Green logistics: Owens Corning, Dillon Transport are making strides on the LNG front

While it is no secret that the United States is not independent when it comes to energy sources, progress is being made to some extent in the freight transportation industry.

A good example of this comes from March 2011, when the White House unveiled its National Clean Fleets Partnership, which is designed to help large companies reduce diesel and gasoline usage in their fleets by meshing electronic vehicles, alternative fuels, and fuel-savings measures into their daily operations. The White House said the goals of this effort are to:
-reduce fuel through the use of more efficient vehicles and technologies, including hybrids; and
-replace gasoline and diesel powered vehicles with advanced technology vehicles or those that run on alternative fuels like electricity, natural gas, biodiesel, ethanol, hydrogen, or propane.

Soon after the National Clean Fleets Partnership was rolled out, a partnership between contract freighter Burr Ridge, Illinois-based Dillon Transport and Owens Corning, a producer of residential and commercial building materials, glass fiber reinforcements and engineered materials for composite systems, was announced in which Dillon would use liquefied natural gas (LNG) trucks to deliver raw materials to Owens Cornings’ Irving, Texas-based U.S. roofing plant.

Around the same time, Dillon said it had inked an agreement with Clean Energy Fuels Corporation in which Clean Energy will build, operate, and supply and LNG fueling station on Dillon company-owned property about a mile from the Owens Corning Irving, Texas plant, as well as put 14 LNG-powered vehicles on two inbound lanes for five years. And last December, Dillon took delivery of ten more LNG-powered vehicles, which are to be placed into service by Owens Corning this month.

Officials from both Dillon and Owens Corning said that this effort is vital, as it will reduce greenhouse gas emissions and puts a greater emphasis on “green” logistics efforts, too.

In an interview with LM, Wayne Johnson, manager, carrier relations, at Owens Corning, said that prior to the official launch in March 2011 Dillon and Owens Corning had conversations about using LNG-powered trucks for short-haul, inbound runs less than 300 miles round trip, with the possibility of adding more if there was an increase in business.

“These [LNG-powered vehicles] cost about $30,000 more per truck,” said Johnson. “We decided we would start at the Owens Corning Irving, Texas plant and a plant in Houston, too. Dillon has a number of trucks (30-to-40) on order, too, in order to keep busy in these lanes we have given them, and we are targeting some Ohio lanes as well into Medina, Ohio. We are averaging about ten-to-15 loads per day with Dillon on these trucks.”

Owens Corning also has its own partnership with Clean Energy focused on wind energy, with Owens Corning’s fiberglass technology composite materials being a part of wind blades used for wind energy.

Johnson declined to disclose a specific figure for how much Owens Corning has saved by contracting with Dillon, but he said Owens Corning bases its fuel usage off of diesel prices compared to natural gas, with more savings coming from higher diesel prices, which vary.

Clean Energy founder T. Boone Pickens has said repeatedly that if the 8 million Class 8 vehicles on the road today in the U.S. switched from diesel to natural gas, that would represent a reduction of 2.5 million barrels in imported oil per day and cut down on the 35 billion gallons of diesel consumed per day by the trucking industry, with a $1-$2 dollar per gallon decrease, too.

“We needed to make sure this was a true sustainability effort as well as make sure there were operational improvements, too, and it did that,” said Johnson. “We are very focused on this as a company on a global basis, with a team of 30-to-35 people that visits our plants to make sure they are running as efficiently and cleanly as possible.”

When asked what the primary benefits of this collaboration with Dillon are to date, Johnson cited showing the company’s heightened focus on sustainability to its customers, and the commitment to Dillon and its livelihood (adding that Owens Corning to work with any carrier on this effort).

While Dillon and Owens Corning are working with Clean Energy to bring on more LNG fueling stations as needed, Johnson said sufficient volume is required for that to happen.

“The current level of ten-to-15 loads per day is pretty good volume and they are willing to do that for us,” he said. “We just need to pinpoint those locations, get the carrier involved and make sure the carrier is viable as well.”

The current length of haul for the Dillon trucks in use that are contracted by Owens Corning range from 75-to-125 miles one way, according to Johnson. A typical run will originate in Irving or Houston, Texas and Medina, Ohio.

While Owens Corning is clearly doing its part to bolster sustainability efforts, Johnson said much more needs to be done on an industry-wide basis.

“I can’t for the life of me understand why U.S. shippers have not fully grasped the impact and effect of using alternative fuel,” said Johnson. “Diesel is close to $4 per gallon, and LNG is closer to $2.50 per gallon. The LNG trucks cost about $30,000 more, but I think carriers are willing to go out and buy the equipment if shippers commit to them and the traffic itself so I don’t know why they are not grabbing hold of it. And as this proves to be a good venture, you will see more shippers get involved and start looking at LNG fuel. I think it is going to grow tremendously in the next few years.”