by Tashi Mitra
UPS, the global leader in express parcel delivery companies, is faced with the challenge of delivering millions of parcels all over the world, everyday, while trying to consume less energy. How does UPS meet this challenge?
UPS achieves this by focusing on:
- Alternative fuels and advanced technologies
- Fuel supply
- Fleet – both ground and air
UPS has created a Rolling Laboratory, which has implemented this program in nine countries, across 5088 vehicles and saved usage of 60 million gallons of conventional fuel since 2000. The Rolling Laboratory has traveled 505 million miles since 2000 and plans to travel 1 billion miles by 2017. Alternative fuels of CNG, Hybrid – Electric and hydraulic are used in suburban operating situations (range 100 miles average), Electric and ethanol are used in City Centers (range less than 60 miles), Propane is used for rural vehicles (range 100 + miles) and LNG/CNG/Biomethane used for long hauls (range 400 – 600 miles average).
The Rolling Laboratory has avoided 60 million gallons of conventional fuel. In the UPS 2014 Corporate Sustainability Report, “Committed to More”, UPS shares data about its progress which showcases the success of the Rolling Laboratory initiative. Whilst revenue grew 6.8% YOY, the GHG (Greenhouse Gases) emissions were held to 3.3% YOY increase.
To measure the energy efficiency of the network, key indices have been set up. The Transportation Intensity index represents 3 different carbon intensity metrics;
- a) CO2 per package for the express package business
- b) CO2 per ATM for global airlines
- c) CO2 per pound of freight for the supply chain.
Clearly, as trade, both global and local, increase in developed and developing countries, all logistics companies will need to “deliver more” using “less energy”. UPS is a great example of strategizing, planning, and executing a “delivering more using less” plan through the UPS Rolling Laboratory.
David Abney, CEO, UPS is leading the drive in UPS and exhorting other businesses to follow. Speaking at the Detroit Economic Club, he said, “we simply cannot continue on our current unsustainable path. But who will lead us on a different path? The job falls squarely on the shoulders of business” (09.29.15/US)
While UPS has made progress with Rolling Laboratory program, they need to roll it out across all countries where they operate to have any meaningful impact. Also, UPS needs to go beyond being satisfied with a lower growth rate in GHG than the business : they need to find a way to reduce absolute levels of GHG from the current levels, whilst continuing to grow the business.