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Ryder CEO Greg Swienton on beginning its 250 vehicles that use natural gas and the benefits of natural gas in the long term.
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Thank you very much natural gas prices are back in the Green today after hovering around ten year lows week after week but we've got somebody -- says the drop in prices.
Is helping his business grow the stock was up today Greg -- -- the chairman and CEO of Ryder System.
He's joining us live now in a Fox Business exclusive where you did very well 37% increase in first quarter profits very nice number.
And a lot of that had to do with let's just get to that part better used rental truck sales.
Let me get to that part first people are buying these things in droves now what's going on -- that part of the business.
Well part of our business model is that the end of its life cycle natural life cycle after -- -- been rented or it's been leased and maintained.
They go to the use truck market.
And over the last couple of years the use truck market has been very strong prices are up significantly for trucks as well as tractors.
And I think because there is more demand.
And the units that we are selling our older and they're also grandfathered.
Prior to the most recent more expensive EPA mandated in the -- standards so I think.
You have a combination of things going out little bit more demand and a desire for the grandfather trucks that you get at a much lower price.
Okay it is still very much about a consumer that is looking for the best possible deal and that brings us to natural gas.
Natural gas trading just slightly above two dollars per million British -- -- units today but it'd been below it.
This makes you -- your hands together -- -- because you are driving a fleet now that it's very much powered in part by natural gas what is that doing.
In a good way for your bottom line Greg.
Well it's not big enough yet to make -- material difference this is.
Obviously an investment that we're making in the future in terms of our technicians.
Are facilities.
And our ability to handle heavy duty equipment natural gas powered.
For our leasing.
And rental customers and -- and we maintain.
In so in the large scheme of things you know 250.
Natural gas units -- recently.
Put into the in the service out of 200000 is small.
But I think it sends an important message about us to the marketplace about having a leadership position.
Having units available and when the customers want them we can get them we can take care of them and maintain them for them.
At at what point do you foresee -- paying off of course you can listen that the smartest business people.
Try and get in their way before it actually turned so that you're able to say we're in a great position at this point because we started -- This seems to me to be purely business decision.
But it's it's certainly nice that -- it's a cleaner burning fuel and there's a lot of it and we don't have to put a depend on other countries for it.
But is there a point on the calendar where you say we really believe that an a couple of years there will be widespread adoption of natural gas power trucks.
I think it will be natural that they'll be large uptake because so many customers are asking about the service.
For our investors were already making making good at good return on him now but in terms of materially affecting our financials that'll be a few years out.
I think that when customers.
Have heard in fact that we have this available.
We're hearing from new non customers prospects who -- intrastate and talking about our outsource services.
Merely because we now have this so I think you're gonna see an acceleration in a pick up overtime it's gonna be meaningful for customers they're gonna be able to say yes we have cleaner burning fuel and -- -- cost effective it's it's under our own ground it's good for our national security.
And I think it works for -- for all parties in the long term.
Greg go we're running out of time but -- raised to 2012 sales outlook for the economy it is still very tentative but I'd love to know from -- a business -- as we go into what is expected to be a very.
Very tough election here tell us how it really feels to be a business guy out there are things getting slightly better markedly better.
Slightly better.
And uneven and bumpy I would say that you know our our value proposition is as good as ever but ultimately customers need to have freight to move shipments to move.
And when you look at some of the fundamentals still a lot of on -- point and unemployment housing is still weak.
We had a soft durables report today so there's always something in the mix that you have a pay attention to so I think we're making progress -- But nowhere near where we should be at this point in recovery.
-- want in the CEO of writer thank you very much we love to have you on it's a great proxy for what's going on out there in the moving in the -- systems thank you so much.
Thank you gonna be with you.
