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Industry giants are going green to get the green

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Both UPS and FedEx have invested in alternatively fueled vehicles

By John D. Schulz, Contributing Editor
September 28, 2010

Wal-Mart isn’t alone. Staples recently installed speed governors on its private fleet, reducing top speed to 60 miles per hour, which it says increases fuel mileage by 25 percent, saving at least 500,000 gallons of fuel a year.
 
Trucking companies are slowing down as well. Schneider National, the nation’s second-largest truckload carrier, has reduced the speed of its single-driver trucks to 60 mph. That saves Schneider about 3.75 million gallons of fuel annually, or nearly $12 million, taking out as much as 83 million pounds of CO2 emissions.
 
Trucking companies are expected to consume approximately 55 billion gallons of fuel this year, including diesel and gasoline. That will make trucking’s total fuel tab about $150 billion, close to an all-time record. Regional trucking giant Con-way has enacted similar reduced speeds to 62 mph, saving 3.2 million gallons of fuel a year.
   
After labor and equipment, fuel is the third-highest cost for a motor carrier. The average truckload carrier spends about 12 to 14 percent of its revenue on fuel, with the average LTL carrier spending perhaps 6 percent (The difference is because of the longer lengths of haul of a TL carrier, typically over 1,000 miles).

President Obama signed a presidential memorandum that for the first time would set mileage and pollution limits for big trucks, set to take effect with the 2014 model year.  Although heavy trucks comprise just 4 percent of vehicles, they account for perhaps as much as 21 percent of air pollution from mobile sources. Heavy trucks consume 16 percent to 22 percent of this nation’s fuel supply, or about 54 billion gallons of fuel annually.
 
Slower speeds also translate into safety. Trucking-related fatalities plunged 20 percent last year to 3,380, an all-time low, according to the National Highway Traffic Safety Administration. That 20 percent drop was the fourth straight year of declines and the biggest year-over-year drop since records were dept, NHTSA said, citing better safety habits of truck drivers and companies.
 
Los Angeles, in particular, and California in general, are leading the movement to make freight greener. The ports of Los Angeles and Long Beach, the busiest in the nation, are pushing a “Clean Trucks Program,” would shift the responsibility of operating clean trucks from the drivers to the trucking companies. A federal judge recently upheld the ports’ plan to replace some 16,000 old diesel trucks serving the ports with newer trucks, under a plan to reduce emissions by more than 20 percent.
 
Trucks and trailers have been redesigned and equipment specifications changed to reduce weight. Con-way Truckload, for example, has redesigned the specifications for its trucks, lightening them by 670 pounds. It says that will save nearly 12,000 gallons of diesel fuel a year.
 
Of course, no one (just yet) how to power an air freight aircraft with electricity. But Fed FedEx has a goal of getting 30 percent of its jet fuel from alternative fuels by 2030, an initiative it calls “30 by 30.”
 
Aviation represents a great opportunity for a transition to renewable fuel sources because the infrastructure requirements are much lower. There are about 250,000 gasoline or diesel fueling points in the world, but there are only about 1,700 major aviation fueling points, according to FedEx chairman Smith.
 
Transitioning aviation to alternative fuels will be “much easier” than surface transport if renewable fuels become cost effective, Smith told his company shareholders, adding: “The prospects look brighter every day, with jet fuel already being produced from algae and plants such as jatropha and camelina, albeit at cost levels that are not yet competitive with petroleum.”

But as the cost of imported oil rises, these alternative fuels are looking better and better.

About the Author

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John D. Schulz
Contributing Editor

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. He is known to own the fattest Rolodex in the business, and is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis. This wise Washington owl has performed and produced at some of the highest levels of journalism in his 40-year career, mostly as a Washington newsman.


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