The United Parcel Service, known as UPS or Brown, is the world’s largest package delivery company . UPS transports approximately 2 percent of global GDP per day ! Operating in over 220 countries and territories, UPS ships 4.7 billion packages a year and demands tremendous amounts of energy to fuel its 110,000 vehicles, 1,955 daily flights, and 2,500 operating facilities . With transportation at its core, UPS is vulnerable to several climate change externalities. Practically, UPS must forecast and adapt to uncertain future energy options, prices, and supply levels. Additionally, UPS must be current and compliant with worldwide government regulations intended to lower global emissions. Beyond regulations, UPS must address growing consumer pressure for sustainable transportation practices, supplies, and services.
Brown Getting Down with Sustainability
Beginning in 2000, UPS has been hustling to get ahead of both government regulators and its package delivery competitors such as FedEx and the United States Postal Service. For instance, in European Cities, UPS has launched its newest fleet of electric powered package delivery trucks. Additionally, they have begun testing delivery routes serviced with tricycle hybrid vehicles to further reduce emissions and road hours . After accomplishing a campaign for 1 billion alternative vehicle miles, UPS continues to drive 1 million miles a day with its alternative vehicle fleet (7,200 total) . Climate change’s sparking of innovation and investment in alternative fuel and energy sources benefits UPS. The company continuously experiments with different advanced technologies such as “electric, hybrid electric, hydraulic hybrid, ethanol, propane, compressed natural gas, liquefied natural gas, renewable natural gas”, and even foot pedal fueled vehicles (phew!) . But are they doing enough with 6.5% of its total fleet powered by alternative energy sources? They must align their vehicle replacement cycle timelines and goals with global climate change reduction initiatives.
Historically, UPS has strived for increasing its operational efficiency with route planning. Recently, UPS has made substantial investments in data analytics research to dissect the efficiency of its package car delivery routes. In 2015, the company rolled out its cutting edge route optimization software known as ORION (On-Road Integrated Optimization and Navigation) with the goal of reducing idle emissions and increasing route efficiency. For example, by end of year 2016, UPS has forecasted a “reduction of 100 million miles annually, saving 10 million gallons of fuel and reducing 100,000 metric tons of CO2” . Similarly, UPS has invested in research and development to reduce unnecessary equipment weight and maximize cargo utilization for its aircraft, intermodal, and freight fleets. Since 2010, these technological investments and coordination improvements have reduced total carbon emissions by 21.7 million metric tonnes (the equivalent of taking 4.6 million vehicles off the road for an entire year) . To further help offset its carbon footprint, the company now offers carbon neutral shipping options that fund carbon offsets for environmental projects throughout the world . To date, UPS has planted 5 million trees worldwide and aims to plant 15 million more by 2020 .
What Can Brown Do for You? Leadership in Sustainable Innovation
UPS’ fleet of truck, trains, planes, and classic brown uniforms all play an essential role in the rapid growth of ecommerce, international trade, and emerging market development. Thus, UPS has a unique position to exert meaningful influence on logistic supply chains all over the world. Although they still have plenty of space for improvement, there will be a marginal benefit to improving their current framework of operations. They also have the physical infrastructure and opportunity to affect consumer culture. Urban deliveries can be quite complex and energy consuming due to traffic, less optimal routes, and vehicle idle time. UPS has an opportunity to reduce carbon emissions and alter the city delivery culture by offering consumer incentives to grow its Access Point pickup locations.
Word Count: 635
All photos from https://sustainability.ups.com/