Alpha Packaging, Boyd Metals investing in CNG truck fleet

Miami-based Ryder Systems recently expanded its compressed natural gas (CNG) truck fleet services into Arkansas, with Fort Smith-based Boyd Metals and Greenwood-based Alpha Packaging being the first two customers.

Robert Cook, who works in Ryder’s Fort Smith office, said the CNG trucks are made by Volvo in North Carolina and have a Cummins 12-liter engine. The cabs do not have a sleeper berth, and are used for daily roundtrips of less than 300 miles. The vehicles are more expensive. A truck that might cost $100,000 will cost about $160,000 with CNG. He said the prices are falling as more developments are made in CNG and as more companies convert to CNG.

The payoff, Cook said, is in the cost to operate the trucks. They estimate the extra cost of the vehicles is recovered by the third year – even with the lower price of diesel fuel.

“Those company’s (Boyd, Alpha Packaging) return on investment won’t be as great as we hoped when diesel was a $3.60 a gallon … but both companies are in this for the long haul,” Cook said.

POWER MOVE
Boyd Metals Transportation has signed a full service lease agreement for seven CNG tractors. The new tractors will replace Ryder leased diesel powered trucks now used by Boyd Metals.

Boyd Metals Transportation General Manager Michael Cooper said the company may add more CNG vehicles if the seven new tractors meet expectations. Tom Kennon, president of Boyd Metals, said the power equivalence of CNG-fueled tractors was also a big draw.

“It basically got to the point where the power is the same in a diesel truck. That’s really the thing, because you don’t want to put a truck out on the road that doesn’t have the power,” Kennon told The City Wire.

Alpha Packaging also signed a full service lease agreement for seven CNG trucks, and the trucks will replace diesel powered rigs. Trucks for Boyd and Alpha are expected to be delivered in August, Cook said. According to Ryder, Alpha Packaging is building an natural gas fuel station at its Greenwood corrugated box manufacturing plant. The Fort Smith region is also served by two public CNG stations operated by Arkansas Oklahoma Gas Corp.

“Even with the recent drop in diesel fuel prices, the stability of natural gas fuel costs, along with the environmental benefits of natural gas vehicle technology, bring significant value to our fleet operation,” Alpha Packaging President Mike Stec said in a statement provided by Ryder.

ENVIRONMENTAL CONSIDERATION
Kennon also said the drop in diesel prices didn’t come close to negating the benefits of CNG.

“The savings were incredible when diesel was at $4 a gallon, but it’s still a good deal now,” he said. “There also is the environmental side, which is what everybody is doing, but it also saves us money.”

Not only are there fuel savings with CNG, Cook said more company owners and fleet managers recognize the value in lower maintenance costs, quieter vehicles and operating vehicles that are “a lot cleaner on the environment.” He also said many like the idea of using American-made vehicles and domestic energy.

“They are very partisan about the U.S., and like to have trucks built in the U.S., and obviously, the natural gas is ours,” Cook said.

Cook said Ryder plans a marketing event in August when the trucks arrive for Alpha Packaging and Boyd Metals. He said they plan an open house in Fort Smith and will invite existing and hopefully future customers.

Prior to the agreements with Boyd and Alpha Packaging, Ryder had fleet customers in Arizona, California, Georgia, Louisiana, Maryland, Michigan, New York, Texas, Utah, and Quebec, Canada. Ryder has 17 natural gas vehicle maintenance facilities, and more than 2,200 NGV trained technicians. The company operates liquefied to compressed natural gas (LCNG) operations in Fontana and Orange, Calif.

NATIONAL CNG TRENDS
Use of CNG for truck and delivery fleets has grown in recent years. UPS is using more than 600 CNG vehicles and has plans to add 1,400 more. The company recently contracted with TruStar Energy to build 15 CNG stations in 11 states. Construction has begun on a station in Oklahoma City and New Orleans.

The Anheuser-Busch distributor in Houston has worked with Ryder to convert its fleet of 66 tractors to CNG. The trucks are being leased by Anheuser-Busch from Ryder and operated by Lowell-based J.B. Hunt Transport. The deal is part of a larger goal by St. Louis-based Anheuser-Busch to reduce emissions and fuel costs in its private fleet of more than 600 vehicles.

CNG sales in Texas during 2014 rose 78% over 2013. Texas Railroad Commissioner David Porter said CNG vehicles “are becoming mainstream faster than expected.”

Oklahoma Gov. Mary Fallin recently signed a law that provides interest-free, 5-year loans to county governments that buy CNG vehicles or convert their fleet vehicles to CNG use.

However, sales of alls natural gas vehicles in the U.S. fell 6.5% in 2014 because of the drop in gasoline and diesel fuel prices, according to NGVAmerica. Sales of heavy-duty CNG vehicles was up 30% compared to 2013.