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By John Kemp
LONDON, March 25 U.S. distributors and freight hauliers have held down diesel consumption even as their business recovers from recession by making thousands of small changes to their operations.
Improved driver training, restrictions on idling and careful route planning to reduce deadheads (where vehicles travel empty) are all reducing consumption of expensive diesel while helping companies promote their green credentials.
"In 2011, we achieved almost 69 percent improvement in fleet efficiency over our 2005 baseline," Wal-Mart boasted in its 2012 Global Responsibility Report. "We delivered 65 million more cases, while driving 28 million fewer miles, by increasing our pallets per trailer and better managing our routes."
"Our network efficiency improvement equates to avoiding nearly 41,000 metric tonnes of carbon dioxide emissions, the equivalent to taking 7,900 cars off the road," the company wrote.
In 2013, FedEx will have improved the fuel efficiency of its U.S vehicle fleet by 22 percent compared with 2005, Chairman Frederick Smith said at CERA Week. It has surpassed its previous goal of a 20 percent improvement by 2020 seven years early. Smith has now committed the company to an even more ambitious 30 percent target for the global vehicle fleet by the end of the decade.
U.S. fuel consumption
Fuel conservation programmes are being replicated at hundreds of firms across the transportation and logistics sector.
"The price of oil and fuel volatility is definitely a driver, but not as much as the push to reduce carbon emissions," according to a consultant from PricewaterhouseCoopers quoted in a special report published by the University of Pennsylvania's Wharton School ("Greening the supply chain: best practices and future trends" 2012).
In practice, what started as a carbon-saving programme during the 2004-2008 boom has become a cost saving initiative in the lean years that have followed.
"Adding efficiency to any part of the supply chain produces better returns. The good thing is that much of what we do to improve fuel economy translates to the bottom line as improved profitability. Every bit of energy you save is money in your pocket," according to Wharton.
The overall impact of thousands of energy saving decisions has been enormous. The United States consumed 3.7 million barrels of distillate fuels a day on average in 2012, down almost 11 percent from a peak of 4.2 million barrels a day in 2008.
The drop in diesel consumption has been much sharper than for gasoline demand, which fell just 6 percent over the same period.
In contrast to private passenger vehicles, which mostly run on gasoline in the United States, diesel is mostly used in trucks and other commercial vehicles, and has borne the brunt of cost-cutting.
Single-unit and combination tractor-trailer trucks consumed 42 billion gallons (159 billion litres) of fuel and travelled 267 billion miles (430 billion km) in 2011, sharply down from 48 billion gallons and 311 billion miles in 2008, according to the Federal Highway Administration's annual statistics about road use.
Some of the simplest ways to save fuel involve changing driver behaviour. Many firms in the Environmental Protection Agency's "Smartway" fuel saving programme have banned engine idling at loading and unloading facilities, as well as truck stops along the road. Others have instructed drivers to reduce speeds (driving at 55 miles per hour uses up to 7 percent less fuel than at 65 miles per hour).
Another strategy is to replace the standard set up of two standard tires and wheels with a single wide-base tire (cutting fuel consumption around 3 percent). Ensuring tires are inflated to the correct pressure helps reduce drag from contact with the road surface.
In some instances, truck stops without climate control have been refitted with heating and airconditioning to stop drivers idling their trucks to stay warm or cool, according to the EPA.
Driver retraining has been backed up by engine-monitoring software which can detect fuel-wasting aggressive acceleration and violations of idling bans. In Britain, utility contractor Skanska has fitted Isotrak monitors to its vehicle fleet which provide detailed reporting on individual driving styles.
"We are wholly committed to our green agenda and have found that by implementing Isotrak's tracking and telematics system we have been able to keep in line with our fleet company policy, significantly reducing fuel consumption and carbon dioxide within the business, while instilling safe and efficient driving skills into our work force," Skanska told "Fleet News" (February 2, 2013).
The major fuel savings have come from better route planning, which aims to ensure as many trucks as possible travel fully rather than part-loaded, and to reduce the amount of empty backhaul journeys which burn fuel to no purpose.
Better logistics planning to make more efficient use of the truck fleet can cut the number of part loads and empties.
Dow Chemical uses GPS to track truck locations and plan new routes in real time.
The "four corners" strategy implemented by many companies (with intermediate regional distribution centres in the northeast, southeast, northwest and southwest of the United States) can also cut fuel consumption. Long haul journeys are done by rail (which is up to 3.5 times more efficient) leaving trucks to handle the shorter intra-regional journeys.
"Railroad freight cars carry cargo over long-distance high-volume corridors. Trucks or barges move the loads between the rail terminals and the cargo's ultimate origin or destination," in a multimodal strategy that continues to gain in popularity according to EPA.
Firms have started to focus on making better use of the space in each container or truck. Wal-Mart demanded reductions in the amount of packaging and better palletisation to reduce the amount of unused space in its containers.
International Paper estimates federal regulations restricting maximum truck weight to 80,000 lb mean every truck has a 10-foot void. If it could increase every load just 1.5 percent, some 5,000 fewer trucks would be needed, according to the Wharton School.
The company has lobbied Congress for a rise in federal weight limits to 97,000 lb, with an extra axle to distribute the load, something opposed by safety campaigners (HR 763 Safe and Efficient Transportation Act 2011).
Better planning is not just about cutting deadheads and finding the shortest route. Cutting-edge firms are starting to take road conditions into account, including the number of junctions and other stoppages, but most importantly gradient.
None of these changes on its own results in a major reduction. But combined, and applied by hundreds of long-distance transportation companies, the savings have proved significant.
NEW TRUCK TECHNOLOGY
Most of the fuel reduction achieved so far has come from changes in behaviour and route optimisation rather than switching trucks to natural gas or hybrid technology.
But Wal-Mart is experimenting there, too. Forty percent of Wal-Mart's trucks run on biodiesel to save money.
In California, the company has been testing five Westport trucks that run on liquefied natural gas (LNG) for the last three years. It is also working with Freightliner to develop and test hybrid trucks that use diesel drive trains and electric motors to recover some of the energy lost during braking.
Frito-Lay, a division of Pepsi Co, last year announced plans to convert its entire tractor-trailer fleet to natural gas, and reckons the payback period could be as little as 18 months.
Many smaller truck operators remain unconvinced about the economics of switching to gas, worried about the high upfront costs of buying natural gas tractors or retrofitting existing ones, as well as the lack of refuelling stations open to the public.
But the economics look more attractive for big fleet operators - which could take another chunk out of diesel consumption in future if gas prices remain low compared with diesel.
* Dollar/yen limps up after posting 7 straight days of losses
* Checkers Drive-In Restaurants has agreed to be sold to Oak Hill Capital Partners for $525 million in deal expected to be announced on Thursday - WSJ