UPS Digs Deep into Footprint, Sets High Goals for Fuel Efficiency

United Parcel Service decreased energy and water use as well as its greenhouse gas emissions last year in the U.S., prompting the company to set a new goal of 20 percent improvement in automotive fuel efficiency by 2020.

The environmental efforts are detailed in UPS’s latest sustainability report, which was published Monday.

The higher standard for fuel efficiency is set against a baseline year of 2000 and if achieved would double the company’s performance in the area thus far. From 2000 through 2009, automotive fuel efficiency increased 10 percent, UPS reported, noting that its drivers covered 77.3 million miles more in 2009 than they did in 2000 but consumed 3.2 million gallons less fuel.

The new target for automotive fuel efficiency dovetails an air fleet efficiency goal announced last year: After several years of steadily increasing efficiency in air operations, UPS said it would reduce the carbon emissions by its air fleet by 20 percent by 2020, compared to 2005.

The company’s move to raise the bar for efficiency in its ground and air operations were among the highlights of a sustainability report that noted improvement in the majority of the company’s environmental key performance indicators.

UPS started compiling sustainability reports in 2003 and this year’s report, which covers operations in 2009, is the first to publish information on the company’s global greenhouse gas emissions (including CO2, CH4, N2O and HFC) for Scope 1 and Scope 2 emissions. (see chart, right). Previously, the company reported only on CO2 emissions.

The information also reflects more extensive data collection by UPS, which process mapped all transport-related activities that generate carbon across the company globally in reporting CO2 Scope 3 emissions this year. As noted in the chart below left, direct emissions fell almost 9 percent from 2008 to 2009 while indirect emissions almost tripled.

“As you see, we continue to evolve and we’re working very hard at mapping out our impact,” said Steven Leffin, UPS’s corporate sustainability manager.

Leffin pointed to those efforts, UPS’s heightened transparency in reporting and  its new goals for fuel and air fleet efficiency as some of the key accomplishments by the company in the past year.

Although revenue slipped from $51.5 billion in 2008 to $45.3 billion in 2009 as the recession continued, UPS remained the world’s largest package delivery company and handled 3.8 billion packages in 2009. The U.S. domestic package operation, the company’s largest business segment, accounted for 62 percent of the revenue and showed improvement in energy efficiency as well as emissions when compared to parcels handled. When measured against revenue, however, energy consumption and emissions rose in 2009.

Energy consumption was 3.5 percent lower per 1,000 packages and rose 3.6 percent per dollar of revenue. CO2e emissions declined 3.1 percent per 1,000 packages and increased 3.8 percent per dollar of revenue, the company reported.

The sustainability report examined the company’s work to reduce energy consumption, emissions, water use and fuel consumption on the ground and in the air.

UPS, which prides itself on deeply detailed measuring and monitoring to boost environmental performance, presented data in terms of absolute change and as an efficiency rate based on what it takes to deliver a package or produce revenue.

Specifically, UPS decreased: 

Energy Use

Absolute direct and indirect energy consumption for U.S. package operations and for U.S. supply chain and freight fell. U.S. package operations consumed 96.80 million gigajoules in 2009, about 7 percent less than the 104.1 million gigajoules in 2008. U.S. supply chain and freight consumed 16.55 million gigajoules of energy in 2009, 19.4 percent less than the 20.53 million gigajoules in consumed in 2008 (see chart at right).

Energy efficiency, expressed as energy consumption per 1,000 parcels in U.S. package operations, came to 29.33 million gigajoules in 2009, compared with 30.40 million gigajoules per 1,000 packages in 2008. Meanwhile, energy consumption per $1,000 of revenue was 3.44 gigajoules for 2009 an increase from the 3.32 gigajoules for $1,000 of revenue in 2008.

Emissions for U.S. Package Operations

Absolute direct and indirect CO2e emissions for U.S. package operations also dropped. CO2e emissions came to 7.27 million metric tonnes in 2009, compared with 7.75 million metric tonnes in 2008 (see chart below right).

