Many transportation companies are drawn to the idea of cutting their fuel costs by making the switch to natural gas vehicles. Unfortunately, the cost of employing this new technology can initially be pricey for some businesses. Upfront costs without government subsidies to offset the investment may lead many fleets to delay the introduction of natural gas-fueled vehicles that would allow them to take advantage of the abundance of the affordable natural gas available in the United States. Reducing fuel expense through better routing and scheduling optimization with the use of vehicle routing software may generate significant savings without the complexities of changing fleet equipment.
Are the benefits worth the costs?
Engines designed to run on natural gas are slowly gaining traction, especially as both the public and private sector incentivize more sustainable technologies, but their initial cost is deterring some transportation companies from the idea. Waste Management World reported the environmental benefits of employing natural gas fleets are significant, as these vehicles emit about 20 percent fewer harmful pollutants than their diesel counterparts. The comparatively lower cost of natural gas versus an equivalent amount of diesel fuel or gasoline is highly attractive to fleets looking to control their operating costs.
However, these environmental advantages and long-term cost savings can come at a significant expense to businesses. Trucking companies can often expect to pay an additional $40,000 to $80,000 for each natural gas-powered truck they purchase. Such investments need to be analyzed and cost-justified before most fleets will consider them.
The concerns of transportation companies interested in natural gas extend beyond new vehicle technology. Another worry for fleet managers is the availability of natural gas fueling stations, which are currently limited across the country. Where the infrastructure to deliver natural gas as a vehicle fuel is not widely accessible, fleets may determine that the lower fuel costs would be offset by added mileage and lost productivity from routing vehicles to more distant fueling stations.
How to benefit without investing in new trucks
The fuel cost reductions expected with fleet conversions to natural gas must always be evaluated against the hardware and infrastructure investments that are needed to realize them. The significant investment associated with purchasing natural gas-powered trucks is not yet cost-justified by fuel savings for many transportation companies, so they continue to cut operating expenses in other ways.
Route optimization software can help many fleets reduce costs by a significant amount in regional distribution and multi-stop route planning. By investing in this software, fleet managers can plan the most time- and fuel-efficient loads and route sequences for drivers, increasing asset utilization while reducing total miles traveled and fuel consumed. This software can produce ongoing savings in efficiency, man-hours and fuel spend while improving customer service and responsiveness. Any fleet can take action to make their planning and transportation execution more efficient and gain the cost-saving benefits from those activities today, without the complexity of moving to natural gas-powered trucks. Routing software is a sound option for dedicated and private fleets or distribution operations looking to slash operational expenses.