Lowes Companies announced last week that it was expanding its program to move its transportation operations to natural gas power.

After launching its program at a DC in Kissimmee, FL last year, Lowes said it will now convert all of its nearly 70 trucks at its Mount Vernon, TX distribution center over the next couple of years.

It represents one of the first moves by a retailer or manufacturer to make a complete move to natural gas trucks at a distribution center, although a few 3PLs have done so.

The conversion will be managed Lowes' dedicated carrier there, NFI. It is believed NFI received a multi-year commitment from Lowes in order to support the cost of the conversion.

Lowes hopes to make similar conversions at all of its distribution centers by 2017, according to Steve Palmer, VP of transportation.

The move to natural gas was a logical next step after a number of other improvements in Lowes' transportation operations, Palmer told SCDigest. He said after improving optimization of its fleet operations, gains in trailer loading, more extensive use of backhauls and other successful initiatives, analysis showed a change to natural gas was the most attractive next step for the company to make in transportation.

The move will not only reduce operating costs, but well aligns with Lowes' strong commitment to sustainability, Palmer said. He estimates that the change to natural gas reduces carbon emissions by about 20% per mile, a little more or a little less depending on the age of the truck being replaced.

The benefits to Lowes include lower operating costs per mile, the improvements in sustainability and carbons emissions noted above, and importantly a more stable transportation cost environment.

"We're confident that natural gas will provide us with a more stable cost platform than reliance on volatile diesel prices," Palmer said, saying he expects natural gas prices to stay pretty low for a number of years.

As part of the program, Clean Energy Fuels, a company founded by legendary energy investor T. Boone Pickens, will build a natural gas filling station in nearby Sulphur Springs, Texas to service NFI and potentially other natural gas users. It is assumed the Clean Energy received the same type of multi-year commitment from NFI that the carrier received from Lowes.

At a high level, a shipper or carrier has three options for getting access to natural gas fuel to power their trucks, said Clean Energy spokesman Don Horning:

1. Use a public natural gas filling station: Clean Energy currently has over 100 publicly available stations on the major interstates and DC clusters, and there are others from other companies.

2. Have a new publicly available station built, as was the case here for NFI and Lowe's.

3. Have private/backlot station built: this is common for certain types of industries, such as waste management, bussing operations, and airports.

"We started on this journey approximately three years ago, and this was the perfect scenario to roll out our first natural gas fleet," says Ike Brown, who owns NFI.

In a related note, Lowes was one of five large shippers to receive the EPA Smartway award for 2013, as announced this week at the CSCMP conference in Denver.

"We hope our efforts will help build the momentum for others to transition their fleets and spur the development of natural gas vehicles," Palmer said.

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