Enchanted Ad Outpaces FedEx’s Adoption of Eco-Friendly Vehicles

Photographer: FedEx Corporation via Coloribus

FedEx's ad campaign for the Facebook app from 2012 that encouraged users to plant virtual trees. Close

FedEx's ad campaign for the Facebook app from 2012 that encouraged users to plant virtual trees.

Photographer: FedEx Corporation via Coloribus

FedEx's ad campaign for the Facebook app from 2012 that encouraged users to plant virtual trees.

Day breaks above a rolling, moss-covered forest. Adorable, red-capped mushrooms and furry critters stretch out in the young day's sun, as round notes from a cello -- then a flutter of woodwinds -- rise to a flute-driven crescendo.

A sentient tree lowers a branch down to this computer-animated paradise to cradle and raise aloft… a FedEx delivery truck.

The shipping giant’s “Enchanted Forest” ad came out at the end of 2011, a playful episode about its aspirational seamlessness with nature. How close are those cartoon images to the real world? Judging by the actual adoption of alternative fuel transportation, less than idyllic.

FedEx drew widespread praise a decade ago when it unveiled a hybrid electric delivery truck and said it could replace its 30,000 diesel-burning vehicles in 10 years. In its most recent annual report, the delivery giant said its fleet includes 360 hybrid-electric and 165 full-electric trucks, or less than 1 percent of the now-54,100 ground vehicles in its FedEx Express division.

Other major fleet operators, from UPS to Verizon, have slowed their hybrid-vehicle deployments as well. Total sales of medium- and heavy-duty trucks in North America powered by hybrid, plug-in hybrid and battery electric technologies are projected to grow modestly from 1,800 vehicles in 2013 to nearly 13,000 in 2020, according to a report due out next month from Navigant Research.

This bodes poorly for efforts to reverse the fast-growing greenhouse gas emissions from the U.S. trucking sector.

Medium- and heavy-duty trucks spewed out 401.1 million metric tons of heat-trapping gases in 2011, a 74 percent jump since 1990, according to the EPA. That accounts for 6 percent of all U.S. emissions, up from 3.7 percent in 1990.

Major fleet operators have been slow to purchase hybrids because the vehicles are more expensive, often 60 percent to 70 percent pricier than a conventional truck, says Gerard DeVito, director of global product management at Eaton Corp., which builds an electric hybrid power system for trucks.

Although the vehicles save money by burning less fuel -- typically, they are 14 percent to 37 percent more fuel efficient -- it can take six or more years to recoup that added cost through fuel savings, says DeVito. Fleet operators typically will only invest in new technologies that have a payback period of two years or less.

Making more headway on sustainability goals will require companies to spend money that takes a longer time to recoup, says Valerie Davis, president of Austin, Texas-based Green Canary Sustainability Consulting, which works with firms on their green strategies.

"If companies want to be leaders in sustainability, they will have to make some sacrifices," she says. "If it didn't cost something, the whole world would already be doing it."

UPS and others have vigorously pursued publicly funded government programs to cover a large portion of the vehicles' extra costs. For instance, in California, the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), has allocated more than $47.6 million for more than 1,600 vouchers, averaging $28,000 apiece.

Almost half of the program's vouchers have gone to the four biggest recipients: Coca-Cola, PepsiCo, UPS and FedEx, with overall incentives worth an estimated $4 million to $7 million for each company, according to data supplied by CALSTART, which implements the voucher program.

Although the companies have been slow to deploy hybrids, some are experimenting with other types of vehicles. UPS, for instance, plans to add 935 big rigs that run on liquefied natural gas through 2014. This includes building 13 natural-gas fueling stations at a cost of more than $4 million apiece, says Wicker.

"Our fleet is a rolling laboratory," says Scott Wicker, chief sustainability officer for UPS. He concedes that most of the 3,000 to 6,000 new vehicles that UPS purchases each year are still conventional trucks. "There is no silver bullet out there right now."

FedEx, which declined to comment for this article, has focused on non-hybrid solutions. In June, it announced the purchase of 1,900 lighter-weight diesel-powered vans that are 35 percent more fuel efficient than its standard delivery trucks. The company also deploys its engineers to analyze vehicle capabilities, such as torque and payload, and match them to routes that would maximize fuel savings.

These steps have made the FedEx Express delivery fleet 22 percent more fuel efficient than it was in 2005, the company says, and helped its emissions grow slower than its overall business: Its revenues climbed 23 percent from 2010 to 2012, while its direct emissions of carbon dioxide rose 6 percent, to 14 million metric tons during that time.

That's progress, but it falls short of the image FedEx has attempted to cultivate with its “Enchanted Forest” campaign: "The inspiring story of how a shipping giant can befriend a forest," says the storybook narrator, who goes on to explain that FedEx is adding more electric trucks, recycled materials and lower-emissions planes, "makes for a pretty enchanted tale."

Visit www.bloomberg.com/sustainability for the latest from Bloomberg News about energy, natural resources and global business.

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