News & Views

UPS’ Mike Casteel on the Process of Shifting to Natural Gas Vehicles

03/17/2017

UPS has announced plans to build an additional six compressed natural gas (CNG) fueling stations, and add 390 new CNG tractors and terminal trucks and 50 liquefied natural gas (LNG) vehicles to its alternative fuel and advanced technology fleet. The use of natural gas reduces greenhouse gas emissions six to 11 percent, according to the U.S. Department of Energy.

Sustainable Brands spoke with Mike Casteel, UPS’ Director of Fleet Procurement, to discuss the company’s ongoing initiatives in natural gas-powered vehicles.

UPS is well-known for using a range of sustainable fuel options for its vehicles -  not only natural gas, but also hybrid electric, ethanol, and fully electric vehicles - all part of your Rolling Laboratory. Why the focus on expanding natural gas vehicles?
Different types of fuel are more appropriate for different types of vehicles. The equipment involved in this initiative is Class 8 equipment, our tractor fleet, which displaces a lot of fuel. By using natural gas at this level, UPS can really “move the needle” on harmful emissions.
Twenty percent of UPS’s tractor fleet is now made up of alternative fuel and advanced technology vehicles. UPS’s LNG and CNG tractors drive 6.3 million alternative fuel miles per week. Of the total miles UPS drives in its tractor fleet, 27 percent of those miles are now alternative fuel miles - so the needle is definitely being moved.

There are multiple ways to derive natural gas, including from decomposing organic waste in landfills, wastewater treatment, and agriculture. Does UPS monitor how the natural gas in its vehicles is derived?
It’s difficult for UPS to track where our natural gas originated, because of the nature of natural gas and how it comes to us. We are a few steps removed from the actual sourcing process. In terms of our emissions though, we do know that the use of natural gas itself has decreased our CO2 emissions by 100,000 metric tons.

How close is UPS to achieving its goal of logging one billion miles with its alternative fuel and advanced technology fleet by the end of 2017?
UPS surpassed this goal in 2016, a full year ahead of schedule, and will be setting new goals with the release of its next sustainability report.

What are some of the challenges you face in organizing an initiative like this?
The cost of building the infrastructure that goes along with use of natural gas has to be considered, and the cost of diesel fuel is also comparatively low at the moment. These projects involve investing a lot up front, and we need to find a way to recover that investment. These kind of initiatives are suited to vehicles in the fleet with a high density, that are running an above average number of miles.  We need to find the right place that can also handle the correct flow of gas, meaning sufficient gas pressure and capacity.

SB is primarily a community that promotes learning among our corporate members, of which UPS is one. What lessons have you learned throughout the process of switching to natural gas-powered vehicles?
These kind of initiatives primarily require support from the top down. UPS’s fleet is massive, so it also allows us to take risks and experiment in ways that other fleets may not be able to. While UPS is innovating because our scale allows it, we are also trying to help transform the transportation industry through leading by example. By showing that investment in alternative gas can strengthen a business, we hope that other businesses will come on board.

Company: 
UPS

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