Electric trucks have been grabbing headlines lately, as startups and established truck makers develop and test battery-powered models, but don’t discount compressed natural gas (CNG) as an alternative fuel. UPS last month invested $130 million to buy more than 700 new CNG-powered trucks and related technology, building on $190 million in CNG investments in the previous two years.

That dwarfs the company’s order in January for 125 Tesla all-electric Semis. Those trucks, still in development, are expected to be delivered in 2019. “The buzz is all about electric. But unfortunately, we only have 300 electric vehicles [EVs] in our entire fleet,” Scott Phillippi, UPS senior director of maintenance and engineering, international operations, said in an interview.

The CNG-powered truck “is what we hope electric evolves into,” Phillippi said. “It’s a viable option through the truck OEMs [original equipment manfacturers], you don’t need a boutique solution.” A fueling infrastructure is in place, and while CNG is not as ubiquitous as diesel, the fuel is available where needed. “CNG may not be the perfect solution, but let’s not let perfect be an enemy of good,” he said.

This isn’t an “either one power-source or the other” situation, Phillippi stressed. “There’s so many different applications of technology, and in some cases, hybrid solutions.” In addition to the Tesla order, UPS is working with manufacturer Workhorse to develop an electric package car. “Electric is part of the equation, but right now it’s a combination for sure,” he said.

The CNG investment helps UPS get closer to its goal of having one in four vehicles purchased be either an alternative fuel or advanced technology vehicle by 2020. By 2025, UPS hopes alternative fuels will represent 40 percent of total ground fuel, up from 21.8 percent a year ago. In 2017, UPS CNG vehicles racked up 1.8 million miles a day, or 8 million miles a week.

Several factors ar boosting alternative fuels

Several factors are propelling UPS and other transportation operators toward alternative fuels, fuel economy and efficiency being just one. But UPS’s global customers are serious about corporate targets to reduce their carbon footprint and greenhouse gas (GHG) emissions. Increased urban traffic also is leading to more local air quality regulation, as in Southern California.

In Dublin, Ireland, UPS last year introduced an “eco package hub” distribution center from which deliveries are made either by foot or by bike — a throwback to UPS’s origins in 1907, when company founders James E. Casey and Claude Ryan made deliveries by bicycle. The largest global transportation provider, UPS tested electric-assist trailers and bikes in London too.

UPS has more than 9,000 alternative fuel vehicles in its “rolling laboratory,” out of a fleet of more than 100,000 vehicles. They include electric and hybrid EVs, hydraulic hybrids, ethanol and propane vehicles, as well as CNG and liquefied natural gas trucks. “We don’t have any hydrogen vehicles in our fleet, but we want to be experienced in all areas,” Phillippi said.

All of these vehicles, he pointed out, have strengths and weaknesses, and some may be better suited for specific regions or applications than others. In Europe, Phillippi said, there’s not as much interest in CNG as in the United States. “They’re more concerned about carbon footprint than [GHG] or NOx [nitrogen oxide] emissions,” he said. CNG, of course, is a carbon-based fuel.

UPS is purchasing 400 Class 8 CNG tractors from Freightliner and Kenworth and 330 terminal trucks from TICO. The company also will build five new CNG fuel stations, and deploy the vehicles on routes connected to those stations. “Natural gas has a real important place in our fleet,” Phillippi said. “With CNG, you can add renewable natural gas by capturing methane [emissions] that would have gone into the atmosphere and burning it for fuel.”

Most important, CNG technology is well established, with a nationwide fueling footprint. UPS has been working with the fuel since the 1980s, and has seen several generations of technical improvements. “There’s been a lot of lessons learned along the way,” Phillippi said. “We started out thinking there wasn’t going to be enough capacity for energy on board with CNG.”

The ability to carry more CNG fuel onboard in stacked fuel tanks as vehicle design evolved was “probably our biggest leap forward,” Phillippi said. “Now we can do what a diesel [vehicle] can do from a [mileage] range standpoint, and that’s important. We used to talk about reliability with the fleet. We can now say the CNG fleet is performing as well if not better than the diesel fleet.”

One factor driving interest in alternative fuels among truckers is the increasing cost of diesel emissions control technology. “With CNG, we’re trading diesel aftertreatment systems for spark plugs. That’s been a good trade for us,” Phillippi said. Diesel isn’t going away anytime soon as a major fuel, but the use of alternatives such as natural gas and electricity is sure to expand.

There’s no doubt EVs will play a bigger and bigger role as the infrastructure needed to power them expands and their reliability increases. “We think electrification is getting really close to starting to make sense financially,” Phillippi said. “When you want to put 100 vehicles in a facility, you have to think about how to deploy a vehicle that uses that much energy.”

“We’d like to see electric business cases drive this forward,” he said. “We need to quantify the value [EVs] bring to a business. My expectation is that electric will take the same role internal combustion engines did in the 1930s and 1940s, but we make decisions based on bottom-line impact, based on economics.” And currently, the economics for UPS favor CNG.

Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @willbcassidy.

 

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