Con-way Freight, the less-than-truckload (LTL) arm of trucking and logistics giant Con-way Inc., will launch a pilot program in the spring to operate two vehicles powered by compressed natural gas (CNG), according to one of the parent company's top executives.
The company plans to take delivery of the vehicles in the second quarter and initially deploy them in the Chicago area for local pickups and deliveries, said Randy Mullett, vice president, government relations and public affairs for Con-way Inc., the parent of Con-way Freight.
Mullett said the company chose Chicago as the test venue because there are CNG fueling locations near Con-way Freight's facilities there.
If Con-way Freight deems the pilot to be effective, the vehicles' operations could be expanded to provide over-the-road LTL service within a 300- to 350-mile distance, Mullett said. Con-way would also consider adding more CNG-powered vehicles if the test phase is successful, according to Mullett.
Low price at the pump
The attraction to Con-way is CNG's low pump price relative to diesel fuel and liquefied natural gas, the latter of which has gained wider acceptance than CNG in the trucking industry. CNG is currently priced at about $1 a gallon, said Mullett. By contrast, the average price of a gallon of diesel fuel stood at $3.39 a gallon as of Monday, according to the Department of Energy's Energy Information Administration. The cost of liquefied natural gas is usually about $1 a gallon less than diesel, Mullett said.
A side benefit of CNG-powered trucks is that gas-powered trucks are quieter than vehicles powered by diesel, thus making communication easier between drivers and dispatchers, Mullett said.
The trucks are new builds and not retrofits, and will be manufactured by Freightliner, which builds virtually all of Con-way's LTL fleet vehicles. Each vehicle is expected to cost about $30,000 above the price of a diesel-powered truck.
Mullett said he is unaware of any other LTL carrier using or testing CNG-powered vehicles.
A question of ROI
Mullett acknowledged that the long-term success of the program would depend on driver acceptance of the new vehicles, the costs of maintaining CNG-powered vehicles, and the ability to build out refueling and maintenance infrastructure at a reasonable cost.
"The purpose of the pilot is to put a [return on investment] on the program," said Mullett, adding that the fate of the program could be tied to what, if any, government incentives are available to promote a conversion to natural-gas powered truck fleets.
Another wild card is the price of natural gas, which is currently at near record lows due to abundant supplies and weaker than-expected demand from what has so far been a relatively mild winter across much of the United States.
Prices are also being depressed by the positive long-term outlook for natural gas supplies as increased exploration activity leads to the extraction of large amounts of natural gas from shale rock.
