By John Holl
If you were offered a set fuel price—under $2 per-gallon equivalent—to run your fleet, with a locked-in deal for five years regardless of how much the price might rise would you take it? That was the question Jim Florio, the chairman and CEO of Click Wholesale Distributing in Kent, Washington faced not too long ago. Obviously, he jumped at the chance.
However the fuel in question was compressed natural gas (CNG) and not diesel. CNG has become more affordable in recent years thanks to advancements in technology. A few years ago Florio and his team met with a local energy and gas provider in the Puget Sound area. They were raising the awareness of CNG and were talking about options to get existing trucks converted to the fuel system.
For a long while Florio, like others in the industry, looked at the numbers and just knew it wasn’t financially feasible to make the switch.
“Finally there are options that are getting the technology off the ground,” he says. “Right now there are enough refueling stations in the area to make it work.” It helps that trucks from companies like Ford and International are becoming more affordable. Coupled with the reasonable fuel costs, Florio pulled the trigger to begin the transition.
“Starting in the next two months we’re going to convert 10 to 15 percent of the fleet to CNG,” he says. “Eventually they will make up a good portion of the fleet.”
Florio and Rick Steckler own Click, which started just 10 years ago. Distributors of beer, spirits and wine, the company services six counties in western Washington. Additionally, Clickhas a sister company (with additional partners) in Spokane named Click Distributing East, that serves 10 counties in Washington and an additional nine in Idaho.
In an interview with Beverage World Florio said he believes that diesel doesn’t work for the transportation business, so Click is trying to lead the charge in western Washington and will be guinea pigs for the industry, sharing their results with other wholesalers.
“California is light years ahead of us. Oregon has infrastructure along I-5. That’s the way the U.S. needs to go,” he says.
When the company rolls out the CNG vehicles, it’ll put those trucks in service around an area with fueling stations, Florio says, allowing for better efficiency.
He sees many options on the horizons, so is confidant in moving to alternative fuels. “There are assembly lines dedicated to CNG and CNG engines that work in our world,” he says, noting that the time of “wait and see” has passed.
The same is true with hybrid technology, which in the past was so cost prohibitive that it was impossible to take seriously. Innovations in battery packs mean triple the life of previous versions, he says, and can be ordered to tailor to a specific application.
“We’re going to take a look a hybrids,” he reveals. “It could be a viable option for our downtown routes.”
When he talks about the move away from diesel, Florio, of course, cites the cost benefits and also the environmental and national economy benefits. He was able to sign a five-year deal with his local gas and electric company for $1.89 for the gallon equivalent of CNG. “It’d be like throwing money away,” he says.
“If we could get a third of the fleet in the U.S. to convert we could keep a billion dollars a day here rather than send it abroad,” he says of fuel costs. “Emissions, carcinogens are reduced too.”
Plus being able to keep fuel costs the same allows Click to properly budget and not be at the mercy of constantly changing markets.
Another way he is keeping costs in line is following what he calls the Southwest Airlines model—using just one manufacturer. Click uses International because it is domestic and make quality products.
In certain ways Click is bucking trends in an established industry. Being young with a growing territory it is able to be both nimble and look at the big picture.
The more people talk about, learn about, and eventually embrace greener technologies, the more traction the movement will get and eventually, Florio says, CNG and other alternatives will be more commonplace. Sounding like an advocate, he urges other distributors to contact local gas and electric companies about options, and to have more serious conversations with manufacturers.