Millions of people see the ever-present United Parcel Service (UPS; Atlanta) “big brown” trucks as they deliver packages across the U.S. and to more than 200 countries and territories worldwide. A typical UPS truck makes between 100 and 150 delivery stops each day.
On March 5, that package delivery company gave a huge boost to the propane industry when it announced at the National Truck Equipment Association (NTEA) Work Truck Show in Indianapolis that it plans to purchase 1000 propane-autogas package delivery trucks and install an initial 50 propane fueling stations at UPS locations. Propane will get great recognition as people see “Propane Vehicle” on the side of the trucks, but the attention this deal will get from other companies that operate vehicle fleets could have an even greater impact. Tucker Perkins of the Propane Education & Research Council (PERC) believes that many companies with vehicle fleets look to UPS as a model fleet that quantifies every aspect of its business to save money and the environment.
According to Perkins, the embrace of propane by UPS —which operates what various sources list as the largest commercial fleet in the U.S. at more than 92,000 vehicles — is a momentous event. Perkins, PERC’s chief business development officer, believes the $70-million transaction is one of the largest alternative fuel deployments announced by one company at one time.
UPS also believes it is a big deal, describing it in a news release as “the biggest bulk purchase of propane-[fueled] vehicles yet.”
But although the deal was a pleasant surprise to many in the propane industry, it should not be too surprising when you look at how UPS has touted its sustainability programs for years. The company works to reduce its global greenhouse gas emissions in various aspects of its business. One initiative involved working to get UPS drivers to make more right turns than left to shorten their routes and save fuel. The company’s vehicle fleet, composed mainly of the recognizable brown trucks, is a primary area of focus for the sustainability initiative.
Prior to the March announcement, UPS operated approximately 3150 alternative fuel vehicles, including electric, electric hybrids, hydraulic hybrids, LNG, CNG, biomethane, and ethanol vehicles, in addition to a handful of propane models. The business’ global alternative-fuel fleet includes vehicles in the U.S., Germany, Canada, the Netherlands, Chile, Thailand, Hong Kong, Brazil, and the United Kingdom.
Although UPS operates 900 propane vehicles in Canada, until this past month the company had only used propane vehicles sparingly in the U.S. That changed with the March 5 announcement.
The UPS deal continues a trend for package delivery companies adopting propane for their vehicle fleets. In 2012, DHL Express launched 100 Ford E-250 vans for package pickup and delivery, equipped with the Roush CleanTech (Livonia, Mich.) dedicated liquid propane autogas fuel system. More recently, Chase Delivery (Lancaster, N.Y.), a contractor for FedEx Ground, used incentives from Federal Express to purchase a Ford F-59 delivery truck that runs on a Roush CleanTech dedicated propane system (see p. 29). The truck will serve FedEx Ground’s high-mileage route in Buffalo.
Asked when UPS began looking at propane autogas vehicles as an option, Mike Casteel, the company’s director of fleet procurement, said that was difficult to pinpoint, because the company is in constant communications with vehicle manufacturers about technological advancements. Since Freightliner Custom Chassis Corp. (FCCC; Gaffney, S.C.) was already UPS’ primary chassis provider for the delivery vehicles, it frequently discusses alternatives with the manufacturer regarding the mid-size truck market. Over the past year or two, UPS began the work of getting propane vehicles in its fleet and in recent months began working with several companies to develop an economical option to natural gas. The company last summer completed a pilot program, testing 20 vehicles on propane.
UPS tested them for performance and even installed a propane autogas station near the company’s corporate office in Gainesville, Ga. Although the pilot vehicles have run about 200,000 miles in total, the drivers in the test group quickly determined that the vehicles performed just as well as gasoline models. UPS liked various aspects of propane vehicles that the propane industry has always promoted, such as low cost of the infrastructure compared to other fuels and the lower contamination impact of the infrastructure on the ground, water, and air. Add to that the benefits of the increased range of propane vehicles and the portability of propane compared to CNG, and they saw a winner.
The completed UPS vehicle, which was on display at the Work Truck Show, is a team effort from FCCC, which builds the chassis; CleanFUEL USA (Georgetown, Texas), the liquid propane injection (LPI) fueling system provider; and Powertrain Integration (Madison Heights, Mich.), which supplies the GM 6L engine and packages the entire system into the FCCC truck. PERC provided $780,000 toward the infrastructure project and helped with vehicle certification.
Transitioning to propane autogas is “simply another part of our alternative fuel strategy that has a somewhat different deployment profile than natural gas,” Casteel added. “It’s something we’re able to take advantage of in smaller deployments in rural areas where a natural gas deployment would not be possible. Access to fuel or the economies of scale that are necessary to justify the infrastructure for natural gas is a completely different financial picture than propane.”
FCCC has quite a history with UPS, building at least 25,000 trucks for that company since the 1990s, said Mike Stark, senior technical sales manager for FCCC. He notes that his company is the largest supplier of delivery vehicles for UPS, including gasoline, diesel, CNG, hybrid electric, hydraulic hybrid, and all-electric models, in addition to propane.
