Revising Another FedEx Sustainability Goal

FedEx Blog: EarthSmart

by Mitch Jackson

When a worthwhile trip takes less time to reach the destination, what else is there to do but to extend the trip?

It's been two years since I wrote the post, Keep On Truckin'. Given where we've come with our vehicle strategy's execution, we wanted to give a travel update:

So, what about that revised FedEx sustainability goal in the blog post title? Raise it, lower it, or extend the time? First, it's good to look back since we have had a few gratifying moments along our journey:

• FedEx was the first transportation logistics company to push for commercial vehicle fuel economy / greenhouse gas legislation, subsequently enacted along with new passenger vehicle standards by the Bush Administration in the Energy Independence & Security Act of 2007. We did this to help scale new, cleaner vehicle solutions for the nation. And, it's working. The country is burning less oil today than we were just a few years ago due, in part, to these new vehicle efficiency standards for passenger vehicles - estimates put it at about one million barrels of oil saved per day. And, there's more good news coming since commercial vehicle fuel efficiency standards go into effect in 2014.
• In 2008, FedEx set our industry's first fuel efficiency goal with a 20% improvement in fuel efficiency by 2020 from a 2005 baseline year for our FedEx Express fleet. More on this below.
• Our hybrid electric vehicle development for commercial vehicles with Environmental Defense Fund was important, with the 2008 quote: "FedEx has helped make hybrid truck technology a reality. More than 50 companies have added hybrid vehicles since FedEx led the launch that changed the marketplace.". The quote is on page 24 of our first FedEx Global Citizenship Report in 2008.
• We brought new, "purpose-built" electric vehicles to the U.S.
• And, our work to bring more fuel efficient vehicles into commercial delivery, including smaller trucks, composite vehicles and retrofits.

So, we are announcing two major milestones for this trip - one achieved, and an additional one to reach:

• In our Fiscal Year 2012, FedEx Express achieved its goal of a 20% improvement in fuel efficiency from a 2005 baseline year, well ahead of schedule. In fact, we actually exceeded it with a 22% cumulative improvement in fuel economy for these vehicles.
• As a result, we have raised our original 20% goal by 50%, now having a goal of 30% improvement in FedEx Express fuel efficiency in the original timeframe of 2020.

So, to recap the answer to the question posed earlier - raise it, lower it, or extend the time? Raise it, with no extension of time.

But, why fuel economy? Why not simply reduce soot and smog emissions only? It's due to several reasons really:

1. Emission standards have been in place for years that require new commercial vehicles to have reduced soot and smog emissions. In fact, current soot (particulates) emission standards for new vehicle engines require 90% lower emissions than they did in 2006. And, current smog (NOx) emission standards require approximately 85% lower emissions than they did in 2009.
2. It's one thing to report on the drop in emissions from such regulations. But, our team didn't feel that a goal to reduce emissions that were already mandated by laws and regulations, in and of itself, was a sufficient mechanism to show real progress or leadership. In essence, these particulates and NOx emissions will drop significantly through new vehicle purchases no matter what else we do. It's a legal requirement.
3. Improving the efficiency of operations, and the efficiency of the equipment used in those operations, was a better method to use.
4. In addition, we saw the opportunity to push for needed improvements in fuel efficiency and greenhouse gas emissions from a regulatory framework that would apply to ALL commercial vehicles, not just ours.
5. Focusing upon fuel economy accomplished two objectives: (i) reduced fuel usage; and (ii) reduced greenhouse gas emissions, as well. This is a sustainable approach - an improvement in environmental impact and the economics of operations simultaneously.
6. What's the upshot? Fuel use and greenhouse gas emissions drop due to our goal; regulation coming into effect next year that requires more reductions in greenhouse gas emissions; and, soot and smog emissions drop from regulations already in effect.

We are pleased about this for the obvious reasons. But, an additional one is synergy - a good thing to have when focusing upon sustainability. Specifically, this revision in our vehicle fuel efficiency goal mirrors the path we have taken with our aircraft emissions. In that, we also began with a 20% reduction goal in emissions intensity, and, in 2012, raised it to a 30% emissions reduction goal in the same timeframe.

I want to especially thank and congratulate our FedEx Express Vehicle team. You have provided the vehicle solutions that allowed us to continue serving our customers while reducing our impact on the environment and communities in which we operate.

Who says you can't have your cake and eat it too? It sure seems possible on this drive.