{"id":13870,"date":"2022-06-16T12:05:32","date_gmt":"2022-06-16T10:05:32","guid":{"rendered":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/?p=13870"},"modified":"2022-06-16T12:05:32","modified_gmt":"2022-06-16T10:05:32","slug":"fleets-67","status":"publish","type":"post","link":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/2022\/06\/16\/fleets-67\/","title":{"rendered":"More fleets are adding clean vehicles, report finds"},"content":{"rendered":"

Nearly 85% of fleets expect zero-emission technology use to grow, according to the third State of Sustainable Fleets report. A record-setting crowd has showed up to ACT Expo to learn more about clean technology and its potential path to commercialization.<\/p>\n

LONG BEACH, California\u2014Spurred on by regulations and corporate sustainability movements over the past year, more fleets are making a transformational shift from traditional fuel sources as more public and private money is flooding into the zero-emission movement.<\/p>\n

From the manufacturers to the end-users, decarbonization commitments are all the rage in 2022. On top of this are various local, federal, and international regulatory pushes for the transportation industry to find sustainability solutions. \u201cThere\u2019s massive investment in this sort of clean-tech space\u2014that\u2019s where all the money is now,\u201d Erik Neandross, CEO of Gladstein, Neandross & Associates<\/a>, told FleetOwner<\/i>.<\/p>\n

The clean-technology consulting firm released its third-annual State of Sustainable Fleets report<\/a> at the start of the GNA-organized Advanced Clean Transportation Expo<\/a>\u00a0here, which drew more than 7,500 to Southern California. That\u2019s more than twice as many transportation industry professionals who gathered at the Long Beach Convention Center for last summer\u2019s ACT Expo. The future fleet expo and conference is getting so big it will move to a larger facility in Anaheim in 2023.<\/p>\n

Historically, GNA has focused on natural gas, helping large private fleets find an alternate solution to diesel. But for Neandross, it\u2019s not about which new fuel source wins out, it\u2019s about the destination.<\/p>\n

\u201cWe\u2019re not really focused on the science, R&D, and technology development for technology development\u2019s sake,\u201d he said before ACT Expo opened on May 9. \u201cWe actually want to help people to run their businesses on something cleaner, something better, something cheaper. It\u2019s really critical that we have economic sustainability right up there with environmental sustainability.\u201d<\/p>\n

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\"Erik<\/div>\n<\/div>\n<\/div>
Erik Neandross, CEO of Gladstein, Neandross & Associates, the organizer of ACT Expo, welcomes a record crowd to the 2022 conference in Long Beach, California.<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n

Zero-emission \u2018perfect storm\u2019<\/h3>\n

Neandross said the transforming fleet market and regulations created an ideal environment for the zero-emission movement even before oil prices shot up this year and diesel set price records<\/a>. \u201cThe $5.50 diesel is sort of like cloud seeding right on top of this perfect storm,\u201d he added.<\/p>\n

Diesel prices in 2021 reached their highest levels since 2014 (up 19% in a year), according to the report. Since then, inflation and Russia’s invasion of Ukraine have driven diesel prices to historic record highs.<\/p>\n

Until recently it was large companies such as Waste Management<\/a> and PepsiCo<\/a> on the private fleet side and UPS<\/a>\u00a0Inc.<\/a> on the for-hire side that were able to convert thousands of their vehicles to alternate energies. Those companies are three of the largest fleets in the U.S., according to the 2022 <\/a>FleetOwner<\/a><\/i> 500: For-Hire<\/a>\u00a0ranking and the\u00a0private fleet rankings<\/a>.<\/p>\n

\u201cIt wasn\u2019t really for the masses,\u201d Neandross said. \u201cThere were a lot of people that would sort of dip their toe in the water.\u201d But for smaller fleets, it wasn\u2019t necessarily safe to try out other fuel sources because their competitors likely ran on diesel. \u201cJust being different was inherently risky,\u201d he added.<\/p>\n

Since COVID-19, there\u2019s been \u201ca real change in the dialogue around carbon,\u201d he said. (Neandross doesn\u2019t believe the pandemic caused this change\u2014it just happened that industry consensus and technology moved forward during that time.) \u201cYou now see these big corporations saying they have to be a part of the solution. We think the report does a good job of laying out this whole ESG world. This is new stuff. There are very few companies that really understand it and really do a good job with it.\u201d<\/p>\n

Authors of the sustainable fleets report surveyed about 250 U.S.-based fleets that have used clean fuels and vehicles\u2014those running on propane, compressed natural gas (CNG), battery-electric, or fuel-cell electric. Nearly 85% of the fleets surveyed reported their use of clean-vehicle technologies will grow over the next five years.<\/p>\n

