Cold-chain operators are facing a huge rise in costs when red diesel’s subsidy ends in April. Jack Carfrae delves into the details – the alternative solutions on the market and the investment required
You know that running a haulage company is not cheap, andif you’re in the temperature controlled business with diesel powered transport refrigeration units (TRUs), it’s about to get a lot more expensive.
Your typical TRU has a standalone engine which runs on red diesel. That’s currently taxed at 11.14p per litre but, in its March 2020 Budget, the government announced plans to ban red diesel’s usage across most sectors from 1 April 2022 as part of its environmental strategy.
The RHA campaigned for a delay to the ban – but unfortunately it came into place at the beginning of the month – impacting costs to the cold chain sector immediately.
Lack of support
At the time of writing, the average price per litre of white diesel is hugely more expensive
than red diesel, the average cost of which was 77.14ppl in January, according to the Agriculture and Horticulture Development Board.
White diesel’s levy is 57.95ppl, which means TRU operators will face an additional 46.81ppl. The Cold Chain Federation (CCF) reckons it’ll add £6.53 to average daily running costs and “approximately £100m to the industry’s estimated 40,000 TRUs”.
Suffice to say, the industry isn’t happy, and not just about the cost. Prior to the Treasury’s announcement, the CCF had been in consultation with the government about a longer-term plan to wean operators onto cleaner alternatives.
“We were in discussions with the government about some form of roadmap that was five-to-10 years long,” says Shane Brennan, the organisation’s CEO, “it’s a shame, and it set us back at the time, because we were making really good progress on a kind of voluntary partnership approach with a terminal date for red diesel, but with a number of activities going on before that to help the operators.”
Others are frustrated at the lack of government support.
“Red diesel is going away from this sector but… there are no grants to support the shift to alternative technology. It’s just a hit to the operator’s pocket,” adds Scott Dargan, Carrier Transicold’s managing director for the UK and Northern Europe.
Some operators have speculated that white diesel’s greater value and saleability could increase the risk of theft from on-site bunkers, too.
Environment
The government’s targeting of red diesel is understandable against the wider environmental agenda and some of the emissions figures associated with TRUs. A September 2021 report by the Zemo Partnership (formerly the LowCVP) and Transport Scotland did exactly as its snappy title – ‘Emissions Testing of Two Auxiliary Transport Refrigeration Units’ – suggested.
It concluded that all auxiliary TRUs in Scotland produce annual averages of 14-43kt CO2e greenhouse gases, 104-311 tonnes of NOx, three to nine tonnes of particulate mass and 11-
32×1021. In short, pretty mucky.
However, Brennan has called such analyses into question, as he believes they don’t accurately reflect real-world applications. “The fridge is only operating to get the environment it is chilling down to the temperature it needs to be, at which point it turns off – so it’s not a continuous cycle.
“I don’t want to overstate it, because ultimately, the future of these fridges is not diesel.
Nonetheless, the critics are absolutely vociferous about it, and tend to exaggerate the output based on unrealistic kinds of modelling.”
Burning lean
Vans and rigids are less at the mercy of the red diesel ban than anything pulling a trailer, because their TRUs are more likely to be powered by the vehicle’s primary engine, rather than an auxiliary unit. Such systems typically use a pump or an alternator hooked up to the engine to generate electricity and, if it’s a Euro VI diesel, you’re in the clear in every sense.
Articulated trucks are the tricky bit because the trailer needs an independent power source, but if you’re not in a position to kit out your fleet with new, clean tech, then it’s worth investigating where and how to reduce existing running costs.
Hauliers with a fuel surcharge clause in their contract may be able to invoke it against the red diesel hike, so that’s the obvious place to start. As for the units themselves, monitoring is the answer, according to David O’Gorman, Thermo King’s regional director for North and Western Europe.
“Do you need to have your refrigeration unit running all the time, or can you tweak the setting so that when the temperature is satisfied, the engine switches off and you stop burning fuel? If your ice cream is at -20°, and at -20° the engine stops, at what point do you actually restart the engine – when the air temperature gets to -19°, -18°, -17°?
“We look at optimising the air flow in the cargo space and other things that don’t necessarily depend on the refrigeration unit, but on the customer’s operation. We have been able to tell some customers that the reason the fuel consumption on this particular unit is so high is because, every week, you run it for about 12 hours with the back doors open, which doesn’t help.”
There are also efficiency techniques for operations who frequently open and close cargo doors. O’Gorman suggests setting the TRU to a lower speed and an automatic stop-start system, triggered by opening and closing the doors.
Alternatives to diesel
Diesel TRUs may be the industry standard but there are other, cleaner options. Alternator- and pump-based units can be applied to trailers as well as rigids, and then there are fully electric systems. They are, however, more expensive than diesel TRUs, which explains why they haven’t been adopted en masse.
