Alternative fuels provide cost savings for supply chain

The price gap between natural gas and diesel fuel has many companies looking at going green as a way to increase savings in their supply chain. A new report by the Conference Board of Canada shows that companies can save thousands of dollars by switching to natural gas fuel.

The report estimates a savings of $150,000 per truck over a 10-year period. This is almost double the cost of converting trucks to run on compressed natural gas.

Due to the high supply of the fuel in North America, natural gas is trading at record low prices. In the meantime, crude oil hovers at approximately $150 per barrel. For companies looking to reduce transportation costs, the price difference between diesel and natural gas is making the latter option much more attractive. Frito-Lay is expected to save roughly $2.50 per gallon by replacing 67 trucks with vehicles that ran on compressed natural gas.

"The payback for the extra cost of the natural gas trucks is a year and a half, so it's a little bit of a no-brainer. We retire approximately 125 tractors a year, and we plan to replace as many of them as we can with natural gas," Michael O'Connell, the senior director of fleet capability at Frito-Lay, told The New York Times.

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