UPS Says Natural Gas ’Game Changer’ for Cutting Emissions

United Parcel Service Inc. (UPS), the world’s largest package-delivery company, said it can save 40 percent in fuel costs by running its long-haul semi-tractor trailer fleet on natural gas instead of gasoline or diesel.

UPS is reducing gasoline and diesel use to cut emissions and operate more efficiently, Scott Wicker, the Atlanta-based company’s chief sustainability officer, said in an interview today. The company wants to reach 1 billion miles (1.62 billion kilometers) driven by alternative or advanced-technology vehicles by 2017, up from a previous target of around 400 million, it said today in its sustainability report.

“It’s really the vehicles that are on the freeways that burn the most fuel,” Wicker said. “Right now natural gas is the big game changer.”

Earlier this year, UPS said it would buy almost 1,000 liquefied natural gas, or LNG, tractors in the next two years to boost its fleet of 2,700 alternative fuel and advanced-technology vehicles. It’s adding LNG refueling infrastructure with partners in the U.S. Southwest and buying electric trucks, which work best in densely populated areas, Wicker said.

UPS has been cutting costs in recent quarters by trimming flying, retiring older vehicles and rolling out a system to adjust drivers’ routes in real-time. The company reported a 4 percent slip in second-quarter net revenue on July 23.

The efforts to make the company more sustainable help UPS’s bottom line, saving about $50 million for each mile saved a year, Wicker said. “We only do them when we have a return on investment that’s acceptable to us,” Wicker said.

UPS has a fleet of more than 96,000 vehicles, including more than 2,600 that run on alternative fuel, according to its website.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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