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UPS to expand U.S. fleet with 1,000 propane-fuelled trucks

UNITED Parcel Service Inc is investing US$70 million in the expansion of its delivery fleet with a bumper order for 1,000 new propane-fuelled trucks, as output of the fuel in the United States hits record highs.

UPS is buying the vehicles from Daimler AG's Freightliner Custom Chassis Corp, and they will initially replace gasoline and diesel vehicles in Louisiana and Oklahoma before the programme is rolled out to other US states, a company statement said.

Operations will begin by mid-2014 and are slated for completion by early next year. The investment will include 50 new fuelling stations.

The vehicles on these routes can travel up to 200 miles on a tank of propane. They are expected to travel 25 million miles and displace 3.5 million gallons of gasoline and diesel per year.

The record order for additional trucks comes after the company tested 20 propane-powered delivery trucks successfully this winter.

UPS, in collaboration with the Propane Education & Research Council (PERC), a non-profit propane technology incubator, worked with equipment manufacturers to secure certifications with the US Environment Protection Agency (EPA) and California Air Resources Board.

"The opportunity to road test new propane vehicles and fuelling equipment with one of the most sophisticated fleets in the country is a major milestone for the propane industry," said president and CEO of PERC Roy Willis.

"This announcement is the culmination of many entities bringing together the best in propane technology to achieve the greatest economic and environmental results."

The express delivery company has a fleet of 3,150 alternative-fuel vehicles running on compressed natural gas, liquefied natural gas, biomethane and electricity, and already operates 900 propane-powered trucks in Canada.

Propane is "a clean-burning fuel that lowers operating costs and is readily accessible, especially on rural routes in the United States," chief operating officer David Abney was quoted as saying in a Reuters report.

Output of propane, which is produced alongside oil and gas and is traditionally used for heating, is at all-time highs in the United States thanks to a drilling boom. Propane is on average between $1.25 and $1.50 per gallon cheaper than gasoline at the pump, a UPS spokeswoman said.

Despite higher output, the delivery network came under severe strain as cold weather drove heating demand higher this winter. Propane suppliers struggled to deliver enough fuel to millions of homes and businesses leading to supply rationing, which caused prices to surge.

"We have identified some improvements that can be made in our infrastructure," said Mr Willis. His organisation expects 244,000 propane vehicles to be in operation in the United States by 2020.