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Industry giants are going green to get the green

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Both UPS and FedEx have invested in alternatively fueled vehicles

By John D. Schulz, Contributing Editor
September 28, 2010

Transportation companies, spurred on by shippers and manufacturers, are joining the green revolution in a big way.
 
Whether it’s alternatively fueled vehicles ranging from compressed natural gas to experimental hybrid trucks, transport companies are racing to be the first to discover the breakthrough technology that allows the nation to wean itself off imported oil. Or, rather, breakthrough technologies.
 
UPS looks at alternative fuel technologies as a multimodal approach. We don’t see one technology as a silver bullet to solve the fuel equation,” says UPS spokesman Michael French.
 
French said the green revolution in this country is important for the 103-year-old company “in the sense we have been striving for efficiencies since we were founded in 1907. “We’re always looking for ways to be more efficient and more energy friendly. It’s not just good for customer, it’s good for us.”

Currently UPS operates 2,022 alternative fuel vehicles in its fleet of 95,244 total UPS delivery vehicles, but says it is continuing to develop and expand its alternative fuel fleet.

 
“We treat our AFV fleet like a rolling laboratory to find the best technology for the best geographic location,” French said. “Our vehicles are the lifeblood of our operations. We want to make sure they are using fuel as efficiently as possible.”
 
Instead of one breakthrough technology, UPS says transportation companies are likely to evolve to use different technologies in different parts of the country in different operational environments. Hybrid electric vehicles might work best in congested cities for pickup and delivery during the daytime so they can be recharged at night. Compressed natural gas (CNG) might work best in rural areas. A futurist would say solar-powered vehicles might work best in the desert southwest where the sun is plentiful—and free.
 
“We see good applications for each one, depending on our particular situation in that area,” French said.
 
Today, UPS operates one of the largest private fleets of alternative fuel vehicles in the industry – more than 1,900.  Since 2000, UPS’s “green fleet” has traveled more than 165 million miles.
 
UPS is hardly alone. Rival FedEx Corp. last summer expanded its alternative energy vehicle fleet by with four purpose-built electric trucks—optimized for electric operation from the wheels up—operating in the Los Angeles area last June. Those vehicles joined more than 1,800 alternative-energy vehicles already in service for FedEx around the world.
 
FedEx has a history of such innovation. In 2004, it says it was the first global company to invest in hybrid-electric commercial trucks. It later introduced an even cleaner all-electric parcel delivery truck.
 
FedEx Chairman, President and CEO Fred Smith says his company is making these investments to speed the transition to a cleaner transportation system.
 
Rather than creating its own proprietary technology, FedEx using the marketplace to spur solutions. It bought its first North American all-electric vehicles from two different suppliers to evaluate the robustness of that technology for demanding daily FedEx Express deliveries in the Los Angeles area and provide information to help guide future FedEx vehicle purchases. Two of the all-electric trucks come from Navistar, and are based on the Modec design already operated by FedEx in Europe. FedEx already uses 10 such trucks in London and five more are on order for Paris.
 
Two more all-electric vehicles were bought from a different manufacturer for delivery to the Los Angeles area later in 2010. Both sets of electric vehicles are designed with a range that allows many FedEx Express couriers to make a full eight-hour shift of deliveries before their vehicles need recharging.
 
During testimony before Congress last summer, FedEx founder Smith urged the nation to adopt a comprehensive program to encourage affordable electrification of local transportation to foster more domestic energy production, less reliance on imported oil and an overall reduction of greenhouse gas emissions.
 
In his annual report to shareholders, Smith noted that FedEx has devoted much time and money this year to advocating a shift in how the U.S. powers its transportation sector — by using electricity as the power source for short-haul ground vehicles.
 
“Electricity is diverse, domestic, stable, and a fundamentally scalable energy source with fuel inputs almost completely free of oil,” Smith noted.

Vehicle miles fueled by electricity emit less carbon than those fueled by gasoline, even if all of the electricity used to charge the vehicle is generated through conventional sources, he added. High penetration rates of grid-enabled vehicles propelled by electricity and stored onboard in a battery “could radically reduce” oil consumption in the United States,” Smith noted.
 
“Electric vehicles would strengthen our economy, reduce national security and economic risks, and dramatically reduce emissions of greenhouse gases,” Smith said flatly.
 
FedEx says it has the industry’s largest fleet of hybrid electric package-delivery trucks and it is expanding that fleet, but not just by buying new hybrids. It also is expanding the useful lives of some conventional diesel trucks by retrofitting them with hybrid electric drive trains.
 
These electric trucks make dollars as well as sense. They are particularly well suited for densely populated, moderate-climate urban areas, where FedEx says they cut direct operating costs by 60-80 percent per vehicle mile. As the capital costs of these electric vehicles come down — and their battery capacity and range go up — FedEx officials say they will convert more of its fleet to electric.
 
Mitch Jackson, Fed Ex’s vice president, environmental affairs and sustainability, said although electric trucks are still in their infancy, he thinks they have a bright future in the mix of alternative energy vehicles. Down the road, he said, he sees the possibility charging electric vehicle fleets with low- or zero-emission electricity generated on site by such innovations as solar electric power. It already has a solar-powered hub in Oakland, Calif.
 
“We have a goal of improving our overall fleet fuel mileage by 20 percent by 2020,” said
Deborah Willig, a FedEx spokeswoman. “New technologies and new initiatives are a major part of that.
 
UPS recently deployed 200 next-generation hybrid electric delivery trucks in eight U.S. cities. These hybrid electric vehicles (HEVs) join roughly 20,000 low-emission and alternative-fuel vehicles already in use. These trucks can yield a 35 percent savings in fuel costs, according to Bob Stoffel, UPS senior vice president of supply chain, strategy, engineering and sustainability.
 
He said these 200 new HEV delivery trucks are expected to reduce fuel consumption by roughly 176,000 gallons over the course of a year compared to an equivalent number of traditional diesel trucks.  The hybrids also should reduce by 1,786 metric tons the amount of CO2 gases released annually into the atmosphere. 
 
The UPS hybrid power system utilizes a conventional diesel engine combined with a battery pack, saving fuel and reducing pollution-causing emissions.  The small diesel is used to recharge the battery pack and to add power when necessary. They also use regenerative braking so that the energy generated from applying the brakes is captured and returned to the battery as electricity. That’s the same technology used in the popular Toyota Prius, which can get up to 50 miles per hour in city traffic. The combination of clean diesel power and electric power, supplemented by regenerative braking, allows dramatic improvements in fuel savings and emissions reductions.
 
America’s shippers already are going green. Led by Wal-Mart, the world’s largest retailer, shippers are asking transportation companies to join in the revolution. Wal-Mart wants to save $3.4 billion by forcing suppliers to reduce packaging materials by 5 percent, which will have a profound effect on transportation companies’ bottom line as truckers have traditionally charged by weight of shipments.

About the Author

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John D. Schulz
Contributing Editor

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. He is known to own the fattest Rolodex in the business, and is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis. This wise Washington owl has performed and produced at some of the highest levels of journalism in his 40-year career, mostly as a Washington newsman.


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