How UPS Plans to Deliver a Low-Carbon Future

Everyone is familiar with the sound of the UPS delivery truck, the rattle of its engine as it comes around a corner and, of course, the squeal of the brakes as it pulls up in front of your house. But that sound might become a thing of the past—and quite possibly sooner than you think.

As Michael Holder of BusinessGreen recently reported, the logistics giant is considering major changes in its equipment strategy going forward—including, in the words of UPS European director for sustainability Peter Harris, "How do we go beyond the diesel truck?"

As more and more of the world's economy is moving online, commercial heavy lifting has literally fallen onto the shoulders of delivery companies. Therefore, it’s up to them to find ways to facilitate this surge in deliveries more sustainably and affordably, for both their own and the planet's survival.

UPS, which currently operates 110,000 vehicles, is aiming to devote a quarter of its ground vehicle purchases to alternative-fuel or advanced-technology vehicles by 2020. The company is also looking to source 40 percent of the fuel for its ground fleet from alternative sources by 2025. That could have quite an impact on the direction of the market, which still seems to be up for grabs between various low-carbon options.

The logistics giant has been experimenting with and evaluating these technologies for some time now, but as it approaches the point of truly massive investment, the company has to be reassured that all of these pieces are going to work together.

Harris laid out a three-pronged strategy, corresponding to the long-haul, local distribution and last-mile portions of the business.

The big trucks that run the long-haul route are called heavy goods vehicles, or HGVs, in Europe. Harris says that UPS is looking, at least for the near-term, at liquefied natural gas as its fuel of choice, and the company is working with its United Kingdom supplier Gasrec to ensure that the fuel supplied is from renewable sources. While UPS will also be evaluating electric tractor-trailers and has reserved over 100 Tesla semis, the company considers those vehicles more of a longer-term play. This is a little surprising considering the number of manufacturers going electric, including BYD, Wrightspeed and Nicola. Also surprising was the non-mention of autonomous trucks in this segment.

At the regional distribution level, UPS will be working with Tevva Motors to deploy a number of range-extended (i.e. hybrid) trucks. Each of these carries a small diesel engine onboard, as Tevva explains across its website, "to always get back to base." Both hybrid trucks and the natural gas HGVs will allow the company to defer the logistical challenges of utilizing vehicles with more limited ranges, which will likely be a factor once fully electric and truly carbon-free vehicles are deployed.

Last, and perhaps most surprising, for the "last mile" routes, UPS will rely heavily on bicycles pulling trailers (as shown in the photo above). The company views this option as very attractive in dense urban areas and has had successful pilots in Munich, Hamburg and Dublin. The use of the much smaller trailers will, of course, require significant planning and could call for the conversion of obsolete downtown parking areas into "consolidation logistics hubs."

This is just one example of the kinds of challenges involved in planning for the future when the reality is that companies and their stakeholders don't really know what that future will look like.

One final point worth noting is that while this report focused on UPS’s European strategy, we’ll most likely see continued transformation within the company’s fleets across the U.S., too.

Image credit: UPS