Aug 24, 2012 11:20 AM

Transport Capital Partners (TCP) recently teamed up with ACT Research to conduct a national survey to better understand how carriers are thinking about the potential of natural gas fuel for their fleets.

Slightly more than half (51.4%) of the carriers surveyed are considering natural gas (NG)-fueled trucks when new trucks are purchased, but these carriers do see hurdles.

“The survey confirms the growing interest in natural gas by carriers encouraged by the large difference in price, but also shows the complexities of  choices in terms of type of fuel, fuel supply systems, payload impact, station availability, and so forth,” said Richard Mikes, TCP partner and survey leader.

Ninety-four percent of respondents cite fuel station availability as an obstacle while almost 90% are concerned about higher vehicle purchase prices. Additional concerns include needed product specs/performance (51.4%) and secondary market value (50%).

While carriers are potentially interested in NG as a fuel alternative, three-fourths of carriers would need a payback in only one to two years to facilitate a purchase decision.

“The good news about natural gas as a source of energy for transportation is that the diesel gallon equivalent (DGE) compared to diesel is relatively insensitive to major swings in domestic natural gas spot prices. Diesel, in contrast, is highly sensitive to crude oil prices globally with major price swings possible,” said Ken Vieth, senior partner and general manager of ACT Research.

Half of the carriers surveyed reported they would evaluate the new truck technology in this year and the next, with 28% saying that there will not be any new plans until 2013. A handful of the carriers said their decisions would depend on the success and performance of the technology as well as results from other carriers implementing the change.

“The carrier’s overall decision can best be viewed through a truck life cycle economic model, which considers initial costs of NG engines/systems, possible revenue reductions for payload impact, differential between diesel and NG prices over time, maintenance cost impacts in carrier shops and over the road, and estimated sale price of used equipment,” said Mikes. “TCP has experience assisting carriers in such scenarios of equipment life cycle options.”

Almost half of carriers surveyed would require a commercial NG fueling station be within 100 miles of their operations. For carriers considering NG, LNG (liquefied natural gas) was preferred over CNG (compressed natural gas) by 38% to 28%. CNG is more preferred by larger carriers, however.

Carriers are still learning about NG as a fuel alternative. Slightly more than one-third of respondents reported little knowledge about potential use of natural gas engines as part of their fleet while almost half (45.8%) report their knowledge as “average” or “above average.” TCP managing partner Steven Dutro said, “Significant fuel costs savings is motivating carriers to learn more about the natural gas alternative.”

As for predictions, 29% of carriers expect NG fuel will account for less than 5% of their fleet five years from now, 27.8% report that it will account for 16%-25%, and 19% predict it will account for 6%-15% of their fleet.

Of the carriers surveyed, most (44.4%) had an approximate length of haul between 300-600 miles and used their Class 8 engines for linehaul—short-to-long (90.3%).

Visit www.transportcap.com or www.actresearch.net for more information.