Ryder System Inc.
), one of the leading providers of integrated logistics and
transportation solutions has entered its first-ever lease
contracts for supplying natural gas leased vehicles. The company
has entered a full-service lease agreement for providing 23
compressed natural gas tractors to Louisiana-based Eagle
Distributing of Shreveport, Inc.
Eagle Distributing of Shreveport would replace almost the entire
diesel-powered delivery fleet with Ryder's natural gas vehicles.
In addition, Ryder will also offer maintenance services for all
23 tractors through its Shreveport service center, which is
established in accordance with the standards set for natural gas
Eagle expects the new fleet of natural gas vehicles will curb
greenhouse gas emissions by approximately 24%, and bring it down
from 878 tons to 670 tons.
Ryder has pioneered several such initiatives that promote the
utility of alternative fuel vehicles. The SANBAG (San Bernardino
Associated Governments) project is one such. Under this project,
Ryder collaborated with Southern California Association of
Governments Clean Cities Coalition, to provide 87 heavy-duty
natural gas trucks to customers.
Under the SANBAG project, Ryder received total of 202 natural
gas vehicles, worth $38.7 million and marked the largest
commercial natural gas truck project in North America.
In September 2011, Ryder first launched its "Flex-to-Green" lease
offering to support sustainable transportation, or eco-friendly
transportation for private fleet operators. This lease offering
involves incorporation of fuel-efficient vehicles into their
fleets including liquid natural gas and hybrid vehicles. The deal
provides the customers with an opportunity to convert their
conventional vehicles to new fuel-efficient ones as per their
Besides Eagle Distributing of Shreveport, Inc, large freight
transportation companies like
) has also shown strong interest in promoting fuel-efficient
vehicles. Last week the company set new fuel efficiency goal by
reducing aircraft carbon emissions to 30% by 2020 besides meeting
at least 30% of its jet fuel requirements through alternative
fuels by 2030.
We believe that the growing environmental awareness among
corporate houses like Ryder stems from the stringent actions
taken by the regulatory authorities to restrain environmental
The U.S. federal and state governments as well as regulatory
bodies like the U.S. Department of Transportation (DOT) and
National Highway Traffic Safety Administration (NHTSA), as well
as the U.S. Environmental Protection Agency (EPA) have taken
several measures to curb global warming.
One of these key measures remains the establishment of the
National Program in 2009 - an agreement between the federal
government, state regulators, and the auto industry. The national
program, also a two-phased program, constituted standards to
establish improved fuel efficiency across a 30 years span,
involving the first-ever global warming pollution standards for
The key highlights of the first phase (2012-2016) will set the
global warming pollution standards of 250 grams per mile, on
average, for year 2016 model vehicles. In addition, NHTSA
requires fuel efficiency standards of an average of 34.1 miles
per gallon in a new vehicle. Cumulatively, these measures are
expected to translate to 23% improvement in new vehicle pollution
standards. It would represent an average annual improvement of 5%
Going forward, the phase II (2017-2025) of the National Program
covers standards on light vehicles, finalized by the EPA and DOT
in Aug 2012. These standards require reduction in green house gas
emission by cars and light trucks to 163 grams per mile in 2025
that would lead to fuel efficiency of 54.5 miles per gallon.
Consequently, we believe that Ryder's step toward promoting
environment-friendly vehicles is significant in exercising these
standards. This will not only result in a cleaner environment but
also lower average consumer expenses on fuel, accounting for $140
billion in 2030 as per research data.
Ryder, which operates with other similar players like
Trinity Industries Inc.
) has a Zacks Rank #2 (Buy).
AMER RAILCAR (ARII): Free Stock Analysis
FEDEX CORP (FDX): Free Stock Analysis Report
RYDER SYS (R): Free Stock Analysis Report
TRINITY INDS IN (TRN): Free Stock Analysis
To read this article on Zacks.com click here.
American Railcar Industries, Inc.
), with a Zacks Rank #1 (Strong Buy) is another stock in this
sector, which we believe in worth considering.