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Q2 2015 Earnings

July 28, 2015
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Saving Fuel: Alternative Fuels Drive UPS to Innovative Solutions


UPS is engaged deeply in a global conversation about the future of fuels and energy, because managing fuels and energy is essential to our sustainable business success. UPS is aggressive in using alternative vehicles under real-world operating conditions. We currently operate one of the largest private alternative fuel fleets in the industry.


  • First (in package delivery industry) to introduce alternative fuel tractors into its fleet.  The first alternatively-fueled vehicle was an all-electric in New York City in 1934.
  • Operates more than 3,150 alternative fuel and advanced technology low-emissions vehicles, including all-electrics, electric hybrids, hydraulic hybrids, propane, compressed natural gas, liquefied natural gas and biomethane.
  • The criteria UPS has to adopt and deploy alternative fuel technologies: 1) it’s safe, 2) it must have a reliable fueling infrastructure, 3) the supply of vehicles and parts must be predictable, 4) there is a measurable improvement in emissions, fuel savings and/or environmental benefit and 5) it must be economically viable in terms of initial purchase price, maintenance costs and reliability and adapt to our fleet use characteristics.
  • UPS has a rolling laboratory for alternative fuels development. The rolling laboratory tests prototypes on the road. The company works with manufacturers, the EPA and other government agencies to pilot projects before new vehicles are ready for commercial deployment.
  • In 2013, UPS reached a new milestone of logging more than 55 million miles using alternative fuels and advanced technology vehicles. By 2017, we anticipate to log
    1 billion miles in our alternative fuel fleet.


Hybrid Electric Vehicles (in fleet since 1998)

UPS has researched and tested hybrid electric technology since 1998. In 2000, the company deployed a hybrid electric vehicle in its Huntsville, Ala. operations on a 31-mile route, making 150 pickups and deliveries each day. UPS deployed a second-generation HEV that operated in Kalamazoo, Mich., for several months during 2004.  In 2007, UPS deployed 50 third-generation hybrid electric vehicles in Atlanta, Dallas, Houston and Phoenix. In 2010, UPS deployed 200 HEVs to Austin, Houston, Long Island, Minneapolis, Louisville, Washington DC, Philadelphia and Chicago. In 2011, UPS deployed another 129 HEVs to cities in California, New York, New Jersey and one in Hong Kong.

These vehicles promise a 35 percent improvement in fuel economy over the vehicles they are replacing. The 380 vehicles are expected to collectively reduce fuel consumption by hundreds of thousands of gallons annually and reduce CO2 by thousands of metric tons annually.

Liquefied Natural Gas (in fleet since 2000)

UPS was the first in industry to purchase LNG. The latest investment in LNG vehicles and fueling infrastructure recognizes the viability of LNG as a “bridge” fuel toward energy independence. UPS will purchase 700 new LNG tractors by the end of 2014 and plans to operate the vehicles across 10 states.  The company currently has 16,000 tractors in its small package and freight fleet.

Once completed, the LNG network will be one of the most extensive private LNG fleets in the U.S. Currently, UPS is operating from LNG fueling stations in Las Vegas, Nev.; Phoenix, Ariz., and Salt Lake City, Utah, with a fueling station on UPS property in Ontario, California.  Throughout 2014, UPS is building 4 new fueling stations in Knoxville, Nashville and Memphis, Tenn., and Dallas, Texas (initial investment of more than $18 million).

Compressed Natural Gas (in fleet since 1989)

UPS has one of the largest private fleets of CNG vehicles in the U.S., with more than 965 package delivery vehicles. UPS began extensively using CNG in 1989 to assess its benefits and viability as an alternative fuel. In January 2010, UPS deployed an additional 245 CNG vehicles in the United States.

UPS operates CNG vehicles in the United States, Germany, Chile, Thailand, the Netherlands and Brazil.

Electric Vehicles (first test in the 1930s; in fleet since 2001)

UPS's first foray into alternative fuel vehicles was with a fleet of electric vehicles that operated in New York in the 1930's. The company also operated an electric car in Santiago, Chile, in 2001. Additionally, UPS tested 13 zero emission electric minivans in downtown Los Angeles, Calif. These vehicles had a range of 80 to 90 miles and were primarily used to make Next Day Air deliveries and pickups. In 2004 and 2005, UPS introduced two electric vehicles into its fleet. These zero emission vehicles currently operate in Manhattan, NY. 

In 2013, UPS announced the deployment of 100 fully electric commercial vehicles to achieve widespread deployment of zero emission vehicles throughout California. These UPS electric trucks will reduce the consumption of conventional motor fuel by approximately 126,000 gallons per year. Additional benefits include reduction of carbon emissions and noise. The vehicles have a range of up to 75 miles and primarily will deliver packages to customers in Sacramento, San Bernardino, Ceres, Fresno and Bakersfield, Calif.

Additionally, there are 56 electric vehicles operating in Europe.

Propane-Powered Engines (in fleet since 1980) 

UPS operates more than 900 propane-powered delivery vehicles in Canada. Throughout 2014, UPS will add 1,000 propane fuel vehicles in the U.S.  Propane's low pollution characteristics and positive performance have made it a viable choice for inclusion in UPS's alternative fuel fleet.


In 2011, UPS deployed 45 ethanol-powered delivery vehicles in Brazil, where production of this alternative fuel is plentiful. UPS currently has 50 ethanol-powered vehicles in Brazil.

Hydraulic Hybrid

In 2006, the U.S. Environmental Protection Agency (EPA) announced the world's first Full Hydraulic Hybrid Urban Delivery Vehicle. The EPA, UPS, Eaton, International Truck and Engine, and the U.S. Army National Automotive Center partnered to build this unique UPS truck with a full-series hydraulic hybrid drive train that has been patented by the EPA.

In 2012, UPS announced the deployment of 40 new hydraulic hybrid vehicles (HHVs) - 20 in Baltimore and 20 in Atlanta. These vehicles can achieve up to 35 percent improved fuel economy and up to 30 percent CO2 emissions reduction over traditional diesel-powered vehicles that use automatic transmissions in stop-and-go applications.

The HHVs operate on two power sources - a fuel-efficient diesel combustion engine and advanced series hydraulic hybrid. Energy created by the vehicle's continued braking action is stored in the HHV's hydraulic high-pressure accumulator, similar to what is done with electric motors and batteries in a hybrid electric vehicle. The HHV has a function to turn off the engine and drive the vehicle using the stored energy to propel the vehicle. This engine-off strategy can reduce up to 90 minutes of engine run time on a typical route. Because the HHVs efficiency relies on constant braking, the vehicles are best suited for urban routes, which typically involve frequent stopping and starting.

Biomethane Diesel

In 2012, UPS announced the addition of 10 dual-fuel biomethane-diesel vehicles to its dedicated London fleet. Biomethane is a renewable energy source produced from organic waste, and it provides a number of environmental benefits by reducing the need for fossil fuels. It can be obtained via landfills or by using an anaerobic digester to break down organic waste.

UPS's biomethane dual-fuel vehicles will expand the company's alternative fuel vehicle fleet delivering to official London 2012 Olympic venues and will remain in the UK years after the Games conclude, leaving an important legacy for the UK. The London biomethane vehicles are the first of their kind in UPS's global fleet.

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