For our 2013 HIT List, Beverage World editors identified four key trends that are driving the fleet management side of the beverage distribution business. Those include the increasing versatility of fleet tracking technology, rapid adoption of compressed natural gas-fueled vehicles, leasing of alternative fuel vehicles and the improving ROI for all-electric vehicles.
Right on Track
Few technologies are proving as versatile for fleet operations than telematics/fleet tracking systems. Operators are using such systems not only for their GPS capabilities—enabling drivers to find their way via the most efficient routes and fleet managers to keep track of where their delivery pros are at any given time—but also as key sources of business intelligence. Some systems—which now are enabled for smartphones and tablets—send emails or texts to the team back at the home base, alerting fleet managers of activities such as excessive speed or engine idling. Having this information at one’s finger tips enables managers to make immediate improvements to their operations, ultimately saving fuel and money. It’s also a safety enhancer: Managers get real-time alerts about speeding, which ultimately gets drivers to ease up on the pedal and experience fewer incidents. Others act as digital coaches, providing drivers feedback as they drive, enhancing their skills and, ultimately, the distributor’s bottom line.
According to CALSTART, in states like California and New York that offer incentives for such fleet technology, the payback period can be as short as five years. And if the price of the trucks batteries continues to fall as expected, that ROI period is expected to improve substantially over the next few years. One company that recently gave a significant vote of confidence in the viability of electric delivery vehicles was none other than the operator of the largest beverage fleet in the world, Coca-Cola. Coke announced that it’s deploying 16 refrigerated plug-in electric vehicles in California to transported chilled Odwalla beverages. PepsiCo already has the largest electric delivery fleet in the nation, although it’s for its Frito Lay snack business. Despite their relative limited penetration in the beverage space thus far, expect all-electric vehicles to become an increasingly attractive and cost-effective option for a number of beverage delivery environments.
Clearing the Air
While a lot of people talk about the need to do something to help the environment, some beverage distributors are taking matters into their own hands and moving full-speed ahead with conversions to cleaner-running Compressed Natural Gas (CNG). For example, New York City-based Manhattan Beer Distributors (MBD) on Nov. 4 added an additional 12 trucks to its growing fleet of CNG delivery vehicles. MBD is a pioneer in using CNG trucks in the New York metro area having first introduced 15 trucks in 2002 out of its headquarters in Bronx, N.Y. The addition of the 12 CNG trucks to the Long Island fleet brings the total number of CNG trucks to 75, out of 300 delivery trucks overall.
Also this year, Monarch Beverage continued to roll out CNG trucks to its fleet. The company expects to save 60 percent in its overall fuel costs each year. “We’ve made a long-term commitment toward CNG,” says Fred Dufour senior vice president for Monarch Beverage . “We have placed additional orders for Kenworth T440s, and by 2015, 90 of our 105 trucks will be CNG-powered.”
And beer distributor J.J. Taylor Companies, Inc. announced in September it is replacing its 95-unit Tampa-based fleet with CNG tractors as part of an ongoing commitment to sustainability.
Turning the Key to Sustainability
Leasing alternative fuel vehicles became an increasingly viable option for beverage fleets in 2013. Leading the way was Ryder System, Inc., which has built a comprehensive leasing solution for beverage companies looking to go that route. In fact, just as this issue was going to press, Saddle Creek Logistics Services selected Ryder for a natural gas vehicle solution in two markets. With the agreement, Saddle Creek will lease 31 heavy duty compressed natural gas (CNG) vehicles from Ryder. Thirty of the CNG vehicles will run in the Dallas/Fort Worth, Texas region and be maintained by Ryder at its Fort Worth service facility, which is being upgraded to meet the unique compliance requirements for natural gas. One vehicle will operate in Saddle Creek’s Shreveport, Louisiana delivery fleet and be maintained at Ryder’s existing natural gas vehicle maintenance facility in that city.
With natural gas vehicles already available for lease and rent in California, Arizona, Michigan, New York, and Louisiana, Ryder now adds Texas as its newest market with a natural gas vehicle maintenance capability.
According to Scott Perry, vice president of supply management, Ryder System, there are several key advantages to leasing an alternative fuel vehicle or fleet:
* The lower upfront capital cost
* The higher residual value
* An outside company taking care of the maintenance infrastructure
* Demonstrating good corporate citizenship by the environmental commitment to clean fuels, and
* A way to move up to higher technology levels faster than if owning the vehicles. This is particularly important in the advancing alternative fuels area.