Florida-based beer distributor replaces fleet with “green” tractors

Jupiter, FL-based beer distributor J.J. Taylor Companies (www.jjtaylor.com) is replacing its diesel-powered Tampa-based tractor fleet with compressed natural gas (CNG) tractors.

This switch was made to CNG vehicles because they have near-zero emissions so they are less harmful to the environment, says Jose Rivera, the company’s vice president of finance/administration. The vehicles also have “a lower cost on a Diesel Gallon Equivalent basis, and CNG vehicles are markedly quieter than their diesel counterparts.

J.J. Taylor is transitioning the 95-unit daily delivery fleet with Freightliner Business Class M2 112 CNG tractors. They are powered by a Cummins-Westport 8.9L ISL-G engine and an Allison 3000Hs transmission.

Part of the transition includes the creation of a private CNG fueling station.

Plans for a second station and conversion of the company’s 75 vehicle fleet in Fort Myers, FL, are underway.

J.J. Taylor performs it maintenance work in-house, with warranty work performed by the OEM. There is some special training required for those technicians that will work on CNG trucks.

 

FAIR MARKET VALUE LEASES

The switch to CNG vehicles was possible, in part, because of the lease financing provided by PHH FirstFleet, a division of PHH Arval (www.phharval.com), a fleet management services provider in the U.S. and Canada.

It is one of the first fair market value leases for a CNG vehicle in the U.S., notes PHH FirstFleet’s Rob Stowers, senior vice president of truck and equipment leasing.

A fair market value lease for a CNG vehicle is essentially the same as one for a diesel-powered vehicle, he explains. The issue in pricing for CNG vehicles is predicting the future value of the vehicle in three to eight years when the lease expires.

“There is little or no used-vehicle sales history for CNG trucks, so predicting expected sales in the future is a bit of an art. Due to significant increase in the purchase cost of a CNG vehicle, as compared to a diesel truck, to make the lease payment somewhat comparable to diesel requires the lessor to take a higher residual position than it would with a diesel truck.

“However, cost savings derived from fuel spend and grant monies often offset all or more of the increase in the lease payment.”

Stowers believes that a used CNG truck in good working order will have more value than a comparable diesel truck in the next three to eight years.

 

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