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getting a lift from hydrogen

It's not just hot air. Lift trucks powered by hydrogen fuel cells are proving themselves over and over in DCs across the continent.

getting a lift from hydrogen

Want to drive a hydrogen-powered car? Be prepared to wait 10 years or so. Want to drive a hydrogen-powered forklift? Just step in to your nearest distribution center. If it isn't testing out forklifts powered by hydrogen fuel cell technology today, it might be soon.

Hydrogen fuel cell technology is fast making inroads in North America's manufacturing and distribution operations, where fuel cell-powered lift trucks are quietly taking their place beside their battery- powered counterparts. This April, retail giant Wal-Mart expects to take delivery of an unspecified number of fuel cells from Plug Power Inc. that will be used to power pallet trucks at its food distribution center in Washington Court House, Ohio. The purchase follows an in-depth pilot program at two Wal-Mart DCs in Ohio in late 2006. In those trials, 12 fuel cell-powered pallet trucks operated under regular working conditions for more than four months, logging more than 18,000 hours and 2,100 indoor fuelings by pallet truck operators.


In South Carolina, the Greater Columbia Fuel Cell Challenge just concluded the last of six individual twoweek trials with fuel cell-powered lift trucks. Organizers of the Fuel Cell Challenge, which is aimed at making the Greater Columbia area a hotbed of fuel cell development, expect to run more trials this year. The Department of Defense has also put in an order for fuel cell-powered lift trucks to be used at its facilities in California and Virginia, and fuel cell trucks are already in use at a General Motors facility in Canada.

In New York, Raymond Corp. has been testing a fuel cell-powered lift truck since last summer. Raymond, a lift truck maker that's owned by Toyota, recently added two more vehicles, the latest in December. Raymond's fuel cell lab will run at least four fuel cell trucks from multiple suppliers for two years, measuring performance and reliability in specific applications. In May, Raymond opened an onsite indoor refueling facility for fuel cells. The refueling station, which is located at Raymond's Greene, N.Y., manufacturing facility, is the first such refueling center in the state.

All of this has led Wall Street analyst Brannon Cook to predict big things for fuel cells in the distribution arena. The JPMorgan Chase analyst says that although fuel cell technology has proved more expensive to develop than initially expected, the demand from certain markets is growing.

In a research report, Cook says he believes that cars powered by fuel cells are "over a decade away from pre-commercial adoption," but that demand from smaller markets, like forklifts and backup power, is growing.

Wal-Mart's green machines
Some of that demand is likely to come from Wal-Mart. "We've seen how fuel cells can improve efficiency in our distribution centers while enabling us to be more responsible global citizens," says Johnnie Dobbs, Wal-Mart's executive vice president of logistics and supply chain. "Wal-Mart is focused on finding ways to improve our relationship with the environment throughout our operations. Our hope is that our investment in fuel cell technology will encourage its development as a viable option to existing technologies."

Along with corporations like Wal-Mart, states and municipalities are investing in the technology. In fact, Wal- Mart chose the Washington Court House, Ohio, DC for its upcoming fuel cell tests in order to take advantage of funding from the state of Ohio. Ohio recently awarded a grant to fuel cell vendor Plug Power Inc. and its Cellex subsidiary in an effort to increase the viability of fuel cells. "The funding is to help us not only to move the technology forward, but to prove the cost effectiveness locally at distribution centers," says Tom Hoying, vice president of sales and customer operations for Plug Power's Motive Power Division.

In the Wal-Mart tests, the cell-powered lift trucks will be refueled at an indoor refueling station. Drivers will simply pull up to a hydrogen pump, much the way automobile drivers pull up to the pump at a gas station. A compression system located outside the DC will allow for the onsite generation of hydrogen, something made possible by the state funding.

As for Plug Power's next venture, Hoying says the company is preparing for an "early commercial release" of a product for use in the food, retail, and mass-merchandising sectors this spring. Testing at six companies will begin in April, and Hoying expects many of those companies to place initial orders in the second half of the year.

"The key thing is making sure the technology does what the customer needs it to do, and that when it goes down, you can resolve problems quick enough so they aren't experiencing any down time," says Hoying. "If [the technology] works, demand will be very strong."

So far at least, the technology appears to be delivering on its promise. Roy Eckmeier, senior manager of operations at FedEx Express, says he's been pleasantly surprised by his company's experience using fuel cells provided by Hydrogenics on its fleet of Hyster lift trucks. "Until now, we've operated heavy equipment with battery or propane power, but we recently began using hydrogen power," says Eckmeier. "As with any new technology, the first concern we had was [whether it would] operate as well as the equipment we have presently. Our experience to date has been that there has been relatively no difference between the fuel cell technology and the equipment we have used previously."

Lots to like
It's not hard to see why companies are interested in experimenting with fuel cells. Aside from the environmental benefits (see sidebar), fuel cell-powered lift trucks offer a number of operating advantages. For starters, they're able to operate at full power up until the moment the cell runs out of fuel, much the way a car does before it runs out of gas. Lift trucks powered by traditional batteries, by contrast, tend to lose power toward the end of each shift as the battery wears down, which can become a drag on productivity.

Fuel cells also have the advantage over batteries when it comes to refueling. While it can take 20 minutes or longer to change a battery, a fuel cell can be recharged in a matter of minutes. In the Greater Columbia Fuel Cell Challenge project, for instance, drivers generally were able to refuel the trucks in a minute or two and be on their way. In addition, fuel cells eliminate the headaches surrounding the proper disposal of lead acid batteries.

Bruce Mantz, who operates third-party logistics service provider Automated Distribution Systems, adds that fuel cells can also save DC operations valuable space. With fuel cells, there's no need for a separate storage area to house the units when they're not in use (as there is with batteries). In the Wal-Mart trial, for example, the indoor fuel dispensing area required just 200 square feet of floor space, compared with the 4,000 square feet needed for the lead acid battery room. That's a major consideration for a 3PL operation like Mantz's, where every square inch of DC floor space represents a revenue opportunity.

A tough cell
Though fuel cells are getting generally high marks from users, the technology still has some obstacles to overcome. A user in the South Carolina trial had to shut down its test when high temperatures in the non-air-conditioned distribution center began to affect the fuel cell's performance. Fuel cell testers also report that replacing batteries with fuel cells changes the characteristics of a lift truck. Before they can send a truck that's been converted to fuel cell power out onto the floor, they have to re-do their calculations for load center and stability, taking the fuel cell into consideration.

Then there's the cost. Although the price of outfitting a truck with a fuel cell power pack is about half what it was two years ago—and continues to decline—it can still run to about $40,000 per truck, or about 10 times the price of a conventional lead acid battery. In addition, it can cost $100,000 or more to equip a building with a hydrogen storage tank, compressor, and dispensing system. Cook notes that both technological advances and price decreases are taking longer than expected, which has given rise to charges that the technology has failed to live up to the hype.

Those charges will sound familiar to anyone who followed the RFID market in the early days, back when Wal-Mart first began testing the technology. What happened with RFID may offer some clues to fuel cell technology's future. With the Behemoth of Bentonville as its champion, RFID soon took off. Prices dropped, technological advancements were made, and reliability issues were resolved. Today, RFID is slowly but steadily becoming embedded in supply chain operations from coast to coast.

The hope is that Wal-Mart can do the same for fuel cells. And at least one industry player thinks that's precisely what the retail giant has in mind. Commenting on the retailer's commitment to the fuel cell trials, Hoying of Plug Power has this to say: "Wal-Mart's commitment [to the technology] shows their strong interest in seeing fuel cells brought into the mainstream materials handling industry."

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