Efficiency and sustainability are at the core of UPS operations. As a global logistics company, we know we have a responsibility to reduce the environmental impacts of our operations. That’s why we set an ambitious goal to reduce absolute Greenhouse Gas emissions 12 percent across our global ground operations by 2025. Renewable energy is critical to reaching this goal, so we established three targets to accelerate the use of renewable energy across our fleet and facilities:
- Source 25% of total electricity needs from renewable sources by 2025;
- Source 40% of ground fuel from low carbon or alternative fuels by 2025; and
- Expand our rolling laboratory – 25% of annual vehicle purchases by 2020 will be alternative fuel and advanced technology vehicles
The efforts detailed below demonstrate our progress toward these goals.
To see more information about our performance, explore the Goals & Progress section of our 2018 Corporate Sustainability Progress Report.
Our optimized global logistics network meets customer needs with a single, integrated pickup and delivery system. Through the network’s use of innovative technologies and our intermodal shifting strategy, we are able to reduce inefficiencies and their associated environmental impacts, such as greenhouse gas emissions. Through improvements to this optimized network, we are making the smart logistics network a reality.
Making the Smart Logistics Network a Reality
UPS’s Smart Logistics Network
Advanced technologies — some deployed today and others on the near horizon — are critical to turning this challenge into an opportunity to take our global network to new levels of sustained efficiency.
Network Planning Tools
Our Network Planning Tool (NPT) applies advanced analytics, artificial intelligence, and operations research to refine the network, improve utilization of assets, and provide new levels of efficiency. This technology helps us optimize the package flow, from customers’ loading docks, through our network of hubs and sorts, and to their final destinations. Package flow optimization and hub optimization are rolled into one tool that tells us the most efficient way to run our network each day, even when volumes spike and destinations change. NPT will be fully implemented in U.S. operations by 2020.
An important part of reducing our footprint is optimizing delivery routes, as the most sustainable mile is the one we never drive. On-Road Integrated Optimization and Navigation (ORION), our groundbreaking route-optimization software, provides a smarter way to determine the best route for a single delivery vehicle. ORION uses package-level detail, customized online map data, fleet telematics, and advanced algorithms to determine the most efficient delivery route each day. We have learned that successful implementation requires a combination of ORION technology and our drivers using their best judgment and knowledge of optimal route solutions.
As these technology-driven investments are fully deployed, they will help us achieve our goal of reducing absolute GHG emissions across our global ground operations by 12 percent by 2025.
When our customers choose a delivery time, we choose the most efficient transportation modes to meet that commitment. That may mean using a truck instead of a plane, or a train instead of a truck. Since these various modes of transportation in our sector have different energy intensities (energy required per unit of volume transported), UPS uses an intermodal shifting strategy. It allows us to fluidly shift transport modes in real time to reduce energy intensity whenever possible – just by choosing UPS, our customers are getting the delivery made in the most efficient way for the environment, guaranteed.
Fuels & Fleets
UPS Rolling Lab – Sustainability on the Road
Every day, UPS is faced with a complex challenge: How do we deliver more while using less?
Our journey toward a less carbon-intensive future is enabled through one of the industry’s largest private alternative fuel and advanced technology fleets, a “rolling laboratory” of more than 10,000 vehicles that drive more than 1 million cleaner miles each business day.
Through the rolling lab, we collaborate with fuel suppliers and vehicle manufacturers to develop and test alternative fuels and technologies in real-world operating scenarios. The rolling lab is comprised of electric, electric hybrids, e-bikes, hydrogen fuel cell, hydraulic hybrid, propane, compressed natural gas (CNG), and liquefied natural gas (LNG) vehicles. Some of our CNG and LNG vehicles are powered by biomethane, a fuel harnessed from waste.
Trash to Gas – How UPS Utilizes Biomethane
Fuels are a critical part of keeping our promise to customers, so UPS must always ensure the accessibility and integrity of our fuel supplies. We practice diligent, responsible fuel sourcing as part of our approach to energy use and emission reduction. Our sourcing practices also help combat the ever-changing conditions in a volatile energy market where costs will rise or fall based on weather, economic growth and demographic factors. One promising fuel we are proud to invest in is renewable natural gas.
