UPS plans to invest $100 million to build an additional 12 compressed natural gas (CNG) fueling stations and add 380 new CNG tractors to its growing alternative fuel and advanced technology fleet.
The CNG fueling stations and vehicle purchases are part of UPS’s commitment to diversify its fuel sources and reduce its environmental impact, according to the company.
Mike Casteel, director of fleet procurement at UPS, told Fleet Owner that this announcement is the extension of the work UPS has been doing to expand its natural gas fleet over the last couple years. According to UPS, the 12 new CNG fueling stations will mark a 67% increase – or a total of 30 – of CNG stations the company has in the U.S. In addition, the company has 6,840 alternative fuel and advanced technology vehicles deployed around the world.
“We feel natural gas is the only sustainability alternative we have for our Class 8 fleet right now, and we’re exploring it to the highest degree we can,” Casteel said. “We think that ultimately there will be a long-term cost advantage with natural gas.
Casteel explained that though diesel prices right now are low, diesel is inherently more volatile. UPS, he said, likes the “stability of natural gas” over the long-term.
“At UPS, we own our fleet and our infrastructure. That allows us to invest for the long-term, rather than planning around near-term fluctuations in fuel pricing,” said Mark Wallace, UPS senior vice president global engineering and sustainability. “CNG is part of a broad investment in a variety of alternative fuel vehicles. Taken together, all of our alternative fuel vehicles represent 6% of the more than 100,000 UPS global fleet, and have driven a 10% annual reduction in use of conventional fuel.”
UPS explained that it is working to meet its goal of logging one billion miles with its alternative fuel and advanced technology fleet by the end of 2017, using a Rolling Laboratory approach to determine the right alternative fuel solutions to meet the unique needs of route-specific driving environments.
The 12 new CNG stations will be built by TruStar Energy in Amarillo, TX; Chattanooga,TN; Columbia, SC; El Paso, TX; Fort Worth, TX; Kansas City, KS; Phoenix, AZ; Reno, NV; San Antonio, TX; Tifton,GA; Trinidad, CO; and Willow Grove, PA. The new CNG tractors to be deployed in these cities will be manufactured by Kenworth. Agility and Quantum Fuel Systems will provide the CNG storage systems. According to the company, this investment builds on the company’s existing 18 CNG fueling stations in Alabama, California, Colorado, Georgia, Kansas, Kentucky, Louisiana, Oklahoma, Pennsylvania, Texas, Virginia and West Virginia and operates CNG vehicles in Germany, the Netherlands and Thailand.
“UPS was one of the initial 13 leading companies to take the Obama Administration’s American Business Act on Climate Pledge, committing to reduce greenhouse gas emission intensity 20% by 2020,” the company said. “UPS operates one of the largest private alternative fuel and advanced technology fleets in the U.S. Its fleet includes more than 6,840 all-electric, hybrid electric, hydraulic hybrid, CNG, LNG, propane and light-weight fuel-saving composite body vehicles.”