Does changing a delivery truck's oil filter regularly make a pro dealer an environmentalist? That's less a stretch than you might think. In a significant way, vehicle maintenance is a primary step toward reducing fuel consumption and hydrocarbon emissions. And while it helps companies make their fleets of trucks, forklifts, and cars greener and more efficient, it also saves them money.
The need is compelling. Transportation consumes 69% of the oil America uses, so any business that hauls freight is affected by global dynamics that find the United States competing for oil with countries in Europe and Asia. We pay for that supply with a dollar whose value against other foreign currencies has slipped appreciably.
On the flip side, the Bush administration says it's committed to cutting oil consumption 20% by 2017, and California and the U.S. Congress have passed tougher fuel-economy standards and alternative fuel mandates for cars, SUVs, and light trucks.
Saving the planet may be on the minds of dealers and distributors, but saving money is their motivation. Beacon Roofing spends half of its $20 million fleet budget on fuel, so this 178-branch distributor is on a mission to improve the performance of its 1,000 vehicles and their drivers. Beacon subscribes to what director of fleet operations Mike Berube calls the four S's:
- Shop around for the lowest fuel prices (Beacon enrolled in MasterCard's "Fuel Man" program, which gives it purchasing flexibility).
- Service vehicles consistently.
- Specify new-truck orders more closely to their use.
- Shut down vehicles, don't idle them. Berube says idling costs Beacon more than $656,000 a year in fuel "that literally goes up in smoke."
Beacon uses a Global Positioning System to monitor and control its drivers' idling times. And a strong argument can be made that an upfront investment in GPS pays long-term dividends.
GE Capital Solutions Fleet Services, which manages fleets for trucking companies, highly recommends mobile route optimization systems to help drivers find addresses and to monitor their behaviors, says GE truck operations manager Dan Kratz. These systems are also useful for companies seeking fuel efficiency from streamlined dispatching.
"Our biggest opportunity is to shorten deliveries by shipping from the closest locations, and marrying loads," says Jerry Wille, president of Edward Hines Lumber in Buffalo Grove, Ill.
By reorganizing its dispatching into three regions, Roseboro, Ore.'s Parr Lumber keeps one yard's trucks from venturing into another yard's selling territory, with a goal of reducing its trucks' road travel by 20%.
The shortest route to on-time and complete deliveries is central to fleet management; in Monterey, Calif., Hayward Lumber president Bill Hayward estimates the difference between shipping 98% complete and 96% can cost a company $150,000 per percentage point in extra driver time, fuel, and wear and tear on the vehicle.
Parr also is testing forklifts from Hyster that, by regulating acceleration, braking, and idle time, are 30% more efficient than a forklift that uses 1.5 gallons of propane per day.
Other dealers are playing catch up. "We're just learning how to look at this issue," says Brian Gable, who joined BMC West two years ago as fleet manager and found a locally managed network of 1,200 delivery vehicles, 700 handling vehicles, and 400 personal vehicles at more than 75 locations in 10 states. That decentralization prevented Gable from being able to assess fuel costs and vehicle performance. "We're trying to organize our oversight more regionally," he says.
Cutting fuel bills poses challenges for dealers and distributors, especially when their fleets are older and their builder-customers balk at fuel surcharges. (This spring, Hayward Lumber will give customers the option to kick in a few extra dollars per delivery to cover the carbon emitted for that shipment. The money would go toward planting trees.)
And given that many companies outsource vehicle maintenance, how oil and tires get recycled isn't exactly top of mind, with some exceptions: Tindell's in Knoxville, Tenn., heats its garage with 1,100 gallons of oil it reuses from its 120 vehicles. This winter, Tindell's had enough reused oil to heat its millwork shop.
More companies, however, are showing interest in alternative energy sources–ethanol, biodiesel, electric and eventually fuel cells–and hybrid vehicles that run cleaner and possibly cheaper.
Hayward, for one, plans to convert his trucks to biofuels and his forklifts to electric. Parr Lumber's goal is to reduce fuel costs 15% in 2008, and it now uses B20 biodiesel in 70% of its 280 trucks, which two suppliers refill at Parr's yards two or three nights a week. Rich Schnell, Parr's fleet manager, says his company saves $5 per truck just by not having drivers waiting around fuel stations to fill up.
