While many in the logistics world still think of propane as a fuel for forklifts, that's only part of the story. It's also being used as a clean, cheap source of power for over-the-road trucks.
Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
Long before the EPA's SmartWay program, carbon mapping, and hybrid electric trucks, Schwan's Home Service trucks were running on an alternative fuel. But the fuel wasn't ethanol or biodiesel or one of the others you might expect. It was a fuel that's more often associated with lift trucks than their over-the-road counterparts: propane.
Why propane? "It started back in the '70s when ... fuel prices were rising," explains Jeff Schueller, director of fleet maintenance for Schwan's. "Marvin Schwan, the founder of the company, did not want the fuel prices back then to affect his company's growth and the routes that he was building, and so he looked for a more economical way to run the equipment."
Today, 75 percent of the 6,000-plus trucks in the company's fleet run on propane. That includes both the medium-duty vehicles and the light-duty trucks Schwan's uses to deliver its flash-frozen food to homes in suburban neighborhoods and rural areas throughout the country.
Does propane still have the cost advantage over mainstream fuels 35 years later? Schueller says it does. "Every year, we do an analysis—diesel vs. propane, or diesel vs. gas and propane—and operationally, the numbers continue to show that it is more economical for us to operate on alternative fuels," he says.
Cheap, clean, and available
While many in the logistics world still think of propane—also known as liquefied petroleum gas (LPG) or propane autogas—as a way to power forklifts, that's only part of the story. It has long since moved out of the warehouse and onto the highways. Today, there are approximately 15 million over-the-road vehicles running on propane worldwide, according to the Propane Education & Research Council (PERC), making it the third most-popular fuel source for vehicles after gas and diesel.
In the United States, most of the uptake has been in the commercial (as opposed to passenger) vehicle sector—particularly among fleets whose vehicles operate within a fixed range. For the most part, the vehicles running on propane are light- and medium-duty trucks.
For fleet owners, much of propane's appeal is its low cost. According to PERC, the price of propane tends to be about 30 percent below the national average price for gasoline.
And it's not just cheaper; it's cleaner too, advocates say. Depending on the application, propane-fueled vehicles generate 17 to 24 percent fewer greenhouse gas emissions than their gasoline-powered counterparts, says Brian Feehan, vice president of PERC.
Another advantage is that 90 percent of propane is derived from sources in the United States, which minimizes the risk of supply disruptions caused by geopolitical events. In comparison, the United States imports roughly 60 percent of its petroleum.
On top of that, propane is readily available. The lack of refueling infrastructure that has hampered the adoption of some other alternative fuels, like hydrogen, is less likely to be a concern with propane. Although most propane-based fleets handle refueling at the company's own locations, that's not their only option. A network of public fueling stations already exists. According to the Department of Energy, there are 2,500 propane refueling stations throughout the country.
Bumpy road to adoption
Yet for all its advantages, propane has made only limited inroads in the U.S. over-the-road truck market. Although it appeared to be poised for takeoff following the OPEC embargo and resulting oil crisis in the '70s, interest faded once oil supplies loosened up and fuel prices retreated.
Historically, this hasn't been the easiest of routes for a fleet manager to pursue. While propane itself may be relatively inexpensive and widely available, that's not necessarily true of the trucks that run on it. Even today, a fleet manager contemplating going over to propane will face a number of hurdles.
For one thing, the vehicles carry a high price tag. Propane-powered trucks cost on average $6,500 to $11,000 more than gasoline-powered ones.
For another, there's vehicle availability. Although Feehan says things are starting to change, one of the biggest barriers fleet owners have encountered to date has been simply finding a propane-powered truck that meets their needs.
Some companies have solved the problem by converting gasoline trucks to propane. Schwan's, for instance, buys its fleet vehicles with their original gasoline systems intact and uses certified technicians to install a liquid propane injection system. "Basically it just adapts right to the engine and wiring harness without any alterations to the original equipment," says Schueller.
"[Conversion] is not difficult to do," agrees Feehan. "The difficult part is getting the vehicle certified in terms of durability, drivability, emissions-testing compliance, and EPA standards. Once that's done—and that's usually [handled] by the fuel-system manufacturer—it takes eight hours for a certified installer to put in the fuel system."
But that still leaves the question of service and repairs. With propane not yet in widespread use, it's not always easy to find technicians who are familiar with the fuel and willing to work with it. To build a repair network, Schwan's ended up training potential service providers itself.
Although Schueller says the training required was minimal, he acknowledges that the prospect of starting over with, say, hydrogen or natural gas has deterred his company from investigating other alternative fuels. "After three decades of use, we have a well-trained [repair] network [staffed with operators who are] knowledgeable in that arena," he says, "so it hasn't been conceivable to start in with another alternative fuel system at this point."
The road ahead
When it comes to propane's prospects for widespread adoption, the biggest impediment of all may simply be a lack of visibility. In the trucking industry, overall awareness about propane remains low compared with other alternative fuels. The American Trucking Associations, for example, has published white papers addressing alternative fuels such as biodiesel and natural gas, but not propane.
A related problem is outdated perceptions about propane. Many people don't realize how much the technology has evolved since the '70s, advocates say. Feehan points to vehicle acceleration as an example. Although earlier propane vehicles didn't offer as much horsepower as their gasoline-powered counterparts, advances in liquid injection technology have essentially erased the difference, he says. Today, propane vehicles mirror gasoline models in terms of horsepower and acceleration. But Feehan adds that it's often necessary to get people to demo the vehicles to convince them of that.
To combat outdated perceptions and re-establish propane's credibility as a transportation fuel, the propane industry has made a concerted effort to educate the market over the last five or six years, says Feehan. And it appears the effort may be paying off.
One indication is the expanded availability of propane autogas vehicles. Roush CleanTech, a division of Roush Industries, now sells propane-powered light- and medium-duty Ford trucks and vans, while CleanFuel USA offers light- and medium-duty GMC trucks.
This past February, snack maker Frito-Lay announced that it would begin piloting a Ford E-350 light-duty truck from Roush that's powered by liquid propane autogas. If the pilot produces the expected cost and environmental benefits, Frito-Lay says it could convert as many as 2,000 gasoline-powered trucks to propane over the next few years.
These and other market developments have led at least one observer to conclude that propane's day may finally have come. "With the industry initiatives to go green, I would advise companies to consider propane," says Schueller. "In addition to conversion kits, the major manufacturers, Ford and GM, are going to be offering the option for fleet owners and buyers in the future. I think with the rising gasoline [prices], propane is a very viable option."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.