7th Integer Emissions Summit & DEF Forum USA 2014

The 7th Integer Emissions Summit & DEF Forum USA 2014 was held Oct. 28–30 in Chicago, and featured a solid turnout in the hundreds and numerous discussion on a range of issues facing diesel exhaust fluid. Here are some session highlights form the third day of the forum that was attended by FMN editor Keith Reid.

 

Logistical Optimization for DEF in a Rapidly Growing Market Compared to Other Markets

Jeff Lewis, Vice President – Sales, Airgas Specialty Products Inc.

Lewis discussed a range of logistical issues with DEF. With trucking, there is currently a serious shortage of drivers, and rail transport faces a shortage of railcars. In densely populated areas such issues might not be that critical, but the U.S. market is so spread out geographically that potential supply issues exist for 2015 in less populated regions. With the product itself, efficiencies can be gained shipping concentrate or solid prills; however, properly reformulating those into on-spec DEF raises quality control concerns as well as some degree of capital expense with the production of high-quality water for the product.

 

Panel Discussion: Evolving DEF Distribution

Moderator: Ibi Idoniboye, Market Analyst, Integer Research Ltd.

Panelists:
• Alan Smith, DEF Business Development Manager, Brenntag North America, Inc.
• Geoff Bohlender, Executive Director PPC DEF Solutions & Marketing, PPC
Lubricants
• Peter MacEwen, General Manager, Commercial Fuels & Special Projects,
MacEwen Petroleum Inc.
• Andy Austin, Senior Vice President of Specialty Products, Mansfield Oil
Company

Issues relative to DEF on-highway distribution were covered in this panel discussion. The fairly rapid move from packaged to bulk, and then on to larger bulk solutions was covered. The challenges expressed tend to center on a sufficient margin for the distributors. The “race to the bottom shakeout” was a theme, as essentially there are more competitors now for a product with mixed but depressed volumes compared to such products as motor fuels. Many of the capital distribution costs, such as trucks and driver, are similar (and high) though with DEF providing much less utilization of the assets. A motor fuel tanker might run multiple shifts per day while a DEF tanker might run one shift. This particularly comes into play in rural markets where delivery distances are great but the gallons dispensed are not. It was noted that many lackadaisical habits that evolved early on, such as driving an exorbitant distance to top off a tote, are likely going to go away and those customers will have to transition or be transitioned to a more efficient service model. The need for a dedicated DEF pricing index was also discussed.

The market is also going to be tighter, and for the end user supply less certain.

 

Case study: Independent Truck Stop Solutions for Bulk DEF

Tom Boutwell, Vice President, Purchasing, AMBEST Inc.

Boutwell noted that there was not necessiarily a ROI argument for the product just yet, but that major fleets have mandated their drivers fuel where they can also top off the DEF tank. If you do any significant amount of diesel business then DEF is hard to put off. He did note that a DEF top off in the service center (and charged) as other work is conducted can generate some useful revenue.

 

Panel discussion: Optimum DEF equipment solutions

Moderator: Robert Renkes, Executive Vice President, Petroleum Equipment
Institute (PEI)
Panellists:
• Dave Polak, President, Managing Partner, Blue1USA
• Rick Whately, Regional Sales Manager, Xerxes Coporation
• Alberto Febre, Sales Development Manager – Americas, Micro Matic USA
• Steve Cox, National Sales Manager, KleerBlue
• Norm Winkler, National Sales Manager, Titan Chemical Transfer Solutions

In general, the industry has managed to avoid quality concerns by focusing on proper materials and practices, and has been keeping up with the move from mini-bulk solutions to AST or UST dispensed solutions. It was noted that there is no cookie-cutter solution for the market, but that a range of solutions are required to meet the needs of DEF marketers and their customers.

The equipment side saw early exuberance that was hit by the 2008 recession, then a recovery that continues with the growth of SCR engine penetration through steady fleet turnover.

Off-road DEF was discussed (and also covered in later sessions) regarding the potential need for a closed-fill system for off-road equipment that operates in dusty, dirty environments. The need is not absolutely assured, but at the same time no potential solution is being established should that need arise.

 

The day was rounded out with a variety of discussions relative to off-road/non-road sectors.

End-User Off-Road DEF Experiences

• Luke Van Wyk, General Manager, LDJ Thunder Creek

 

Adoption of DEF in the Non-Road Sector

• Bryan Brunner, Marketing Leader – Tier 4 HHP Development, Cummins Inc.

 

 

Panel Discussion: Development of DEF in The Non-Road Sector

Panelists:
• Luke Van Wyk, General Manager, LDJ Thunder Creek.
• Bryan Brunner, Marketing Leader – Tier 4 HHP Development, Cummins Inc.
• Alan Smith, DEF Business Development Manager, Brenntag North America, Inc.
• Joe Hiznay, Business Director, Colonial Chemicals Co.

While volume may be an issue in some transportation markets, large generators serving the fracking process and large mining operations with huge equipment is can require thousands of gallons of DEF per week. The sites may be remote, but the opportunity is there for local marketers to overcome many of the on-highway logistical concerns with rural markets and DEF. As noted earlier, potential contamination issues and the possible need for a closed-filling solution were raised. Also, in the case of huge machinery high fill rates are required to fill large DEF tanks, and there can be little to no added downtime in the process  as minutes can be measured in hundreds of dollars. Big opportunities but special customer service is required.