With federal fuel-efficiency standards set to rise and new, greener tech being brought to market, now is a fascinating but complicated time for field service firms looking to invest in more efficient ways to run their vehicle fleet. To find out what factors operators should consider and what programs are available to assist them through these tricky change-overs, The SmartVan called up Bill Van Amburg, a senior VP at CALSTART, an organization dedicated to helping fleet managers implement clean, efficient transportation solutions.
The Smart Van: What do you think are the top incentives for fleet owners to think about switching to greener technologies?
Van Amburg: Clearly, one of the big drivers for fleet operators is fuel savings, or just price savings in general. A lot of the new technologies that are out, particularly if put in the right applications, can really help reduce fuel use and then provide long-term price savings for the fleets.
But you really need to look at your fleet operation on a lifecycle basis, and so the old approach of simple payback — or one- to three-year payback — isn’t quite as useful, particularly with some of the upfront costs of the new technology. So we work with fleets both to identify where the tech can provide these initial savings, and then help them quantify that over how long they would hold the vehicle.
So fuel savings is No. 1, and then fleets are very concerned about maintenance and reliability. How are these new technologies or fuels bearing up under real-world experience? Do they last? Do they roll out the door every day? Can they be counted on? Can your staff maintain them?
For instance, a good example is electric trucks. Electric trucks right now are kind of at the infancy of their launch, but they can provide, actually, some pretty useful payback if used in the right applications. But you also have to be mindful: Do you have the power connections at your facility that are needed? What will it cost for you to install the power connections to support the fleet that you’re putting in? Will there be any additional cost to you on power? Generally, electric power is much cheaper than the petroleum it’s offsetting, so that’s where the savings are. But your facility has a ceiling on the amount of power you can use, and if you go beyond that you actually pay surcharges.
So it’s a more sophisticated world, I think, but fleets are very open to this and a lot of them have their own corporate sustainability goals. A lot of them are [saying], “We want to reduce our fuel burn. We want to reduce carbon. We want to reduce emissions, so we just want to find the best ways to do that.”
Have you experienced any sort of pushback from fleet owners? Any resistance?
I don’t want to call it resistance, but I think what you find with the fleets is if they see a better way to do something and they have good data to back it up, they can make a switch more quickly than you might think.
On the other hand, they have a known entity, which is fairly dependable even if it’s relatively expensive — for instance, a diesel-based truck or a gasoline in a car. So they’ll experiment a little bit, but they want to have some certainty if they’re going to make some big switches. They want to see that other fleets have done it and been successful.
I have been really positively surprised that, if the business case is a better case and fleets can see that data, they will start making changes. People are willing, but it takes a while to change over a fleet. Maybe it’s a 10 percent turnover per year on vehicles, and with the recession it’s been a little bit slower for the last few years.
How about smaller companies that are interested in switching to newer, greener technologies but don’t have the capital to make that large initial investment. Do you have any advice for them?
It’s one of the challenges of the new technology switch. We advise fleets, first of all, to get a good understanding of how they actually use their vehicles. It’s surprising that people still often struggle with really knowing how they’re using their vehicles, and we’ll find that a lot of fleets, as they start to dive deeper into the mileage, the idling time, the route structure, they can actually make some changes on their own that are just smart without having to go to new technology. They can just do smarter route structure and the like. They can train their drivers to be more efficient in their driving style, so there’s certainly that low-hanging fruit.
The second piece, though, is for people who are saying, “Gosh, I do want to put in a hybrid or a natural gas or an electric, but, boy, that upfront cost is really hard.” What we have guided people to do is, if you have an application that is a good fit for the technology and you want to make the change, then look at trying to do a couple of these vehicles so you can get your feet wet. Maybe you don’t change over your whole fleet, but you start to understand the tech, and usually there are opportunities if you’re aggressive to find some funding assistance for those types of steps. In some states like California there’s a really good incentive program that can help fleets whether they’re big or small underwrite, or offset, the incremental cost. There are some federal programs here and there, that if you time things right, you can go after.
I think the other thing is that [fleet managers] have to make a case differently back to their management. They have to say: “Hey, look, we need to start thinking about our total vehicle operational cost, not just the capital costs, separately. We need to link the capital cost to the operational cost and look at that total package.” Often they can convince management that they’re making a better decision, say, to make a change to a different fuel or tech, over the whole operation of that vehicle if they can bring the capital cost together with the total operational cost of the vehicle.
Can you give me a quick summary of CALSTART programs aimed at fleet operators?
One is our national HTUF Program, which is the Hybrid and Advanced Truck Users’ Forum. It’s been a partnership with the U.S. Army over more than 10 years and is aimed at understanding the needs of end users in key truck applications. What technologies will provide them with some of the new functionality that they would like, and how do we speed the commercial deployment and uptake of these technologies? We’ve been very active with vocational trucks in particular, so we’ve been working with fleets across North America to help them identify the ways that they use their trucks and their performance needs, and then work with the manufacturers to meet those needs with new technologies, particularly hybrid and electric technology. We’re now looking at advanced idle reduction and some other things that vocational and increasingly medium-haul, class-A trucks need.
We also run a major incentive program in partnership with the State of California that has spawned follow-on programs in other states. It’s a voucher incentive program that makes it more streamlined to get funding to purchase advanced technology. That’s now active for electric, natural gas, and hybrid trucks. Then we work directly in consulting agreements with fleets to help them implement new technologies that work best for them.