The groundwork for FCCC’s involvement in the UPS project was set about three years ago when FCCC began work on the S2G propane bobtail project with CleanFUEL USA and Powertrain Integration. Because the three companies were familiar with each other from working on that product, they were ready when the UPS project presented itself. FCCC began by building the chassis for the 20 prototype vehicles that UPS used for its 2013 pilot project in Gainesville, Ga.
The decision to commit to propane by what is said to be the country’s largest commercial fleet validates the propane commercial van market, said Bryan Henke, FCCC manager, product marketing. He sees the chassis being used for other markets in addition to package and delivery. Prospects include the beverage, linen, and baking and snack industries.
“Beverage I think is a good target because they need high gross vehicle weight,” Henke noted. “For people who operate vehicles in other vocations, it’s opened their eyes, ‘Wow, we could not only be more efficient with the vehicle but we could also save money on fuel, be environmentally friendly, and get a return on investment that‘s going to help our bottom line.’”
CleanFUEL USA’s Involvement
The UPS news is a celebration not just for the companies involved, such as CleanFUEL USA, but for the entire propane industry, said Curtis Donaldson, CEO of CleanFUEL USA. He remembers how the propane autogas industry was “on life support” in the 1990s and early 2000s. The growth of the autogas industry now, he added, is “a rising tide that lifts all boats.”
He agreed with Perkins about UPS’ program as a model that other fleets follow. CleanFUEL USA and all autogas industry suppliers can call on customers and say, “What is it that UPS knows that you don’t know?”
“I think the industry can claim that the world’s largest fleet has elected to go with propane. How can that not be good?” Donaldson asked.
It’s going to be good for UPS, which will initially deploy the vehicles in Louisiana and Oklahoma, and is already finalizing additional states for deployment. “Now we have to do what we committed to doing,” said UPS’ Casteel. “We will begin deployment probably sometime in the summer.”
PERC was involved early in the process, approving $385,000 in funding to assist in developing the UPS product; it worked with Powertrain Integration on calibration of the E78 controller for propane and with CleanFUEL USA on getting the vehicle certified by the Environmental Protection Agency and the California Air Resources Board.Involvement with UPS carries weight with fleet managers across the country because the firm quantifies every aspect of its business to save money and the environment, notes Perkins.
“So for them to ultimately come to a point where they’re making a large move forward to propane autogas, I think should speak volumes to people who watch UPS,” Perkins stated.
“I also like the intangibles that come along with that. [For example], when they start talking about how their drivers like the performance and how their mechanics like the access and [ease of repairing] the vehicles. They’ve also made clear they approve of the low-cost infrastructure and not having to worry about polluting ground, air, or water with the dispensers. UPS is a high-tech quantifying company that’s making a corporate commitment, and we haven’t seen that before in this industry.” —Daryl Lubinsky
UPS’ deployment of propane vehicles will involve the unveiling of new low-emission fueling nozzles, which will highlight the “man-machine interface of the fueling,” said Tucker Perkins of PERC.
Part of the Deal
PERC and UPS plan to review several nozzle models, including those now used in Europe. The top priority is to field test a nozzle that offers required safety features, is low-emitting, and is user-friendly for the staff that refuels the vehicle.
”[The nozzle must be] easy to use. We must ensure it doesn’t open until the connection is made, and it can’t disconnect until the re-fueler disconnects it,” Perkins stated. “We’re going to use this UPS field deployment as the perfect opportunity to demonstrate this nozzle technology.”
Ultimately, PERC’s goal is to spur the adoption in the U.S. of an autogas refueling nozzle with low emissions that can be easily and quickly connected to a vehicle tank. That technology can then be demonstrated to convince state energy officers and code officials to reduce or possibly eliminate current public training requirements on fueling.
Propane Vehicles Prominent
Also at the National Truck Equipment Association’s (NTEA) Work Truck Show in March, CleanFUEL USA announced its new vehicle offering, the GMC C2500 pick-up truck equipped with a 6.0L engine and CleanFUEL USA liquid propane injection (LPI) system. This recently updated system includes a simplified design and new fuel rails for reduced weight, yielding less heat absorption and promoting the liquid phase of the propane injection process.
At Work Truck Show
CleanFUEL USA’s Curtis Donaldson said his company saw an opportunity with its propane system for the GM G4500 cut van chassis. But he believes the C2500 and C3500 3/4- and one-ton pickups are a higher-volume market. The only difference between the C2500 and C3500 and the G4500 is that the C-series required a different controller. The company was developing the E78 controller for the UPS vehicles, so it decided to use that controller to also manufacture the system for the C2500 and C3500 pickups. Donaldson noted many customers have asked for the C2500 and C3500 products, and his company is working to bring that product to market. CleanFUEL USA is expected to soon gain EPA certification for several General Motors 6.0L light-duty applications, including the 2500/3500 pickups and cargo vans.
FCCC and CleanFUEL USA also displayed an FCCC S2G with a Linebacker crane truck body at the NTEA show. Bryan Henke of FCCC told BPN that start of production for the S2G is set for mid-June, but in the meantime, he told BPN that AmeriGas would be field-testing its first S2G unit.