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Maggie Kohn headshot

UPS Continues to Invest in Energy Efficient, Lower-Carbon Fleets

By Maggie Kohn

This time next year, when the brown UPS truck pulls up in front of your home to deliver your just-in-time hiking boots or wine-of-the-month-club shipment it may be powered by natural gas. The Atlanta-based global logistics company announced today a $450 million commitment to purchase more than 6,000 natural gas-powered trucks between 2020 and 2022.

The announcement is the latest effort in UPS’s ongoing strategy to be the industry leader in building a more sustainable fleet of delivery vehicles and to reduce the absolute greenhouse gas (GHG) emissions of its global ground operations by 12 percent by 2025. And by global, we’re talking global -- 123,000 vehicles in more than 220 countries that deliver packages to 10.6 million customers every day.

To reach its goal, the company pledges by next year that a quarter of all the ground vehicles it purchases will be alternative-fueled or advanced-technology vehicles – with today’s announcement getting it one big step closer. And, by 2025, it expects that 40 percent of all ground fuel it uses in its fleet will come from sources other than conventional fuels.

More deliveries powered by renewable natural gas

The new natural gas-powered vehicles will be equipped with compressed natural gas (CNG) fuel systems provided under an exclusive agreement with Agility Fuel Solutions, a business of Hexagon Composites. Since 2016, Agility Fuel Solutions has provided natural gas fuel storage and delivery systems to more than 1,700 UPS trucks.

As part of the new agreement, Agility will provide complete end-to-end natural gas systems for heavy-duty gas trucks, terminal tractors and medium-duty walk-in vans, which are UPS’s familiar brown delivery trucks. These will include on-board CNG fuel storage and management and Agility’s certified natural gas engine fuel systems.

Vehicles equipped with CNG fuel systems can interchangeably use renewable natural gas (RNG) and conventional natural gas. Produced from landfills, dairy farms and other bio sources, RNG yields up to a 90 percent reduction in lifecycle GHG emissions compared to conventional diesel. As of October 2019, UPS has agreed to purchase 230 million-gallon equivalents of RNG over the next seven years, making the company the largest consumer of RNG in the transportation industry.

“Building CNG truck capacity is vital to increasing our use of RNG and ultimately meeting our 2025 sustainability goals,” said Juan Perez, chief information and engineering officer at UPS, in today’s announcement.

Together with TruStar Energy, the company has designed, manufactured and installed five new CNG fueling stations in California, Texas and Ohio. By the end of 2019, UPS says it will be operating 61 natural gas fueling stations across the U.S., Canada, and the United Kingdom. 

 A decade of investment

Over the past decade, UPS has invested more than $1 billion in alternative fuel and advanced technology vehicles and fueling stations.

As previously reported in TriplePundit, the company is also investing in zero-emission hydrogen fuel cell delivery trucks, self-driving vehicles, e-bikes, liquefied natural gas vehicles and electric and electric hybrid vehicles. In Europe, the company is also testing smart-grid technology that it says can charge its entire fleet of electric vehicles simultaneously, something David Abney, UPS CEO and Chairman, calls “a groundbreaking move” in the company’s most recent sustainability report.

Through its "Rolling Laboratory," the company teams up with fuel suppliers and vehicle manufacturers, such as Tesla and Workhorse, to develop and test each new technology in real-world settings before scaling them up for wider adoption throughout its global fleet.

UPS is not alone  

Other logistics companies are also investing in more energy efficient and lower-carbon solutions.

German-based DHL has set an outwardly ambitious target to reduce all logistics-related emissions to zero by the year 2050. This includes an effort to reduce local air pollution emissions by operating 70 percent of its own first- and last-mile services with clean pick-up and delivery solutions, such as bicycles and electric vehicles. Its 2050 target comes on the heels of its 2020 target of improving carbon efficiency by 30 percent over its 2007 baseline, which it reached four years early in 2016.

Back in the United States, Memphis-based FedEx has set a goal to increase FedEx Express vehicle fuel efficiency by 50 percent from a 2005 baseline by 2025. It is currently at 39.6 percent. Like UPS, it is committed to increasing its use of fuel-efficient vehicles. In 2018, the company reported that it added 445 electric vehicles to its global fleet, resulting in more than 2,554 electric vehicles in service by the end of the year, including forklifts, airport ground service equipment and delivery trucks.

By the end of 2019, FedEx expects to add 1,000 Chanje V8100 electric vehicles to its fleet in California; it says it will also add Tesla Semi electric tractors – which boast a driving range of 500 miles -- once available. To prepare, the company is now upgrading infrastructure in its facilities to allow for multiple vehicle charging simultaneously.

As the pace of e-commerce and express delivery services continue to grow, such news couldn’t come at a better time.

Image credit: UPS

Maggie Kohn headshot

Maggie Kohn is excited to be a contributor to Triple Pundit to illustrate how business can achieve positive change in the world while supporting long-term growth. Maggie worked for more than 20 years at the biopharma giant Merck & Co., Inc., leading corporate responsibility and social business initiatives. She currently writes, speaks and consults on corporate responsibility and social impact when she is not busy fostering kittens for her local animal shelter. Click here to learn more.

Read more stories by Maggie Kohn