Carter-Lee Lumber in Indianapolis is going full bore to switch its 28 delivery trucks and 30 forklifts to B20 biodiesel, and has storage tanks for blended fuel on premises. "The hard costs are a wash, but the soy oil [blended with distillate] has better lubricity, so there's less wear on the engines," says David Carter, this dealer's president.
Carter-Lee is the only division in ProBuild's network that uses biofuels, which burn cleaner but whose availability remains an issue. Richard Nelson, a director at Kansas State University's College of Engineering who specializes in energy, says that while biodiesel "is the easiest way for truck fleets to go green," it might not ever exceed 2 billion of the 65 billion gallons of diesel fuel used annually in the United States. Nelson also expects ethanol to top out at 12 billion to 15 billion gallons of the 140 billion to 150 billion gallons of gasoline used every year.
It's imperative, then, for dealers and distributors that switch to alternative fuels to have reliable sources of supply. Brooklyn, N.Y.-based Marjam Supply, whose efforts to use biofuels produced from grease are featured in a new documentary called Fields of Fuel, nonetheless had to find additional suppliers that could meet the needs of its 500-vehicle fleet. "We're not retrenching," says Carmen Arguelles, Marjam's COO, about switching to biofuels, as she still favors products that lower her fleet's hydrocarbon footprint.
Hybrid technology is creating excitement, too, but reality must be separated from hype, and the demand for hybrids still far exceeds their supply. Wille says Edward Hines resisted buying Toyota Priuses last year because of the long wait time and questions about their maintenance costs. And Hayward wants to know why automakers aren't applying hybrid technology more aggressively to light pickups, which have the worst gas mileage ratings of any vehicles.
Ford and General Motors market some light-duty trucks and vans that run on diesel and electric. And all of the major truck makers offer medium- and heavy-duty hybrids, although there's currently only one manufacturer, Eaton, providing hybrid-electric technology. What distributors like about hybrids, Kratz of GE explains, is that booms and other mechanical equipment can be operated using battery power, thereby saving fuel and reducing carbon emissions. In Seattle, BMC West is testing a medium-duty (up to 16,000-pound payload) hybrid, supplied by Kenworth and rigged with a framed-mounted 340-volt battery that supplements the truck's diesel power at speeds under 30 miles per hour. "So far, so good," says Gable.
The newest forklifts, with their closed-loop engines and multiple catalytic mufflers, often exceed the latest EPA emission standards and are getting better. Hyster is testing lift trucks powered by fuel cells, Toyota Material Handling offers a flex-fuel engine that can use natural gas, and Yale Material Handling's pneumatic electric lift features a wet-brake axle that makes the truck usable in certain outdoor applications.
At the pace products are being rolled out, it makes sense for dealers and distributors to lease, rather than own, vehicles so they keep up. Staying abreast of new technologies is smart business and public relations, too, as accountability for environmental stewardship ultimately rests with end users.
"People realize that we need to be responsible for the entire life cycle of the vehicles we use," says Schnell.
–John Caulfield is a contributing editor to ProSales.
Tips for Saving Gas
Keep your vehicles well maintained. Consider that every pound per square inch that a tire is underinflated results in a 6% loss in fuel efficiency in cars, according to Bryan Gregory, director of consumer education for Advance Auto Parts.
Reduce truck idling. Getting drivers to do this voluntarily is preferable, but there are timing devices available that can shut off engines.
Streamline your delivery routes. Coordinate shipments and delivery addresses to cut down on drive times.
Make sure your alternative fuel sources are dependable. Ask yourself where your company would stand if giant trucking companies started switching, en masse, to E85 or B20 blends.
Anticipate change. Forklift makers are already developing products that can meet emissions standards for 2012. And machines powered by fuel cells are just around the corner.
Stay current with environmental regulations. Sixteen states say they will follow California's greenhouse gas standards, even as EPA has ruled that would preempt federal authority.