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Chris Nordh – Director, Advanced Fuels & Strategic Infrastructure

The Game Changer in Transportation

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Ryder Corporate Overview

Company Overview: Fortune 500 Ranking – 404 Total Revenue $6.2 Billion US Locations 850+

200+ On-Site Total Employees 29,400 Total Units Under Contract 150,000 Total Units 200,000 + Global Reach

Provider:Fleet Management Solutions

Leasing Truck Rentals Used Vehicle Sales Maintenance Fuel Safety Services

Dedicated Vehicles Drivers Routing Scheduling

Supply Chain Management Acquisition of Raw Materials to Delivery of Finished Products

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Ryder natural gas fleet innovation program

• Investing in Natural Gas since 2009

• Deep knowledge base► 500+ NG Tractors/Trucks 6.14► 20,000,000 miles run on NG► Fuel station networks, design and

layout► Natural Gas engine technology ► Facility design and layout► Facility modifications required to

maintain compliance to NFPA codes

• Customer access to fleet innovation:► Latest natural gas fleet technology► CNG & LNG fueling infrastructure► Maintenance & roadside services► Safety and technical expertise► Sub vehicles

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Not the first time we try natural gas!

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This time is different!

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US behind the rest of the world in NGV use

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However… When we decide to do something, we become #1

► We have access to capital

► Entrepreneurial spirit

► Most capable engineering minds

► Government support…

Will lead to jobs, exports & growth

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Made in America Nat Gas Engines & Technology

► Cummins Westport► Westport► GM

Compressors► GE► ANGI► IMW

Tanks & Systems► Quantum► 3M► Chart► Agility

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Complexity

Diesel vs. NG CNG vs. LNG Where to Fuel Time per Fueling Frequency of Fueling Range vs. Weight vs. Cost

Uptime of Equipment Driver Hours Lease vs. Own Where to Maintain Total Cost of Ownership (TCO)

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Vehicle Trials – What to Expect

Validate Vehicle Performance► Engine capabilities► Vehicle reliability► Driver acceptance

Validate Existing Fueling Stations► Fuel fill time► Station accessibility

Financial Results► Will not reflect economies of scale

Leverage buying power at retail stations Leverage fuel volume for 3rd party station builder

Ryder Rental Trials 12L ISX-G

Michigan Texas Georgia Louisiana California Utah Arizona

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Larger Implementation Strategy

Leverage Economies of Scale► Create plan & TCO budget to buy/lease/convert enough vehicles to

generate single location volumes in the 200,000 – 500,000 DGEs per years.

New dedicated NG equipment is most advantageous OEM with new engines

Glider kits with remanufactured engines Dual fuel technology – verdict still out but positive feedback

► Back into the required fuel cost that provides required ROI► Identify location for station that minimizes operational impact► Create partnership with a fuel station builder► Hedge your bets = Game changer!► Execute vehicle implementation based on timeline for station completion

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How is Ryder helping offset Increased costs?

Buying tank systems directly from tank manufacturer► Quantum technologies

Installing tank systems ourselves► Reduces install cost► Reduces transportation cost► Reduced vehicle lead time

Increased residual values► 12L with medium sized tank systems (115DGE – 140DGE)

Create the right scale of implementation► Leverage multiple customers into a single fuel station

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Quantum 123DGE Back of Cab CNG tank system

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Regulatory Environment

Usually not a positive!► EPA 2007► EPA 2010► EPA 2013/14

Obama recently told EPA and DOT to create & issue new fuel efficiency and GHG standards for trucks by March 2016 – effective 2020

Diesel operations will continue to get more expensive, as natural gas operation will continue to get cheaper to buy & operate

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Conclusions

Given the right scale, natural gas applications make financial sense today, without incentives.

Infrastructure players will build stations anywhere you want, given base load volumes.

Comparative costs will continue to improve

Industry has a solid base for continued success and expansion

Q&A

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Maintenance Considerations

Shop upgrade costs - $300,000 - $500,000 per shop► NFPA vs. Fire Marshall

Technician Training & Tooling $30,000 - $80,000 Vehicle premium

► CNG vs. LNG► Range vs. Weight vs. Cost

Maintenance Cost Increase!!!► Expensive Spark Plugs► Tank inspections / vacuum seal► Component failures► Fuel system complexity► Increased Inventory

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On & Off Road, Marine & Rail

CR England just signed on with Shell for LNG stations Alpha Coal West (off road) are doing dual fuel vehicle applications Marine leapfrogging from bunker fuel to LNG

► Golf Coast Shipping (Gulfport, MS) just launched 1st of 6 302’ long LNG dual fuel vessels.

Railroad industry evaluating CNG & LNG, Dedicated & Dual Fuel► Indiana Harbor Belt Railroad to convert 31 locomotives to CNG► Berkshire Hathaway testing these technologies in a number of their

railway companies

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Shop Retrofit Considerations

Methane Detection► Ryder requires for both CNG & LNG

Electrical► Relocate electrical outside classified zone (18”)► Explosion proof lighting

Facility Heaters► No ambient heaters because they get to 900 degrees► Forced air

Adjacent Occupancies► Install audible & visual alarms

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Shop Retrofit (continued)

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Shop Retrofit (continued)

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Natural Gas Vehicle Running Costs

• NGV Running Cost Analysis► Data set = 170 Tandem Axle NGVs► Freightliner M2-112 Chassis► Cummins 8.9L ISL-G► CNG and LNG configurations

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Natural Gas Vehicle Running Costs (continued)

• DATA SET► 170 NGVs and 1,811 Diesels► 2010 EPA Diesel models► 4,000 – 6,500 miles per month ► All Freightliners

• 34 Month Cumulative Comp► $3,370 Cumulative increased RC► ~$99 / month► ~1.9c / mile

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Maintenance - 8.9L Cummins ISL-G

• Failures due to installation & handling procedures► Premature spark plug failures

► Handling & Installation of spark plug► Boot & Plug► Separate install wrench & torque spec

► Coil pack cracking► Installation process

► Overhead set► Outside tolerance spec

• Known Issues► Manifolds► Pistons► Turbos

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Silk Glove Maintenance!

Torque value: 38 Nm = 28 ft-lbs

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Original ISL G Exhaust Manifold

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4 port and 2 port Design

Current Symmetrical Exhaust Manifold 3 port and 3 Port Design

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Fuel System – Lessons learned