Manufacturers claim that some alternator and pump units will pay for themselves quicker than you might think, because of the lower maintenance and running costs. “It’s kind of a misconception that it takes a long time to get return-on-investment,” explains Jon Jerrard-Din, UK area sales manager at Thermo King, referring to its alternator based Frigoblock units, “it can be as short as 18 months, and it’s rarely more than into the third year. The vast majority of operators run them for eight to 10 years… [and] the unit costs the same to maintain when it’s eight years old as it does at one and two years old.”
The downside with such systems, according to Brennan, is the manual aspect of hooking them up to the tractor unit.
“There are differences between the connections for different types of manufacturers [and] you’ve also got to make sure the driver remembers to plug that thing in.”
Fully electric TRUs are in their infancy. Carrier Transicold launched its Vector eCool system in October 2020, which it claimed at the time was “the first fully autonomous, all-electric engineless refrigerated trailer system”.
It converts kinetic energy from the trailer axle and brakes into electricity, which is then stored in a battery pack to power the refrigeration unit. One such model was fitted to a Gray & Adams demonstrator trailer last year and, in December, refrigerated operator Samworth Brothers Supply Chain announced it had fitted six to its trailers after a four-week trial with the demo unit.
Fully electric units are as good as it gets on environmental grounds, but they are not cheap to buy. Carrier says the operating costs, at least, are less than those of a diesel unit, but speaking to Roadway last year, Gray & Adams’ sales director Andrew Brown, said, “There’s no economic stimulus to running an electric fridge. If you look at some of the companies, like Waitrose, that use electric fridges, they don’t get any payback; they buy them purely for environmental reasons.”
Nonetheless, Brennan says demand for electric units is outstripping supply – yet another obstacle for keen operators.
Yet another diesel alternative is Hulsteins’ Ecogen range, which effectively converts existing diesel TRUs to electric. The systems run off the engine’s power take-off (as do some other pump-driven units, such as Carrier’s Eco-Drive) they generate 400 volts and connect to the fridge motor via a five-pin plug.
“Fit one to a tractor unit, and every trailer it couples to, it turns into an electric fridge,” explains UK managing director, Graham Usher, “in terms of fitting, the cost is about £16,500, so it’s about £300 per month over a five-year period, including maintenance.”
The unit will allegedly connect to more or less any existing TRU and, accounting for the tractor engine’s work to power it, it’s said to generate a 75-80% saving on diesel.
Site-seeing
The challenges for temperature-controlled operators are far from limited to the fridges themselves. On-site electric infrastructure is a huge stumbling block, irrespective of what powers the equipment on the move.
Most modern TRUs can be plugged in and run off the grid while the vehicles are stationary, but many depots lack such a capacity. New, purpose-built developments are more likely to have beefed up electrics, but existing sites powered by an ageing part of the grid, probably can’t handle much in the way of charging – which is when auxiliary diesel comes in handy.
“We talk to more customers that don’t have three-phase plug-in than do,” says Dargan, “and we’re talking to customers that have hundreds of trailers on bays with diesel engines running, because they don’t have the ability to plug in. The difference is, they can still run with diesel. If you take that away and go all-electric, and you can’t plug it in to top the batteries up, what do you do?”
It’s one of the reasons why he thinks that, despite the tax hike, diesel is “still going to be mainstream for the foreseeable future.”
Assuming it is, hauliers should keep one eye on the UK’s mushrooming low-emission zones. None of them currently apply to TRUs, but Usher reckons authorities “are cottoning on”.
Zemo’s report referenced “retrofit solutions” such as diesel particulate filters, which could come increasingly into focus. It claims they are “modest cost”, but Usher reckons a power takeoff is a better bet if your vehicles don’t already have one, as it broadens the options for non-diesel refrigeration.
“I’ve been telling customers for the last year/six months until I’m blue in the face: get a PTO fitted if you don’t have one. It is next to nothing over the cycle of the truck, but… when the authorities say, ‘you can’t come in with that dirty diesel engine unless you fit a particulate filter,’ that’s going to be a few grand.”
Supply chain rethink
The last one to watch is Paris, which will ban all diesel vehicles in 2024. That’s obviously less than two years away, and its success or failure will likely be a signpost for other cities thinking along the same lines.
“How are we going to keep our shops fully stocked?” asks Brennan, “how are we going to shuttle product in and out of the retail outlets and the restaurants and homes? I think the way in which we design our supply chain infrastructure has to be rethought from first principles on that basis.
“There’s a fundamental issue around servicing and feeding our cities, and I think cold chain is on the front line.”
This article originally appeared in the April edition of Roadway Magazine