UPS Invests in Propane Fuel Option For US Delivery Fleet

Initial fueling infrastructure built at 50 locations in collaboration with Propane Education & Research Council

UPS Refueling

ATLANTA, March 5, 2014 – UPS® (NYSE: UPS) today announced plans to purchase 1,000 propane package delivery trucks and install an initial 50 fueling stations at UPS locations. The investment in propane vehicles and infrastructure is approximately $70 million. The propane fleet will replace gasoline- and diesel-fueled vehicles used largely in rural areas in Louisiana and Oklahoma with other states pending. The vehicles on these routes can travel up to 200 miles on a tank of propane. Operations will begin by mid- 2014 and be completed early next year.

“The UPS alternative fuel strategy is to invest in the most environmentally friendly and economical energy sources,” said David Abney, UPS chief operating officer.

“Propane meets those criteria as a clean-burning fuel that lowers operating costs and is readily accessible, especially on rural routes in the United States. States that attract this type of investment with tax incentives and grants will factor into the UPS deployment UPS, in collaboration with the Propane Education & Research Council (PERC), a non-profit propane technology incubator, worked with equipment manufacturers to secure certifications with the EPA and California Air Resources Board.

UPS tested 20 propane-powered brown delivery trucks successfully this past winter in Gainesville, Ga., and expanded its order with Freightliner Custom Chassis Corp. UPS uses a “rolling laboratory” approach to test different fuel sources and technologies according to their route characteristics. The new propane fleet is expected to travel more than 25 million miles and to displace approximately 3.5 million gallons of conventional gasoline and diesel per year.

“The opportunity to road test new propane vehicles and fueling equipment with one of the most sophisticated fleets in the country is a major milestone for the propane industry,” said Roy Willis, president and CEO of PERC. “This announcement is the culmination of many entities bringing together the best in propane technology to achieve the greatest economic and environmental results.”

The UPS deployment this year benefits from propane autogas’ wide availability as a result of increased natural gas production in the U.S., and there is more price stability with the accessible supply. UPS currently operates nearly 900 propane vehicles UPS has one of the largest private alternative fuel fleets in the nation with more than 3,150 alternative fuel and advanced technology vehicles. This includes all-electric, hybrid electric, hydraulic hybrid, CNG, LNG, propane, biomethane, and light-weight fuel-saving composite body vehicles.