UPS Will Boost its Hybrid Delivery Fleet to 380 Trucks

UPS has announced that it will purchase an additional 130 hybrid delivery trucks for use in the United States, bringing the total number of hybrids it will soon have in circulation to 380. In June, the company unleashed 200 new hybrid trucks on delivery routes throughout the country, and has so far been very pleased with their performance.

UPS’s hybrid fleet will bring a 35 percent boost in fuel economy over their conventional delivery trucks, saving the company 66,085 gallons of fuel annually. Unfortunately, the trucks also come at a 40 percent price premium—making full implementation a fiscal impossibility at this point. For now, UPS is relying on state subsidy programs like California’s Hybrid Truck and Bus Voucher Incentive Project, which will help to offset $20,000 from the extra cost of the vehicles.

By investing $25 million dollars of its own money to build an alternative fuels fleet of more than 2,000 vehicles worldwide, UPS has transcended the stereotype of the corporate greenwasher that calls press conferences to trumpet a small rooftop solar installation, but has no comprehensive strategy to cut its energy use. UPS has pledged to make its entire fleet at least 20 percent more fuel efficient by 2020—a goal that will require a significant financial investment and massive planning.

But for international shipping companies like UPS and FedEx—which has also been extremely active on the alternative fuels front—cutting oil use is about more than being an environmentally conscious corporate citizen. Most energy analysts predict a dramatic increase in oil prices in the coming decades, and for UPS, that represents a threat not only to the bottom line but to the basic viability of their business model. As alternative fuels solutions become more affordable in the coming years, companies like UPS will gradually find ways to integrate them into their fleets, better preparing them for the uncertain times that lie ahead for the global energy economy.

UPS’s hybrid fleet is composed of two vehicles from Eaton and Freightliner Custom Chassis Corporation, which just last week unveiled the first fully electric walk-in van. Commercial truck manufacturers like Eaton, FCCC, Smith, and Navistar will be releasing a wide range of new hybrid and electric trucks in the coming years, giving businesses more options and the chance to cut fuel consumption in ways that will one day improve their bottom lines.

UPS has been working with Eaton on hybrid systems for more than a decade now, and in the past has experimented with hydraulic hybrid delivery trucks in addition to the battery-aided trucks it purchased yesterday. The company’s broader alternative fuels fleet is currently composed of hybrid, electric, liquefied natural gas, CNG, and propane powered vehicles.


  • Anon

    It’s great to see UPS doing something for the environment, but considering that it’s 66000 gallons saved annually, that could translate to about $200000. Which results in a less than 1% return on investment.

    A really impressive feat would be to do this, but also make it a good investment. It would be interesting to see what the true cost comes out for UPS after tax shields and subsidies to see what kind of return on investment they get from this. A demonstrably decent return would encourage more corporations to follow in this direction.

  • nyc

    The $25,000,000 investment I am sure has not gone to pay for the increased costs of purchasing the vehicles. 200 vehicles at $125,000 a piece is likely the cost of the entire vehicle (which UPS would have needed anyway). If that price is a 40% premium, then a normal truck costs $89,285. The cost of 200 normal trucks would be $17,857,142. The difference is $7,142,857. If UPS saves $200,000 a year, the return on investment is 2.8% a year. If the truck lasts 5 years, then there would be a 14% return on investment.

  • John K.

    Anon, I think you are mixing up the fuel savings of UPS’s “hybrid fleet” with the cost of UPS’s “alternative fuels fleet.”

    (Last sentence of the article: “The company’s broader alternative fuels fleet is currently composed of hybrid, electric, liquefied natural gas, CNG, and propane powered vehicles.”)

  • tapra1

    For now, UPS is relying on state subsidy programs like California’s Hybrid Truck and Bus Voucher Incentive Project, which will help to offset $20,000 from the extra cost of the vehicles.Top VPS Hosting