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Home » Positive Payoffs Result from Natural Gas Conversions

Positive Payoffs Result from Natural Gas Conversions

September 16, 2013
Food Logistics

Owens Corning gained these savings by doing nothing more than going about its business. One of its truckers, Chicago-based Dillon Transport Inc., converted from diesel fuel to lower-cost, cleaner-burning liquefied natural gas on two lanes that it operates for the Toledo, Ohio-based company. The routes from Owens Corning's suppliers to its factories in Texas and Ohio have stayed the same, as have the rates. Owens Corning's savings come from lower energy surcharges imposed by Dillon.

Phil Crofts, Dillon's marketing director, reckons its natural gas surcharges are, on average, 30 percent below those on traditional diesel fuel. Unlike with diesel, there is no industry-wide template for determining natural gas surcharges. However, natural gas prices are today about 90 cents to $1 a gallon cheaper than diesel prices. In addition, natural gas price fluctuations are less extreme. The combination of low prices and low volatility has become a boon to truckers, which can pass on some of that bounty to their shippers.

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KEYWORDS Chemicals & Energy energy supply chain fleet management food logistics Fuel Logistics Fuel Sourcing Global Supply Chain Management Logistics Logistics Outsourcing LTL/Truckload Services management Natural Gas Logistics North America Road Freight Supply Chain Analysis & Consulting Supply Chain Management supply chain management: chemicals and energy Technology Transportation & Distribution Transportation Management Transportation Solutions Trucking Management
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