Shipping giant UPS is making a substantial bet that the end of the road is in sight for gasoline and diesel fuels.
The company, which operates 114,000 vehicles, said Tuesday that it has launched a massive transition whereby 40 percent of the ground fuel it uses will come from sources other than conventional gasoline and diesel by 2025. That would double its current alternative fuel use.
UPS believes its transition from conventional internal combustion fuels and technology will spur others in the trucking and shipping business to do the same.
“Because of our size and scale, we know our commitments can shape markets, advance technologies and be a catalyst for infrastructure investments,” said David Abney, the chief executive of UPS.
Slashing its conventional fuel use is an ambitious goal, but feasible, said John Boesel, chief executive of Calstart, a clean transportation industry group.
“It is a statement about UPS’ commitment to being a good global corporate citizen and its desire to reduce its dependence on a highly unstable global commodity,” Boesel said.
“We are in a state of rapid technological change, and we fully expect to see many other fleets move in this direction as electricity, hydrogen and advanced biofuels become more cost competitive and reliable,” he said.
The move is part of a large sustainability push by the Atlanta-based company.
UPS also wants 25 percent of the electricity the company consumes to be derived from renewable energy sources by 2025. The amount it uses now is barely measurable – just 0.2 percent as of last year, Abney said.
The shift in transport fuels and to renewable energy will push UPS toward its goal of cutting greenhouse gas emissions from its global ground operations by 12 percent from current levels, the company said. That excludes air transport.
Already, UPS operates more than 8,300 alternative fuel and advanced technology vehicles worldwide. That includes electric, hybrid electric, hydraulic hybrid, compressed natural gas liquefied natural gas, propane and lightweight composite body vehicles.
UPS has several high-profile advanced trucking technology projects in progress.
It introduced the world’s first hydrogen-electric Class 6 delivery truck earlier this year at the 2017 Advanced Clean Transportation Expo in Long Beach, Calif., in May. The van – developed as part of a $10-million federal Department of Energy program – is the first of 17 hydrogen fuel cell vans the parcel delivery giant will deploy in the U.S. by the end of 2018.
The initial van was unveiled as a chassis and powertrain without the familiar brown UPS truck body covering it all up. The completed version will enter service later this year running parcels among state government offices in California’s capital city of Sacramento.
UPS also is looking to add range to its burgeoning fleet of hybrid-electric delivery trucks.
It has worked with truck vendor Workhorse Group to use a new drive system that will allow its vehicles to go farther before charging and refueling by swapping out a four-cylinder engine for a smaller two-cylinder motor. The new engine will act as generator extending the range of the vehicle and improving fuel efficiency.
Any substantial shift in transportation fuel use would likely start at a company such as UPS that operates tens of thousands of medium-duty delivery trucks on conventional routes, said Dan Murray, vice president of the American Transportation Research Institute.
“Those trucks get home every night so the concept of recharging or refueling them is a no-brainer and something a company like UPS or FedEx could build out,” Murray said.
But he suspects the line-haul, or over-the-road semi-tractor trailer combinations, that UPS also operates would be the last targeted for alternative fuel or technology applications. While UPS can build fueling and charging infrastructure into its local operations, there isn’t a national network that could support such vehicles traveling thousands of highway miles.
That’s why UPS endeavor is unlikely to produce “a critical mass” that would move the long-haul trucking industry along the same path.
Still, “it could create some economies of scale that drive prices down for alternative fuel vehicles,” Murray said.
But even so, efforts to wean trucking from fossil fuels face still headwinds in the face of plentiful and inexpensive diesel, he said.
“Gasoline and diesel fuel is dirt cheap and that isn’t go it to change anytime soon because once oil prices start to go up the U.S. just starts producing more, the supply increases and prices go back down,” Murray said.
That dynamic makes it less economic for companies, especially medium and small fleets and independent truckers, to transition to alternate fuels and technology, he said.