Shippers, Carriers See Emergence of Natural Gas As a Transportation Hot Button

Supply-chain services firm Tompkins International recently completed a study that identified the shift from diesel to natural gas as one of five key issues that will dominate the transportation sector this year.

The group's report, which was initiated under the Tompkins Supply Chain Consortium, ranked the rising importance of compressed natural gas (CNG) and liquefied natural gas (LNG) among four other trends: final-mile innovation, same-day delivery, tightening capacity and trucking-industry consolidation. The consortium is a peer-driven group consisting of 350+ retail, manufacturing and wholesale/distribution companies that track and submit data in order to identify best practices and benchmarking information for carriers, shippers and other stakeholders.

The transportation professionals who helped inform this year's ‘Trends in the Transportation Industry’ report have observed some important alternative-fuel developments, like the market launch of Cummins Westport's 11.9-liter ISX12 G natural gas engine. That family of engines has changed the dynamic in the over-the-road sector, enabling the use of CNG or LNG for a number of applications.

The report also notes the initiatives of major players in the transportation and logistics space, such as UPS, which has adopted natural gas at a large scale.

‘The first UPS order for 2014 is for 700 tractors, which is about 12 percent of the logistic behemoth's over-the-road fleet,’ the report states. ‘All this is happening during a time when less than 25 percent of a planned natural gas refueling network is operational.’

And of course, the natural gas trend in transportation is being driven largely by cost savings, which continue to hold steady. The report notes that, as of January, the average cost differential between diesel and natural gas was about $1.79 per gallon equivalent. That range has not moved far beyond $1.50 to $2.00 in quite some time.

Chris Ferrell, director of the Tompkins Supply Chain Consortium, authored the report. He can be reached at cferrell@tompkinsinc.com.

To access the full report, click here.

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