FEELING BULLISH

DELIVERY COMPANIES EXCITED ABOUT THE POSSIBILITIES OF ALTERNATIVE FUELS

- DAMIEN MARTIN

There’s a lot of BS in this story. That’s because cattle dung is a key component of renewable natural gas (RNG), one of several alternative fuels that delivery companies are turning to as they revamp their supply chains. Zero-emission energy sources are expected to make up 60 percent of installed capacity by 2040. Always looking to stay one step ahead, parcel companies are investing for the future by adding more alternative fuel vehicles to their fleets.

DRIVING FORCES

As for why delivery companies would diversify their assets to include a mix of alternative fuel sources, the simple answer is no BS at all: They want to maximize profits. Fossil fuel prices are notoriously unstable, as anyone who’s stopped at the gas station right after a price jump can attest. Especially when fuel is imported, there are so many external factors that go into determining price that one event reducing supply can throw budgets devised over months or years completely out of whack. When fuel can account for a third of transportation costs in the supply chain, that’s a big deal.

It’s also no bull that corporations want good public relations. A steadily growing percentage of consumers actively looks for products that are sustainable. The catch, says Yossi Sheffi— director of the MIT Center for Transportation and Logistics and author of the book “Balancing Green: When to Embrace Sustainability in a Business (and When Not To)” — is that only 5 to 10 percent of people are willing to pay extra for sustainable products. A switch to alternative fuels, Sheffitold Material Handling & Logistics, can lower costs and win over eco-conscious consumers.