CEF Spotlight

The Most Important Sustainability Question at UPS

Rhonda ClarkBy Rhonda Clark, Chief Sustainability Officer, UPS

What is the most energy-efficient way to deliver a package from point A to point B? It’s a good question. And for the legion of engineers at UPS, it’s more than that—it’s a compelling challenge that has profound implications for the global environment.

Let me elaborate. Given a set of parameters like origin, destination, and package weight, I could give you an answer to the question. But as with most things, the technical reality complicates the simplicity of rote formula.

For UPS, the complications are actually pretty straightforward. We don’t just deliver one package from A to B. We deliver nearly 17 million packages each day to more than 220 countries and territories using 2,700 worldwide operating facilities, nearly 2,000 daily flight segments, more than 100,000 vehicles, and a global workforce of nearly 400,000 people.

What transforms these factors from a complex equation into a compelling sustainability challenge isn’t where we are today—it’s where the world will be tomorrow. Roughly 1 billion people from developing economies are now entering the market for goods and services, and the global population is expected to increase by billions in the coming decades. According to some forecasts, global trade in goods is expected to increase at an average annual rate of 6% between now and 2030.

With more people participating in world markets, more resources will be consumed to produce more things. Shippers like UPS will have to expand their networks to meet these demands. But to do so sustainably, it will be imperative for companies in our industry to push the boundaries of energy efficiency and search for an answer to that original question, even if it remains an elusive technical reality.

At UPS, we understand that our greatest contribution to sustainability is to connect people to markets in the most efficient way possible. We also understand that the scope of tomorrow’s sustainability challenges requires us to adapt and innovate if we are to deliver more goods for our customers while consuming less fuel, generating fewer greenhouse gas emissions, and driving fewer miles.

Here are 3 examples of how UPS is doing just that.

  1. Mastering the Details
    Within our single integrated network, we master millions of details. For each of the nearly 17 million packages we deliver on an average business day, we capture data about times, locations, and customer requests. A typical day’s route for a single driver in the United States includes about 120 delivery stops, which means there are more ways to drive the route than nanoseconds in the history of the Earth. Each business day we gather nearly 240 data points for tens of thousands of vehicles and drivers. All this information helps us increase our efficiency and reduce our environmental impact.
  2. Relentless Innovation in Our Network
    UPS has one of the world’s largest private-sector databases, and we spend around $1 billion each year on operational efficiency and technological investments. Recent results include the mathematical algorithm behind ORION, which stands for “on-road integrated optimization and navigation.” ORION knows 250 million delivery addresses and the routes our drivers have used in the past. It analyzes the day’s delivery route, locations that require specific delivery and pickup times, and rules for drivers to prepare optimized routing instructions right up to the minute a driver is dispatched.

    With our initial deployment of ORION in 2013, we optimized 10,000 delivery routes in the United States. We expect to avoid 14,000 metric tons of greenhouse gas emissions and save 1.5 million gallons of fuel on those routes in 2014.  We will continue to roll out ORION and expect to achieve full U.S. deployment in 2017.

  3. Shaping the Future of Fuels
    Our global fleet is one of the most diverse in the private delivery industry. We call it a “rolling laboratory” because it enables us to learn how well alternative fuel and advanced technology vehicles meet our demanding requirements in commercial use. We have 9 types of alternative fuel and advanced technology vehicles, but natural gas stands out right now.

    At the end of 2013, we had 249 liquefied natural gas (LNG) trucks on the road. These vehicles cost less to operate than conventional trucks, their emissions performance is better, and they give us more overall fuel flexibility. We plan to have over 1,000 LNG vehicles in operation by the end of 2014. We also plan for all new tractors purchased for our U.S. Domestic Small Package operations in 2014 to be LNG or compressed natural gas. These vehicles are a key part of our efforts to achieve 1 billion miles driven in our alternative fuel and advanced technology vehicles by the end of 2017 (from a 2000 baseline), and reduce our use of conventional fuel.

These examples contributed to an important sustainability accomplishment for UPS in 2013. For the second year in a row, we surpassed our 2016 goal to achieve a 10% reduction in our carbon intensity from transportation, using 2007 as a baseline year. As a result, we recently announced a new goal: to achieve a reduction of at least 20% by 2020 – double the reduction target of the previous goal. We’re proud of attaining our 2016 goal ahead of schedule. But we know that even with one of the most efficient logistics networks on earth, we must meet the needs of our customers and prepare for the new ones, all while doing everything we can to minimize our environmental impacts.

To learn more about UPS and sustainability, see the company’s 2013 Corporate Sustainability Report at ups.com/sustainabilityreport. It is one of the first reports in the United States prepared at the “In accordance-comprehensive” level of the new Global Reporting Initiative G4 guidelines.

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