Transportation accounts for 29% of the United States’ total greenhouse gas (GHG) emissions. Of that, long-haul and regional-haul tractor-trailers are responsible for 60% of emissions, despite comprising less than 15% of on-road vehicles. However, with the energy transition underway, decarbonization is top of mind for consumers, distributors, and investors alike. Included are carrier fleets who are now working toward navigating the evolving landscape of emission reductions and alternative fuel.
Decarbonization for Carrier Fleets
Historically, shippers have selected carrier fleets based on pricing, reliability, delivery time, services offered, and regional footprint. However, recently they’ve started to consider an additional factor: sustainability. With emission reduction goals of their own coming due, shippers are evaluating strategies that enable them to minimize their supply chain’s carbon footprint.
Carriers are responsible for transporting products on behalf of organizations, which means their emissions footprint impacts not only their own sustainability goals, but that of the shippers as well. That’s why more carriers are turning to alternative fuel — seeking proven strategies to reduce GHG emissions and remain competitive.
Determining Your Fuel Approach Based on Data
For many carrier fleets, gathering and managing data on potential routes, shipping partners, vehicle technologies and mandated emission reduction targets can seem daunting. With various options, fleet managers are tasked with identifying their ideal blend of alternatives and weighing the trade-off between established and emerging fuel types, including renewable natural gas (RNG), electric, hydrogen, renewable diesel, biodiesel and propane. Luckily, they don’t have to approach this process alone. Alternative fuel providers help unveil actionable insights on fuel selection and implementation, route optimization, and revenue recovery.
Specific to long-haul and middle-mile carrier applications, RNG is a common fuel selection. Not only is it ideal for high mileage applications, but it can also be used within existing vehicle technology, including Cummins near-zero natural gas engines and Hyliion’s new hybrid natural gas/electric drive-train model. For electric, on the Class 8 front, vehicle manufactures such as Freightliner, Peterbilt, Kenworth, and Mack are preparing for scaled battery electric vehicle (BEV) deployments throughout 2022. Hydrogen remains primarily in demonstration/prototype phase, with Nikola, Hino, Toyota, Cummins, and Navistar leading developments.
Plan for Technology that Fits Your Fleet
When reviewing available options, some carrier fleets find themselves postponing a transition to alternative fuel until the landscape solidifies further. However, with widespread demand to decarbonize the transportation sector, waiting is no longer an option. Rather, carriers can begin to make initial fleet conversions by phasing in additional fuel types and vehicles as technology matures, public infrastructure is built, budget permits and federal and local regulations require.
From a total cost of ownership (TCO) perspective, carriers can expect different results depending on their applications. In a November 2021 Department of Energy report comparing TCO for different power-train technologies, battery-electric vehicles performed better than diesel in short-haul applications, and fuel-cell electric vehicles are expected to become competitive in long-haul applications.
Financials for Alternative Fuels
While alternative fuels lend themselves favorably to sustainability reporting and social responsibility, the financial case can be just as convincing. Through a variety of incentive programs, fleets can get paid simply for using alternative fuel within their fleet. As available funding continues to grow and incentive programs expand into new regions, a transition to alternative fuel doesn’t have to come at the expense of an expanded budget.
Any transition carries a certain amount of risk, just as no single fuel technology will meet all transportation needs. However, there is one certainty: Carriers who take no action will soon find themselves unprepared for a changed marketplace. By working with the right partner, this situation can be avoided and the risk can be mitigated.
Scott Hanstedt is the director of sales at U.S. Gain, a division of U.S. Venture, Inc.
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