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[5 comments]

Kroger rolls out green fleet

May 9, 2014

Goodbye diesel. Hello natural gas. Earlier this week Kroger announced that the company is getting ready to be the first to deploy a fleet of heavy-duty trucks running on Liquid Natural Gas (LNG) as a means to cut operating costs and greenhouse gas emissions.

According to a press release put out by the company, Kroger is taking 40 diesel trucks off the road and replacing them with the same number of LNG vehicles. The trucks will be used to make deliveries to Fred Meyer and QVC stores in the Portland area.

"This is the first step in Kroger's effort to transition our fleet to alternative fuels," said Kevin Dougherty, Kroger's group vice president and chief supply chain officer, in a statement. "Converting to LNG trucks will allow us to reinvest savings into lower prices for our customers while also benefitting the environment."

Kroger said the vehicles would travel approximately 175 miles per day, six days a week for the entire year.

[Image: Kroger Sustainability]

"These trucks are nearly identical to our diesel fleet, which allows us to have minimal impact on operations and still achieve the same caliber and standard of performance," said Matt Hoffman, Kroger regional logistics director, in a statement. "They are truly the prototype truck of the future — the safest, cleanest and quietest way for our hard-working drivers to deliver product to the stores."

The grocer expects the fleet, which will be fueled at Kroger's distribution center in Clackamas, will reduce green house gas emissions by 755 metric tons compared to the previous diesel fleet. This equates to 159 cars being taken off the road every year.

FINANCIALS:     [NYSE:KRO] [ ]

Discussion Questions:

When do you think alternative fuel vehicles such as those being run by Kroger will go mainstream? Do you see a particular type of fuel as becoming the standard for the industry over the next 10 to 20 years?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How do you expect consumers in Oregon to react to Kroger's announcement that it is switching to a fleet of trucks running on Liquid Natural Gas?

Comments:

LNG is primary being used for short haul transportation because of two issues. First, is the need of specialized equipment both on the truck and for refueling. The good news hear is that LNG companies have been willing to help with the conversion of existing fleets to LNG. The second is the lack of sufficient LNG refueling sites to allow its use for interstate/long haul.

I expect the growth of LNG as a fuel will continue to be in shorter haul situations. For this to become a major fueling method in the future, the LNG companies will need to continue build infrastructure for which there will be little demand for some time. That will require significant investment which will have to funded by success in the short haul market.

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Steve Montgomery, President, b2b Solutions, LLC

Nice to see large retailers like Kroger and Walmart moving ahead on green initiatives like this, which reduce emissions and may save a little money to boot. With the political back and forth over whether climate change is real and what's causing it, we should all be able to agree that reducing pollution and emissions is a good thing. I imagine Kroger started in Oregon because their shoppers are more environmentally-sensitive, so will be appreciative of the effort. Baby steps are better than no steps.

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Al McClain, CEO, Founder, RetailWire.com

Do I see a particular fuel being standard (over the next 10-20 years)? Yes, the one that has been for the last 60: diesel.

'notcom'

Years ago I saw Liquid Natural Gas powered cars in Canada, so the technology has existed for awhile. When Kroger or any retailer evaluates alternatives it is on total cost, not just the fuel cost. The USA is the world's largest producer of LNG due to new technology. This has kept the LPG costs down. The real win with LPG powered vehicles is the lower maintenance costs. It was not unusual for a LPG car in Canada to go 300,000 miles before rebuilding the engine. For a heavy duty truck fleet this results in significant savings. Kroger has the ability to fuel up at the distribution center and thus does not need to rely on a commercial network. Just like we are seeing forklift trucks powered by fuel cells, there are situations where alternative fuels can excel.

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W. Frank Dell II, CMC, President, Dellmart & Company

Kroger is making a statement to the younger generations that it wants to preserve the planet for their generation and beyond.

Any company that wants to develop an emotional advantage should use sincerely do what it can (and let the public know ) that it is thinking and acting green.

Tom Borg, Business Expert, Tom Borg Consulting, LLC

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