Being part of a top 20 ASX listed company which is involved in many diversified fields including gas exploration and production, power generation and energy retailing, means Origin Energy's transport fleet has to be treated like any other arm of the business. For Origin, the task of moving gas around Australia both at sea and on the road is a major part of their business.
Origin is Australia's largest energy retailer having 4.5 million customers as well as being responsible for around 13 per cent of Australia's electricity generation. The company is also deeply involved in developing major coal seam gas and liquefied natural gas projects, while, at the same time, investing in renewable energy technologies like geothermal, wind, hydroelectricity and solar power.
The company employs over 5200 people and has evolved out of the demerger of Boral in 2000. From its origins in the 1940s, Boral had developed large interests around Australia in both energy and supplying building and construction materials. The two halves of the business are now separate entities with the construction side retaining the original name and the energy side becoming Origin Energy.
The decision by Origin, taken in the past 12 months, to just work with a single truck manufacturing group was based on a number of factors. They were interested in contract maintenance, being part of the truck buying deal. They also needed national coverage in metro and regional areas as the company has depots all around Australia being serviced by their vehicles. Another important aspect for Origin was being able to get access to original equipment manufacturer engineering expertise and services. They also needed trucks to be supplied over a three-year period and for any supplier to provide them with trucks to suit every application for which they required vehicles.
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Volvo, Mack and UD were confident they could cover every aspect of the Origin transport organisation with the vehicles they have available on the Australian market, to a large extent. Unlike most applications, most of the LPG delivery trucks need to spend a lot of time with the engine running while stationary, the pumping equipment used to deliver gas is driven by an engine PTO.
Another important aspect of the deal required the manufacturer to supply training to Origin employees in order for them to get the best out of the vehicles with which they were being supplied. Origin also prefers driver's side airbags, automatic or automated transmissions, airbag suspension and three points of contact for entry and egress from the vehicle. Origin looks at acquiring 40 trucks each year to keep the fleet fresh and keep turning over trucks as they come to the end of their working life for the company.
“We, at the Volvo Group, have actually had the opportunity to become the sole supplier of trucks to Origin,” says Cris Gillespie, UD Marketing Manager. “It's not often that a customer will come to you and say they want to deal with you as a sole supplier.”
The Origin Energy fleet of trucks transporting LPG around Australia numbers 240. It is a very diverse fleet and works out of bases all over Australia, in all the capital cities and most major regional towns.
Origin uses a number of specific trucks for the major applications within the fleet. A large section of the fleet comprises of rigid cab chassis fitted with gas tanks for retail delivery to domestic gas customers, for in situ gas refills. The company has used a wide variety of brands of truck in the past but, with its agreement with the Volvo Group, new trucks will tend to be UD PK models.
Cylinder exchange distribution for smaller gas deliveries is expected to be handled by UD Condor models in the future. Meanwhile, distribution and line haul work will be handled by a mixture of Volvo and Mack prime movers.
“Volvo Group Australia can supply 99% of our truck needs, there is just a few light duty trucks they can't supply,” says John Murray, Origin Energy Fleet and Mobile Equipment Operations Manager. “The majority of our fleet is rigid-based trucks onto which we fit our tanks. It is important for us that these trucks have the right subframe fitted. For us to change our supplier is quite a big ask because of this.
“The width of the chassis on a Volvo truck has been consistent over a long time. Things like the spacing between the cross members are very important because where the nozzles are placed on the tank fits to the position of the cross members. So for us to look at a supplier and consider change there is a huge onward cost to consider. We would have to do major modifications to our barrels. We have to think over the long-term because if we want to make a change it is going to cost us.”
On average, a tank fitted to a truck will last five truck lives. The truck is, in effect, a mobile platform for carrying around a gas container which has a considerably longer life than the truck. The company still has some barrels fitted to the rear of trucks that were being used back in 1983 when the company bought its first Volvo truck.
