How will upcoming regulations effect you?  Right in your wallet I suspect.

New Study Finds Huge California-Only Fuel Premium From GHG Programs

The California Trucking Association (CTA) has released a study showing significant job losses and dramatic fuel cost spikes directly attributable to California Air Resources Board’s (CARB) fuel policies. Goods movement and agriculture sectors will be especially hard hit if the policies are allowed to go into effect as currently designed.

The study, titled “The Impact of the Low Carbon Fuel Standard and Cap-and-Trade Programs on California Retail Diesel Prices“, prepared by Stonebridge Associates, Inc. finds that by 2020 CARB’s Low Carbon Fuel Standard (LCFS) in combination with the AB 32 Cap-and-Trade Program could increase the price of diesel fuel by $2.22 per gallon.

That would represent more than a 50 percent increase in the price of diesel fuel and a shocking $6.69 per gallon at the retail pump. The average price difference between California and neighboring states would be $2.33 per gallon when accounting for taxes.

According to the study, between the year 2015 and 2020, these higher “California-only” diesel fuel costs will cause a loss of nearly 617,000 jobs in the containerized import sector, $68.5 billion in lost state domestic product, $21.7 billion in lost income and $5.3 billion in lost state and local taxes.

California’s transportation and logistics industry is responsible for almost 14% of the state’s economy and is an important source of reliable good paying jobs in this state. However the study states that a “California-only” diesel price caused by CARB’s poor program design will put California’s transportation sector at a significant competitive disadvantage.

The report goes on to say that these diesel fuel price increases of this magnitude will cast an even wider net affecting food, fuel, clothing and other essential services transported by trucks.

“It simply makes no sense that here in California where we wake up every day to double-digit unemployment, businesses struggling to keep their doors open or wheels turning that CARB would intentionally impose policies that makes fuel more expensive,” said Michael Campbell, Executive Vice President and CEO of the California Trucking Association. “Higher fuel prices create an incentive for companies to fuel up outside of our state costing us jobs that provide for our families and critical tax dollars that fund our roads and transit programs.”

The report can be downloaded at http://caltrux.org/LCFS.

Bobby Fleet Manager Wall California Fuel, CARB, diesel, fuel price increases

5 Tips to Maintain Diesel Exhaust Fluid Purity

Maintaining Diesel Exhaust Fluid (DEF) purity and concentration is vital to the efficient and long-term operation of the SCR system.

Use the 5 tips below to make sure your DEF is pure.

1. Use API certified Diesel Exhaust Fluid. Using Diesel Exhaust Fluid that meets ISO standards provides the foundation for purity throughout the distribution process.
2. Buy from a supplier that uses a Closed Loop System.
3. Dedicate nozzles, pumps, and tanks that are specifically designed for DEF. Traditional lubricant equipment is not compatible with DEF and cause damage to your SCR equipped trucks.
4. Keep DEF fluid out of direct sunlight and avoid extreme fluctuations in temperatures.
5. Training – Build awareness about the importance of purity with your team.

Following these simple steps should prolong the life of your SCR equipped trucks.

Get DEF at the PUMP!

Our Long Beach fueling location is now offering Diesel Exhaust Fluid at the pump.

Location Address:

6720 N. Paramount Blvd.

Long Beach, CA 90805

310-546-3344

Sincerely,

Bobby Zaragoza

DeWitt Petroleum

via 5 Tips to Maintain DEF Purity & DEF at the Pump – Long Beach!!!.

Bobby Fleet Manager Wall DEF, DeWitt, Diesel Exhaust Fulid, fleet

While on a visit to an unnamed trucking company:

Stainless steel and high density polyethylene plastic are DEF compatible materials. For a complete list of DEF compatible materials, see ISO22241

Rag NOT Diesel Exhaust Fluid compatible material

Your main concern should be with maintaining product purity through a “closed” dispensing system consisting of DEF compatible components. The failure to do so will cost you far more in the long run than the immediate benefit you get from saving a few cents per gallon buying DEF from this week’s “cheapest” vendor.

Bobby Fleet Manager Wall

Thought this was interesting:

April 13th, 2011

Goldman Sachs rocked oil markets for a second day Tuesday by calling for a nearly $20 fall in Brent crude oil, saying speculators had pushed prices ahead of fundamentals. It was the second warning of a steep market reversal from the long-term commodity bull in as many days. On Monday, Goldman recommended clients close a trade heavily weighted toward U.S. crude futures.

I’ve never been one to say that speculators are the primary driver of oil price fluctuations. Fundamentally, we are at or near the peak in conventional oil production — and that means oil prices will inevitably see higher highs and higher lows (See Science: “Peak oil production may already be here”; HSBC Bank: Oil will be gone in 50 years). And obviously we have a unique amount of unrest across North Africa and the Middle East.

