03/30/2011 | 04:50 pm
Ryder System, Inc. (NYSE: R), a leader in commercial transportation and supply chain management solutions, today announced that it reached a key milestone in a major alternative fuel initiative with the order of 202 heavy-duty natural gas vehicles. The vehicle order is part of Ryder's agreement with the San Bernardino Associated Governments (SANBAG) to launch a groundbreaking heavy-duty natural gas truck rental and leasing project in Southern California. Ryder will begin taking delivery of the vehicles in April, and expects to have the full order integrated into its fleet by September. Ryder will also begin work this month to upgrade the first of three existing maintenance facilities in its network to be properly equipped for the indoor servicing of natural gas vehicles and will soon commence construction of two natural gas fueling stations.

In addition to reducing emissions, businesses that incorporate natural gas vehicles in their fleet have the opportunity to realize additional cost savings because natural gas fuel prices are significantly lower than diesel fuel prices, which are currently on the rise.

"We are excited about taking these first important steps to kick off what is proving to be one of the most innovative and large-scale commercial natural gas truck projects in North America," stated Robert Sanchez, President of Global Fleet Management Solutions for Ryder. "This project reinforces our ongoing commitment to deliver environmentally-sound and cost-effective transportation solutions, while serving as a model for how to successfully implement alternative fuel programs in large commercial truck operations."

"This project is a great illustration of the potential for success when the right project partners assemble and work as a team," said SANBAG President and San Bernardino County First District Supervisor, Brad Mitzelfelt. "We are proud to play a role in an important project in which each partner has made a contribution. This project confirms SANBAG's commitment to creative problem solving and enhancing the quality of life for our residents."

About the Project

The SANBAG project, awarded to Ryder in April 2010, is being conducted in partnership with the Southern California Association of Governments (SCAG) Clean Cities Coalition. It is intended to increase the use of domestically produced alternative fuels and reduce emissions by bolstering the existing regional infrastructure in Southern California. When fully implemented, the project will displace more than 1.5 million gallons of diesel annually with 100 percent domestically produced low-carbon natural gas. The project will contribute to the maintenance and creation of more than 400 U.S. green automotive jobs located in regions of the country that have been the hardest hit by the recent economic downturn. Based on estimates using California's Carl Moyer program guidelines, the project will reduce more than 9.2 million pounds (4,195 metric tons) of greenhouse gas emissions per year, more than 131 tons of nitrogen oxide emissions annually, and completely eliminate 2.65 tons of diesel particulate emissions from local neighborhoods.

The $38.7 million project will be funded as part of a joint public/private industry partnership between the U.S. Department of Energy, the California Energy Commission, and Ryder. $19.3 million of the total project funding will be provided by state and federal sources, including $9.95 million from the U.S. Department of Energy's Alternative Fuel and Advanced Vehicles Pilot Program funded through the American Recovery and Reinvestment Act of 2009 (ARRA), and $9.3 million via the California Energy Commission's Alternative and Renewable Fuel & Vehicle Technology Program. Demonstrating Ryder's strategic commitment to alternative fuels, the Company is also committing $19.4 million of its own capital into the project.

Vehicle Configurations

Ryder worked extensively with its OEM partners to determine the right vehicle mix and configurations to meet the needs and applications of customers in the Southern California market. The order includes 182 Freightliner M2-112 tractors, featuring the Cummins ISL-G engine, in both single-axle and tandem-axle day cab configurations. This represents the largest single heavy-duty natural gas truck order for Freightliner in North America. The balance of the order will include a mix of other unit configurations supplied from a variety of manufacturers. The trucks will be equipped with either liquefied or compressed natural gas (LNG and CNG) on-board fuel storage systems.

All 202 vehicles will be equipped with RydeSmart®, Ryder's proprietary GPS fleet location, tracking, and vehicle performance management system. The RydeSmart® onboard telematics technology continuously monitors each vehicle's location, mileage and speed, as well as other performance and diagnostic data. That information is communicated every 15 minutes and on-demand, as necessary, via a dedicated and secure cellular connection to fleet operators' desktops. Using this depth of real-time fleet information and visibility down to individual vehicles, fleet operators can make a quantum leap in saving labor, time and money, while improving productivity and customer satisfaction. More information about RydeSmart® can be found at www.rydesmart.ryder.com.

These ultra low-emission trucks will be deployed into Ryder's Southern California operations network, where Ryder's 1,200 customers will be able to access them through short-term rentals, long-term leases, or through Ryder's dedicated logistics services.

Infrastructure

As part of Ryder's agreement with SANBAG, the Company will also maintain the vehicles at three strategically located maintenance shops in Rancho Dominguez, Orange, and Fontana. The upgrade of the first facility in Rancho Dominguez will begin this month and is expected to be completed and ready to service natural gas vehicles in April. A number of important steps are required to ensure the facility will meet stringent industry and government safety standards for natural gas vehicle maintenance. These include upgrades of shop electrical and lighting systems, as well as the installation of enhanced air handling and ventilation systems and natural gas refueling stations. Ryder's professional maintenance technicians are also receiving extensive, specialized training on the maintenance and repair of heavy-duty natural gas vehicles.

Technical and administrative support for this project is being managed by Gladstein, Neandross and Associates, an environmental consulting firm that is widely recognized throughout the United States for its expertise on air quality issues, alternative fuel vehicles, and infrastructure and energy projects.

For information and ongoing updates about the project, please visit www.thengvproject.com.

Buck