesel, making it an attractive alternative for organizations that use millions of gallons of fuel per year. Newer methods like hydraulic fracturing, commonly known as fracking, contribute to the boost in U.S. production and enhance the availability of natural gas domestically.
As more firms voice an interest in using natural gas, more energy companies are looking to offer increased options to commercial and private fleets, according to The Houston Chronicle. The source reported Shell Oil and Travel Centers of America are planning to add natural gas pumps at 100 truck stops across the country, opening up fleets' access to the non-diesel fuel.
Beneficial for firms
Increased availability and access to natural gas within the existing fleet fueling infrastructure makes it easier for companies to consider transitioning at least some of their vehicles to the alternative fuel. Having a viable option for fleet fueling will help more firms control the damaging effect that volatile diesel pricing has had on their profitability in the recent past.
Using available fuel expense reduction technologies, such as route optimization software to reduce wasted miles and fuel purchase optimization tools that direct drivers to lowest cost diesel fueling locations, can all help dramatically to keep operating costs under control. With increasing unpredictability in the price of diesel fuel, more fleets may choose to transition at least some of their assets to make use of natural gas in regions or along routes where they are confident of its availability. The relative pricing stability expected for natural gas holds significant business appeal for many fleet operators.