For companies looking to make significant climate commitments that mirror the Paris Climate Accords<\/a>, Neandross said that means cutting emissions by 80% to 90%. \u201cYou can\u2019t do that with diesel. You can’t do that by just being a SmartWay<\/a> partner,\u201d Neandross noted. \u201cThose days are behind us at this point. You have to do something much more dramatic.\u201d<\/p>\n

Most companies aren\u2019t yet willing to take those dramatic steps. \u201cBut I think it will continue to accelerate and grow,\u201d he predicted.<\/p>\n

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Attendees head to the exhibition floor opening at ACT Expo 2022 on May 9, 2022, in Long Beach, California.<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n

\u2018The cost of doing business’ in 2022<\/h3>\n

As larger companies and fleets move further down the lower-emission pathway, Neandross said he believes others will follow. \u201cThere\u2019s a recognition\u2014because the leaders are doing it\u2014this is just the cost of doing business,\u201d he explained. \u201cWe can\u2019t be a laggard and just thumb our nose at this climate thing.\u201d<\/p>\n

While large fleets such as UPS and PepsiCo have found success with alternate fuels, battery-electric power has not been among them. \u201cThe challenge right now we see with electrification, in particular, is it\u2019s pretty hard to make the business case because the stuff is expensive,\u201d Neandross explained. \u201cIt\u2019s still very new, and we\u2019re just not there yet.\u201d<\/p>\n

\u201cSome people\u2014the ZE advocates, people like CARB<\/a>\u2014they want to make you believe that every application can be filled with a battery-electric truck today,\u201d he said. \u201cAnd that it makes perfect financial sense. That these things pay for themselves because they have low-cost maintenance. That\u2019s just hogwash.\u201d<\/p>\n

Fleets are grappling with regulations, such as California\u2019s push<\/a> to phase out diesel by 2045 and federal clean truck rules<\/a>. They\u2019re also facing tough decisions about future technologies. \u201cIf you\u2019re operating a fleet today, it is a battle,\u201d Drew Cullen, SVP of fuels and facilities services at Penske Transportation Services<\/a>, one of the report sponsors, said during a mainstage session on ACT Expo\u2019s opening day.<\/p>\n

\u201cIt’s a battle, whether it\u2019s drivers, whether it’s high energy costs, whether it’s equipment,\u201d Cullen continued. \u201cSo it’s really hard to start thinking about a rule that is going to be coming into play in a couple of years. You’ve got so much going on right now just to keep your business running and satisfy your customers.\u201d<\/p>\n

With BEV equipment still costly and substantial charging infrastructure lacking across the nation, some larger fleets are finding success with compressed natural gas. \u201cIf you\u2019re a fleet like a UPS and you\u2019re burning 20,000 gallons of diesel per year per truck\u2014and diesel is up to $5.50, that\u2019s real money,\u201d Neandross explained.<\/p>\n

The sustainability report found that CNG had a clear cost advantage\u2014and more stable prices\u2014than diesel. In 2021, CNG prices nationwide rose 3% at public fueling stations; diesel went up 19%. Fleets that embraced CNG saw clear economic benefits, according to the study: 79% reported cost savings as a primary advantage; some of them reported finding return on investment (ROI) within three years.<\/p>\n

Government emission regulations and ZE grants<\/h3>\n

A key to increased adoption of near- and zero-emission transportation across the public and private sectors, including accompanying fueling and charging infrastructure, is record-setting government funding and legislative support at both the state and federal levels, according to report findings.<\/p>\n

\u201cThe nation of California\u201d\u2014as Neandross referred to the Golden State\u2014continues to lead in vehicle and infrastructure funding as well as progressive zero-emission regulations. Five other states\u2014Oregon, Washington, New Jersey, New York, and Massachusetts\u2014are following suit with their own similar regulations based on California\u2019s that requires OEMs to sell increasing numbers of zero-emission trucks.<\/p>\n

The report found public incentives for clean fuel and vehicles will increase to about $20 billion annually through more than 230 programs over the next few years. That\u2019s almost seven times the $3 billion available in recent years. Much of the funding growth comes with the $1.2 trillion Infrastructure Investment and Jobs Act<\/a>.<\/p>\n

Other findings in the 2022 State of Sustainable Fleets report<\/h3>\n

Here are some of the other key report findings on how fleets are using BEVs, CNG, hydrogen, and other fuel types. The State of Sustainable Fleets report was sponsored by Daimler Truck North America<\/a>, Penske Transportation Solutions<\/a>, and Shell Oil Co<\/a>. Cummins Inc.<\/a> is a supply chain sponsor of the report.<\/p>\n