Renewable natural gas (RNG), also known as biomethane, can be derived from many abundant and sustainable sources, including decomposing organic waste in landfills, wastewater treatment, and agriculture. RNG has the twofold benefit of being a cleaner operating fuel that also keep methane from entering the atmosphere, where it is 28 times as damaging to the ozone layer as CO2.
In 2019, we announced the largest renewable natural gas purchase agreement in U.S. history with a partnership with Clean Energy Fuels Corp. for 170 million gallon equivalents through 2026. With collaborations like these and other alternative fuel sourcing agreements, we’re not only improving our own fleet operations — we’re helping move our industry forward.
Electrification Gains Momentum
Over the next decade and beyond, the logistics industry is poised to take a significant leap forward through the electrification of transportation. With more than 1,000 electric or hybrid electric vehicles already in operation in cities around the world, UPS expects to continue to lead the charge on electrification of medium-duty vehicles over the next five years including investments with Tesla, Workhorse, and other vehicle manufacturers.
As we invest more in electric vehicles, we are furthering our understanding of their use and requirements. For instance, electric vehicles are a key part of our development plan for urban deliveries, where their quiet, zero-emissions operation can help overcome the burden of air and noise pollution in cities. We have also learned more about the challenges – including higher initial purchase investment and the obstacle of providing sufficient charging for infrastructure for a fleet of vehicles.
Learn more about our findings on electric vehicles from our own use and our partnership with GreenBiz by exploring the Lessons From the Road to Fleet Electrification in our 2018 UPS Corporate Sustainability Report or see the full white paper.
Sustainability Takes Flight
UPS Airlines is a critical component of our logistics network, helping us to quickly connect our customers around the world. While our air fleet is also a large portion of our global environmental footprint, we are focused on fuel use efficiencies to reduce absolute GHG emissions.
We have one of the youngest fleets in the industry with fuel-efficient aircraft and our existing older models have been retrofitted to make them more efficient, all to have a lower carbon footprint. We continue to make significant capital investments in new, more fuel-efficient aircraft. Over the next five years, we will address growing U.S. and international demand by taking delivery of 14 Boeing 747-8 freighter jets between 2017 and 2020 and exercising an option for an additional 14 between 2019 and 2022. The new wing and engine design on the 747-8 reduces fuel consumption and carbon emissions by 16 percent over the 747-400F. The aircraft also operates 52 percent below the International Civil Aviation Organization’s nitrous oxide limits and is 30 percent quieter than other jumbo cargo jets. Adding these freighters will progressively increase our ability to optimize our air network, opening up more capacity as we reassign equipment to operations across the world.
UPS lowers flight speeds, reduces weight where possible, optimizes flight paths, washes aircraft engines regularly and uses technology to increase precision of aircraft departures, arrivals and taxi times. Learn more about our efforts in the 2018 UPS Sustainability Report.
Beyond our transportation network, we also the operate more than 2,500 UPS facilities around the world. We have committed to source 25% of all facility electricity from renewable sources by 2025.
As we work to build the smart logistics network of the future, this commitment will become even more important. We have more than 70 new or retro-fitted package centers and hub projects underway with highly efficient automation, which will increase our capacity and use technology to advance the connectedness of our network. While such capabilities increase the efficiency of our network, they also are likely to increase energy usage.
Our 2018 Facility Investments: Americas & Europe Regions
We are in the process of deploying rooftop solar arrays on our facilities, including plans to complete a 10MW installation by the end of 2019. We anticipate continued investment in on-site solar and purchasing renewable energy to help us reach our goal.
UPS is committed to evaluating all new construction projects for green-building rating system implementation. The Building Research Establishment Environmental Assessment Methodology (BREEAM), and the Leadership in Energy and Environmental Design (LEED) are the two rating systems most widely in use today across the globe.