As the worlds largest package delivery company with 91,700 gasoline-powered vehicles in the fleet UPS recognizes the importance of reducing its environmental footprint. We know that doing so makes sense from both a business and an environmental perspective. To this end, UPS invests heavily in automotive and other technologies that minimize fuel consumption and improve environmental performance throughout our business.

Rolling Laboratory Approach

75 years before the first hybrid taxi cab hit the streets in New York City, UPS was testing alternative fuel technology there, and it is still used in the companys fleet today.

Through strategic partnerships and a rolling laboratory approach, UPS is advancing automotive technologies by trying out new types of vehicles to see how they measure up. To date, UPS has invested more than $15 million in its AFV fleet, which includes fuel cell, liquefied natural gas, compressed natural gas, electric and propane-powered vehicles. The fleet is global with vehicles in France, Germany, Brazil, Canada, Mexico and the United States.

Examples of current tests and deployments include:

• UPS, the U.S. Environmental Protection Agency (EPA), Eaton Corp., International Truck & Engine and the US Army recently built the worlds first full series hydraulic hybrid urban delivery vehicle. In laboratory tests, this vehicle achieved as much as a 70% increase in fuel economy and a 40% reduction in CO2 over a traditional UPS vehicle. UPS will test the vehicle as part of its rolling laboratory in the Detroit area this fall to see how the vehicle performs in a real-world setting.
• UPS began testing hybrid electric vehicles in 1998. In 2001, UPS became the first package delivery company to introduce a hybrid electric vehicle (HEV) into daily operations. The company has purchased and soon will deploy 50 hybrid electric vehicles into its US fleet.
• UPS, DaimlerChrysler and the (EPA) partnered to introduce into commercial service the first medium duty hydrogen fuel cell powered vehicle in North America.

When it comes to conventional UPS delivery vehicles, our practice is to buy low-emission vehicles, as defined by the U.S. Environmental Protection Agency (EPA). The company operates more than 10,000 low-emission vehicles throughout North America. That number will continue to rise as older delivery vehicles reach the end of their life cycles and are replaced.

Ongoing Operations

To achieve maximum fuel efficiency, UPS has developed a number of innovative programs to help drivers and their vehicles operate at optimal levels. These efforts include:

Preventive Maintenance Inspections (PMIs): UPS keeps its delivery fleet in top condition through a redesigned inspection process that is saving the company 330,000 quarts of oil and $3 million annually. This process was built around the individual characteristics of our fleet, essentially giving each vehicle its own fingerprint. Through rigorous part testing, real-time duty cycle analysis and fleet-wide assessments, UPSs Automotive Study Group developed a detailed matrix of vehicle characteristics, including engine type, vehicle group, miles driven, days of service and manufacturers' recommendations for oil changes and other types of engine service. The PMI process ensures peak performance and results in better fuel economy and lower emissions. This initiative has been so effective that other companies and government agencies have consulted with UPS's automotive engineers and adopted some of our maintenance procedures.

Package Flow Technologies (PFT): As part of its leading-edge approach to maximizing fuel efficiency, UPS has implemented several tools and procedures, called Package Flow Technologies, to optimize delivery routes. PFT includes a suite of hardware and software designed, in part, to help drivers plan the most effective route before a package is even loaded into a delivery vehicle. The PFT software is expected to be fully implemented in 2007, but it is already shaving millions of miles off of UPS delivery routes.

For example, package flow technology is over 50% implemented in Washington, D.C., where, based on initial results, is expected to have the following impact when fully implemented:

·         Reduce driver routes in the D.C. area by over one million miles

·         Save approximately 112,000 gallons of fuel annually

·         Reduce emissions by 1,100 fewer metric tons of CO₂ annually

These results when multiplied across UPSs sizable vehicle fleet will have a significant impact on reducing fuel use and emissions.

Future Plans

Regardless of whether you own one car or 91,700 like UPS, reducing fuel consumption and emissions is important. Its a priority and challenge for UPS and the world.

Our long-term goal is to minimize dependence on fossil fuels by optimizing our business and advancing new automotive technologies. By partnering with others to test a range of technologies, we hope to develop diverse solutions that can be adapted for a large fleet or a family of four.

Robert Hall is fleet environmental manager for UPS, which operates approximately 1,500 alternative-fuel vehicles and over 10,000 low-emission vehicles.