“Actually, the cab chassis is the cheapest part of a gas tanker,” says John. “It is all the ancillary equipment we have to fit which costs the money. Because we keep the barrels for upwards of 30 years, we really have to look after the gas containers and bodies. This is the reason we specify airbag suspension.
“One of the things we are looking for when we are buying a truck is access to the manufacturers engineering services. We spend a lot of time between the bodybuilders and the truck manufacturer's engineers designing the mountings to suit the barrels. On a rigid tanker it is not a solid mount, it's a flexible mount. So we have to meet the truck manufacturers criteria and ensure that it's correctly attached to the chassis. It is vital for us that our asset, the barrel, is protected in order to get the manufacturer to sign off on the guarantee.”
Driver acceptance of the trucks being used is also an important factor for Origin Energy when looking at the vehicles they are going to use. The company will take truck drivers out with new vehicles they are considering buying and get them to put the truck through the kind of things they expect to happen on a day-to-day basis. The company then puts together assessments based on the driver feedback that results from these exercises. This helps them develop the key criteria they need to ask for when specifying a truck.
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“To give you an example, we wouldn't buy a cab chassis if the driver group wasn't happy with it,” says John. “When we assessed the Mack Trident, there were two points on which the drivers expressed a concern. One was the driver's door did not open to 90 degrees and the other was the use of a high intake snorkel. They had concerns about getting in and out of the truck safely and the air intake causing a blind spot.
“We worked with Mack on this and they have managed to supply us with a door which opens to 90 degrees and reduced the snorkel to something which just sits on top of the air cleaner. Of course, to the purists that is ruining the Mack and its looks but for our business it was something that the drivers had concerns about.”
The provision of driver training along with the trucks which they are buying is a very important point for the Origin Energy team. The company makes sure that there is a complete understanding by the drivers of any new trucks arriving through familiarisation training. Changes to the cabin, or design features are brought home to the drivers and online training is also made available to the drivers.
When each truck is delivered to a depot, a driver trainer and someone from the bodybuilder will also turn up and run through how the truck will function with those operating the vehicle.
“I suppose, driver familiarisation is probably the main thing we are looking for from driver training,” says John. “Drivers are coming out of something like a Mack Midlum into a UD and, at the same time, going from a manual transmission into an automatic. We have discovered we need to spend a lot more time on the training of drivers to transition from manual to auto. They need to develop an understanding of what to do when going down a hill, for example.
“Initially it is driver familiarisation but then it's about developing good driving techniques. Fuel is a huge cost for us, so out of the driver training we are expecting to get our drivers to improve their fuel economy. We track it rigourously now, and after the training has been done, we will track it again.
When specifying new trailers, as they come onto the fleet, Origin Energy has all of them fitted with EBS systems. The company is also going through a program over the next 12 months looking at its older trailers and assessing the possibility of upgrading them from their older braking systems to an aftermarket EBS, with a new airbag suspension system also included.
The company has trialled a number of solutions using LPG but so far the results have been inconclusive. Origin has not seen enough evidence to demonstrate that it is worth its while to use LPG as a fuel. The company is also a terminal to terminal operator and has spent some time investigating using CNG or LNG as a fuel but, to date, it has not been convinced of the effectiveness of any of the systems it has seen.
Although Origin Energy set a number of criteria up when specifying vehicles, the intention behind them all is to keep the costs of delivering LPG to a minimum. The costs are quantified in simple cents per litre delivered.
“We are in a retail market in our LPG business,” says Murray Harris, Manager Corporate Procurement at Origin Energy. “To a degree, certainty of delivery costs helps us in our sales of the LPG product. The option of contract maintenance also gives us that certainty in controlling our costs.”
It is probably the result of being part of a much larger industry group, rather than being an operation just supplying transport solutions, which means Origin Energy look at its business in a different way than many transport operations. However, the problems the company may have to solve are just the same, as controlling costs drives most decisions and keeping drivers up to date with driving techniques and incentivised to improve performance proves vital.