Carbon efficiency, expressed as CO2e emissions per 1,000 parcels in U.S. package operations, were 2.18 metric tonnes per 1,000 packages in 2009, compared with 2.25 metric tonnes per 1,000 packages for the previous year. Viewing emissions compared to revenue, CO2e emissions came to 25.55 metric tonnes per $100,000 of revenue in 2009, an uptick from the 24.61 metric tonnes CO2e for the same amount of revenue in 2008.

Water Use

Water consumption decreased in absolute terms and in water efficiency rates based on number of packages handled and revenue. The company’s absolute water consumption in 2009 came to 4.52 million cubic meters for U.S. package operations, supply chain and freight, compared with 5.04 million cubic meters in 2008. In 2009, 1.18 cubic meters of water were consumed per 1,000 packages in U.S. package operations, compared with 1.28 cubic meters of water per 1,000 packages in 2008. In a look at water use compared to revenue, UPS consumed 0.138 cubic meters per $1,000 of revenue in 2009 compared with 0.139 cubic meters per $1,000 in 2008.

Fuel Consumption and Air Fleet Emissions

Gallons of fuel consumed on the ground to deliver a single package decreased. In 2009, it took an average of 0.121 gallons of fuel to deliver a single package in the U.S. using UPS’ ground network, which includes its fleet of more than 95,000 vehicles as well as rail services. That’s a nearly 5 percent improvement over the figure for 2008. The company’s green fleet grew to 1,883 alternative fuel vehicles in 2009 with the addition of 245 compressed natural gas vehicles.

Carbon emissions of global airline operations based on the amount on CO2 emitted when transporting a ton of capacity one nautical mile, termed an available ton mile or ATM, also dropped. The measure of carbon efficiency was 1.40 pounds of CO2 per available ton mile in 2009, compared to 1.42 pounds of CO2/ATM in 2008. The goal to increase carbon efficiency by 20 percent between 2005 and 2020, builds on previous gains in the area. If achieved, UPS will increase carbon efficiency by 42 percent compared to 1990.

Gallons of jet fuel consumed per 100 available ton miles. UPS used 6.63 gallons of jet fuel per 100ATM in 2009, a drop from the 6.73 gals/100ATM logged in 2008. The company originally set a target of 6.9 gals/100ATM for 2011 target, but surpassed the goal in 2008. It has a new target of 6.57 gals/100ATM for 2012.

The firm’s goals for reducing carbon emissions in its airline operations, which would be the ninth largest in the U.S. if it were an airline company, are among the most aggressive in UPS’s ambitious environmental program.

UPS’s efforts include joining 10 other members of the Air Transportation Association of America to support development of aviation biofuel development by signing a memorandum of understanding with two potential aviation biofuel developers in 2009.

Airline operations account for 53 percent of the company’s global carbon footprint, so focusing on that area is an imperative, Leffin said. Overall, the company’s improvements in environmental performance demonstrate the value of UPS’s integrated transportation network of package cars, vans, trucks, rail and shipping services, and aircraft, he said.

The company not only optimizes the way each functions (down to specific drivers and their routes), the firm also employs sophisticated systems to optimize carbon and energy efficiency across a single delivery and delivery operations as a whole.

The process, which UPS calls “decarbonization synergy,” ensures that packages get to their destinations with the least environmental impact without compromising delivery schedules and customer service, Leffin said.

The company also is providing services for customers to help lighten the environmental tread of their packages. UPS introduced a carbon offset program last October and expanded it to 36 countries this summer. It also rolled out its Eco Responsible Packaging Program this spring.

The sustainability report is available at www.responsibility.ups.com/Sustainability. This year’s report was assured by Deloitte & Touche LLP and checked by the Global Reporting Initiative — two other firsts for the company.

All images and charts courtesy of UPS.