KAG: Building A Business To Meet Hydrogen Demand
As published in gasworld US edition | June 2, 2023
By Molly Burgess | Features Editor
Hydrogen transportation demands are on the rise for the Kenan Advantage Group (KAG). So much so that the Ohio-based truck transportation and logistics provider has invested in three new sites and committed itself to a new mission to enhance business.
As part of this mission – One team driven to make a difference – KAG wants to not only prioritize its customers, but ensure that its employees have the best possible work experience. To drive this, the firm recently opened a National Operations Center and two rehabilitation facilities. Together, these sites are designed to best support the delivery of merchant gases across North America, provide cryogenic trailer rebuilds, repairs and maintenance, and provide additional KAG support as needed.
“We had to make these cornerstone improvements for our business,” Melissa Bradshaw, Vice-President of Business Development and Operations at KAG Merchant Gas, tells gasworld.
Located in Amarillo, Texas is the KAG Merchant Gas National Operations Center. Here it develops its customized solutions for customers. And the customization offering is quickly becoming important, as customers are busy right now striving to best utilize their assets and expand to meet new demand.
“We offer customizable full-service solutions including transportation, safety support, maintenance, and logistics services, and we provide dedicated, spot, project, drayage, and emergency call out transportation support, for service to the molecule producer and to the end-user,” Bradshaw explains.
“Many of the conversations we’re having today are around the basics of hydrogen transportation, in particular, which include logistics, maintenance, and safety. It’s a matter of how to support the infrastructure to increase the utilization and creation of more hydrogen.”
Also located in Texas is one of the company’s two trailer rehab locations, with the other located in South Bend, Indiana. These sites contribute to KAG’s unique business model, which allows any of the company’s drivers to stop at any KAG location if they require repairs or support.
“As our company has expanded, our footprint has grown,” Bradshaw says. “For example, a California-based KAG driver transporting hydrogen across the country can pull into a KAG shop in Toledo, Ohio, for a repair. That is a bit special. It provides better service and value to our customers as well as quick, convenient support for our drivers.”
Growing with demands
KAG’s offer is only set to continue growing as it expands across North America. Today, KAG’s North American network operates in 42 states, with the capability to deliver to all 48 states in the continental US, plus Hawaii, Canada, and Mexico.
This footprint has been enhanced through several acquisitions, two of which were leading cryogenic transporters Jack B. Kelley and Cryogenic Transportation. “The Merchant Gas division began in 2010 with the acquisition of those two cryogenic transporters and has continued to grow since. Today, our KAG Merchant Gas operations platform has over 50 years of hydrogen transportation experience,” says Bradshaw.
“Today we are actively transporting liquid and compressed hydrogen. We are also proud to supply stations in California and we’re involved in the transportation of hydrogen across the country, to be utilized in many applications.”
With investment going into domestic energy production and manufacturing that includes tax incentives for low carbon hydrogen production and advancements in hydrogen fuel and technologies, KAG has been receiving numerous hydrogen proposals and project requests in recent months.
A growing market also means growing customer demands. “Supply chain challenges over the past years have created the need for customers to become savvier about how molecules are procured and arrive in their tanks,” says Bradshaw.
Challenges to success
With such a demanding market, and many needs to meet, ensuring success doesn’t come without challenges. Unfortunately for trucking companies, these challenges mostly lie in supply chain, with the ever-rising cost of products and still-extended delivery times.
“We’ve certainly seen the cost of tractor and trailer parts increase,” Bradshaw confirms. “Lead times on tractors and trailers are still longer than we’ve previously experienced.”
But this headwind hasn’t stopped KAG from offering its less than 72-hour service.
“Customers are looking for more expertise and detailed service in our space. Our solution to provide less than a 72-hour service, despite challenging supply chains, has been a great success.”
Another challenge that KAG is navigating well, it says, is driver shortages.
“We have done a great job when it comes to recruiting drivers,” Bradshaw enthuses. “Our daily operations call with our recruiting team ties us in closely and keeps up driver recruitment, which is a major focus.”
Bradshaw says one of the best parts of her job is when she visits KAG’s drivers, technicians, and support staff. “I thank them for doing their job and doing it well, because without them we wouldn’t have a company,” she says.
But while all trucking companies are tackling the driver shortage situation, it has noted how the effect has been felt by others. “With supply chain issues and driver shortages, we’ve seen an increase in force majeures, which has created challenges especially for the smaller users of industrial gases.”
To ease this strain, KAG has been able to create solutions for emergency call out situations and to create relationships with end-users who were looking for additional support, says Bradshaw.
A clean future
KAG’s involvement in the hydrogen market is only set to grow. And with recent incentives from the US government, this growth could be quicker than the company originally projected.
“With recent incentives in the Inflation Reduction Act, as well as advancements in technologies, we look forward to providing even more support in the hydrogen and renewable space,” Bradshaw says.
“We believe our role in hydrogen transportation will continue to grow and we want to be the premier transport and service provider in the hydrogen space,” she concludes.
Challenges to hydrogen transportation
Key challenges to hydrogen delivery include reducing cost, increasing energy efficiency, maintaining hydrogen purity, and minimizing hydrogen leakage. And, according to the Department of Energy, further research is needed to analyze the trade-offs between the hydrogen production options and the hydrogen delivery options when considered in the round as a system.
Building a national hydrogen delivery infrastructure is a big challenge. It will take time to develop and will likely include combinations of various technologies. Delivery infrastructure needs and resources will vary by region and type of market – for example, urban, interstate, or rural. Infrastructure options will also evolve as the demand for hydrogen grows and as delivery technologies develop and improve.