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UPS to Test Fuel Cell Vehicles in U.S. Delivery Fleet

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Collaboration with EPA and DaimlerChrysler A First

ANN ARBOR, Mich., May 19, 2003 - Representatives of the U.S. Environmental Protection Agency (EPA), DaimlerChrysler and UPS (NYSE:UPS), gathered here at the government’s premier fuel emissions laboratory, today announced a collaborative project in which UPS will operate package delivery vehicles powered by hydrogen fuel cells.

The deployment of the zero-emission vehicles, in two different sizes, will begin late this year and continue in 2004 and will be the first use of fuel cell technology in a commercial delivery fleet in North America. It was announced at a news conference at the National Vehicle and Fuel Emissions Laboratory by EPA Administrator Christie Whitman and corporate executives along with Gov. Jennifer Granholm, Sen. Carl Levin and Rep. John Dingell.

“It’s time to deploy this technology in a commercial fleet and learn exactly what’s needed to make it broadly available,” said Tom Weidemeyer, chief operating officer of UPS and president of UPS Airlines. “These vehicles are going to be rolling laboratories. Environmental improvements like this and the needs of business are not incompatible.”

DaimlerChrysler will supply the fuel cell vehicles for UPS, while the EPA will supply a hydrogen refueling station at its Ann Arbor facility. The fueling station will be operational by the end of 2003 and will provide compressed hydrogen fuel to the UPS vehicles as well as other fuel-cell cars in the area.

The first fuel cell vehicle to be tested by UPS will be a DaimlerChrysler “F-Cell,” which will be used for early-morning deliveries by late 2003. In 2004, UPS will add one or more fuel cell-powered Sprinter delivery vans to its fleet. There are currently 2,500 Sprinter vehicles in UPS’s domestic and international fleets. Sprinters normally are powered by a highly fuel-efficient diesel engine and are certified as ultra low emission vehicles under EPA guidelines.

Fuel cells convert chemical energy - in this case, hydrogen’s reaction with oxygen - into electricity without combustion. The reaction of hydrogen and oxygen produce water vapor and heat as its only by-products, or emissions. The lack of any exhaust emissions makes fuel cell technology the ultimate alternative fuel.

The fuel cell vehicles will join an already large number of alternative fuel vehicles in UPS’s fleet. UPS operates 1,024 compressed natural gas vehicles in the United States, the largest private fleet in the nation. In addition, the company operates more than 800 propane-powered vehicles in Canada and Mexico City; liquefied natural gas tractors in its West Coast fleet and an assortment of all-electric vehicles in its operating facilities. UPS began testing hybrid electric technology in 1998 and made history in 2001 by introducing the industry’s first hybrid electric vehicle into its operations.

Fuel cell technology is the latest innovation in UPS’s commitment to develop sustainable transport options. The company is working to develop future generations of delivery vehicles that reduce dependence on fossil fuels, significantly reduce fuel consumption and create a vehicle platform to bridge to the hydrogen economy. Some of these efforts include:

• 21st Century Truck Partnership - In this government-industry partnership, federal agencies and the transportation/trucking industry are working together on technologies to make vehicles safer, cleaner and more efficient, while maintaining fleet safety and cost-effectiveness.
• EPA SmartWay Transport Program - This voluntary partnership with leading members of America's truck and rail transport sectors aims to reduce pollution and greenhouse gas emissions from ground freight carriers. The goal of this initiative by 2012 is to reduce as much as 18 million metric tons of carbon equivalent, and up to 200,000 tons of nitrogen oxides (NOx) annually. These reductions will create fuel savings of up to 150 million barrels of oil annually.
• Clean Cargo & Green Freight - UPS is an active member of Business for Social Responsibility’s Green Freight working group. Together with the Clean Cargo group, Green Freight is developing voluntary environmental guidelines to enhance fleets’ performances while spurring a broader movement toward a sustainable transportation future.

UPS is the world’s largest package delivery and supply chain services company, offering the most extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS), and the company can be found on the Web at UPS.com.

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• Heather Robinson
  UPS
  404-828-6384
  
• Jackie Leonard-Tackett
  Fleishman-Hillard
  314-982-0283