UPS Boosts Nat-Gas Fleet With 285 More Class 8s
This story appears in the July 1 print edition of Transport Topics.
WASHINGTON — All of the tractors that UPS Inc. buys next year for its U.S. parcel division will be powered by natural-gas engines, as the company announced plans last week to purchase 285 more vehicles on top of the 700 ordered in April.
Chief Operating Officer David Abney said at the Alternative Clean Transportation Expo here that UPS’ interest in liquefied and compressed natural gas is so strong that the company will soon have more than 1,000 LNG trucks to complement its fleet of 1,015 CNG vehicles.
Abney’s announcement was part of a general discussion of the company’s commitment to alternative fuels.
“Who would have thought that [UPS] would have the larger natural-gas fleet in Memphis, Tenn. So much for home-court advantage,” Abney said, prodding FedEx Corp., UPS’ primary rival, which is based there.
Abney said that, since 2000, the Atlanta-based carrier has traveled more than 300 million miles on alternative fuels, and it expects to hit 500 million in 2015.
To do so, the company has deployed more than 2,700 vehicles using an array of technology that includes propane, electric and hydraulic hybrids, compressed natural gas, electric plug-ins and other methods.
The LNG expansion is particularly explosive now, as the company started the year with 112 such trucks and has publicly announced orders for almost 1,000 more since the start of the year.
Abney said UPS also operates 1,015 CNG vehicles.
The two major suppliers for UPS, so far, are Kenworth Trucks, which puts Westport Innovations 15-liter engines in T800 day cabs, and Mack Trucks, which puts Cummins Westport ISX12 G engines in Pinnacle highway tractors. Both use LNG, although UPS does put CNG into many of its Class 6 package cars.
Despite the company’s substantial investment in natural gas, Abney said he does not necessarily see CNG and LNG as having an extremely extended life span.
“We see natural gas as an important ‘bridge fuel’ over the next decade. It lets us reduce our emissions and move away from oil-based fuel while we continue to push emerging solutions that are still some years away,” he said.
Volvo Trucks engineer Ed Saxman agreed and touted dimethyl ether as a superior fuel of the future. In recent years, Volvo has campaigned strongly for DME, which can be synthesized from natural gas, and said it will put it into U.S. trucks within two years. Mack has made a similar announcement.
Abney said UPS is not investigating alternative fuels in order to make money quickly, “but we’re also not ignoring the costs.” UPS financial managers have had to push out return-on-investment goals, Abney said, “but the ROIs are getting better; we’re making progress.”
Abney also said information technology plays a critical role in burning less fuel.
“The greenest miles,” he said, “are those never run.” UPS formulates its own route-optimization software and has improved communications with customers to allow it to drive fewer miles.
From 2001 to 2012, Abney said, the effort has allowed the company to avoid driving 364 million miles and still deliver all of the packages entrusted to it.
He also offered some policy recommendations, including equalizing the tax rates for LNG and diesel. Abney said the two fuels should be taxed according to energy content, not volume, because diesel packs in more British thermal units per gallon than LNG does.
Abney also recommended an exclusion to the 12% federal excise tax on trucks, saying that the government should not collect money on the extra amount that LNG trucks cost beyond a diesel-powered vehicle.
In related news, Procter & Gamble Co. said that, starting in July, it is working with eight truckload carriers to convert 20% of its North American shipments to trucks using nat-gas engines. The Cincinnati-based manufacturer of consumer products wants to complete the transition within two years.
Owens Corning, Toledo, Ohio, has expressed interest in a similar practice.
Trillium CNG, Chicago, said June 26 that it will build 101 public-access, fast-fill CNG stations aimed at heavy-duty trucks as customers. The stations would be scattered throughout 29 states and should open by sometime in 2016.