But if the world’s biggest commodity trader commodity trader says speculation is playing a role, one has to listen — especially since Goldman has been predicting higher oil prices for longer than most:

Goldman was one of the first banks to predict $100 oil last decade, in March 2005 when prices were closer to $50 a barrel.

On Tuesday, Goldman chief energy analyst David Greely said the recent run-up in prices, in which Brent rallied as much as 33 percent since the start of the year, looked overdone.

“While prices are back at levels of spring 2008, supply-demand fundamentals are significantly less tight,” Greely said in an April 12 note emailed to clients.

“We believe that the market will experience a substantial correction toward our $105 a barrel near-term target for Brent crude oil in coming months,” he stated.

Oil prices were down sharply, with Brent shedding more than $3 to settle below $121 a barrel. On Monday, prices hit a 2-1/2 year high of $127.02 before reversing….

Goldman analyst Greely said that while unrest in the Middle East and North Africa remains a risk to oil markets, with Libyan exports already largely cut off, the price had been pushed too high by the large number of speculative traders currently long crude oil.

“Both inventories and spare capacity are much higher now and net speculative positions are four times as high as in June 2008,” Greely said.

Exactly how much speculation is driving up oil prices remains contentious:

Goldman estimated in a research note on March 21 that every million barrels of oil held by speculators contributed to an 8 to 10 cent per barrel rise in the oil price.

As unrest spread in North Africa and the Middle East, investors accumulated the equivalent of almost 100 million barrels of oil between mid-February and late March on top of their existing positions, adding approximately $10 to the ‘risk premium’, Goldman said.

Using Goldman’s 8- to 10-cent estimates and data on speculators’ positions from the U.S. Commodity Futures Trading Commission, Reuters calculated that as of last Tuesday, the total speculative premium in U.S. crude oil was between $21.40 and $26.75 a barrel, or about a fifth of last Tuesday’s price. The UK’s Financial Services Authority (FSA) does not publish trader data on Brent.

Goldman Sachs disputed the Reuters calculation on speculative premium.
Source: climateprogress.org

So according to the fundamentals the price per barrel should be around $70 to $90 which would put street prices in the $3.25 unl $3.40 dsl range.

Current price per barrel:

Bobby Fleet Manager Wall diesel, economic recovery, fuel price increases

History

My first job was as a box boy for Hughes Markets. For those of you that remember Hughes Markets, they were very big on customer service, produce, free knife sharpening and the proper way to bag groceries. For example, most of us know that eggs, bread and tomatoes should not be on the bottom of the bag.  To bag groceries, we survey the groceries, cans and boxed items are used as the base to provide support for lighter items.  As you work from bottom to top, distribute the weight and maximize the space. Bagging groceries for Hughes Markets was such a big deal that we actually had annual top box boy contests in which store’s employees would compete against each other for the coveted title. The criteria was based on time, style, structure and look. Ultimately, the contest was designed for box boys to take pride in their work as this is usually the last chance for the company to make a good impression to the consumer.

Control – Is harder to manage but will typically produce better results. If the bags are properly filled you’ll carry less of them into your house, the grocery store uses less bags and it is easier on the environment.

How does this pertain to my fleet. . . less options provide for tighter control. For example, tell a driver to use 3 locations that are near your home base. This forces your driver plan his/her route effectively because they cannot get fuel outside the parameters that you set. Secondly, your drivers are happy because that is one less thing they have to think about. In addition, mileage, fuel consumption and shrink/slippage are reduced because your drivers are not flipping through a 500 page site locator or getting turned around.

Convenience – Notice the plastic bag above. Way easy for the box person to throw your items in it, you end up with a ton of bags, with 1 or 2 items in each, not to mention that the company needs to carry twice the inventory and it’s harder on the environment. While it seems great you pay for it. Think about it, do you have an iphone — It sure is convenient to get on the internet anytime you need it. But at $99+ /month your paying for that convenience. Same goes for managing your fleet. If you really don’t need 270,000 locations across the United States then you shouldn’t be paying for a fleet card that allows for that. Secondly, most of the drivers that I’ve talked with have told me that they plan their routes according to where they get fuel, so it would seem that all this convenience is unnecessary.

So Why Control and Convenience is like Paper vs. Plastic?

Reasoning
Simple, it’s easier. 9 out 10 times the box person won’t offer paper. It is easy for them to throw your groceries in a plastic bag versus asking what you would like. Same goes for fleet management, it’s easy to say I want 270,000 locations because I don’t know where my drivers are going to be vs. saying, “we travel here, here and here and you are going to fuel at these authorized locations”.

So the next time you go to the grocery store, get paper. And the next time your thinking about how to manage your fleet, start with control and open up convenience based on your fleets’ needs.

Good luck and in case you haven’t guessed I’m a fan of paper bags.

Z

Bobby Fleet Manager Wall