Eco dogfight: UPS says it's way greener than FedEx
Filed under: Energy, Technology
Not too long ago, getting a package to arrive overnight was a good enough marketing claim to win over customers. But in this era of sustainable business practices, everyone from Wal-Mart (WMT) to Walt Disney (DIS) is burnishing their eco-cred in the hopes of coat-tailing on the current green ethos.
The green factor increasingly plays a role in customer decisions. Which is probably why package and shipping giant United Parcel Service (UPS) has come out swinging against arch-rival Federal Express (FDX). The two mega-brands have been locked in a public dogfight over who's green cred is more legit and which company is actually running a more sustainable operation.
The battle was kicked off by the latest Newsweek magazine's greenest company rankings, which put UPS at No. 85 ahead of FedEx at No. 93. UPS began trumpeting this win in the blogosphere, chatting with ClimateBiz about why Big Brown is absolutely, positively greener than FedEx.
To get to the bottom of this brouhaha, I contacted both companies. Only one got back to me, UPS. Which probably tells you something about who really is the winner here. According to UPS data, which is based on public reporting of sustainability practices by both companies, Big Brown bludgeons FedEx into eco-oblivion.
The biggest chunk of emission for both companies is, of course, jet airplanes. Jets are notorious as one of the biggest contributors to global warming gas buildup on a per mile traveled basis. But according to the UPS data, there is a huge difference in the amount of CO2 spewed out by the two companies jets. FedEx planes put out roughly 53 percent more CO2 per air-ton mile compared to their more efficient brethren at UPS.
True, both companies have an ambitious goal of jet CO2 emissions reductions of 40 percent from baseline levels by 2020. And FedEx, according to its corporate sustainability report, has cut it jet-caused CO2 emissions by nearly 4 percent in the last five years. But UPS got a big headstart. It started swapping out gas guzzlers for more efficient planes back in 1990, over a decade before FedEx got the same religion, according to UPS Director of Reputation Management Lynette McIntire. "We've taken the last 20 years and replaced many of our inefficient aircraft. We started that in 1990. That's why there's such a big gap between our metrics today on the airline side," says McIntire.
How about fleets of vehicles running on alternative fuels? FedEx has touted its work to develop semi-trucks for its own fleets. Those developments have been adopted by numerous other fleets, including those of UPS. Take that, Big Brown. Well, not so fast, FedEx. "They'll talk about their alternative fuel fleet. But we've got 10 times the number of alternative fuel vehicles in use than they do. We've got biodiesel, liquid natural gas, compressed natural gas, propane -- you name it," says McIntire.
Well, surely the fact that FedEx owns its own long-haul trucking fleet and has one of the most sophisticated hub-and-spoke package routing systems in the business counts for something, right? And FedEx has extremely advanced routing software to ensure its drivers travel as few miles as possible. No doubt, but UPS claims improvements in its routing software -- which dramatically reduced the number of left-hand turns on all UPS routes -- have avoided 100 million extra driving miles since 2003.
And, says McIntire, UPS now uses rail transit for packages that don't need high-speed delivery and are fine to arrive in three days or more. Rail is, of course, far more eco-friendly than either planes or trucks. I'd love to hear back from FedEx on this one as I'm sure they'd have some interesting things to say in reply. Also, all of this posturing could represent a bit of green-washing. Recent research into the topic has found that the majority of companies touting green qualities for their products were not being entirely honest, as this Time magazine article explains.
Then again, it's hard to lie about things like jet plane CO2 emissions which can be tracked by looking at fleet composition and corresponding likely fuel efficiencies. Regardless, a marketing war over which company is doing a better job of saving the environment can only be viewed as a good thing in a world that is getting hotter and hotter over time.
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Reader Comments (Page 1 of 1)
9-30-2009 @ 8:46AM
aerkokevin said...
Okay! UPS wins the greener than Thou award. Now try delivering the packages without damage or delays.
UPS service is lousy, lost our shipments then weeks later returned damaged to us and blamed the packages for the damage. We boxed or products the same way for thirty years. FedEx never arrives late or damaged, haven't had a lost package since switching th FedEx in 1999.
I dislike the Brown Truck (not supposed to sat "hate ")
Was bummed when Nascar Favorite Dale Jarrett started driving the Ugly UPS car.
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9-30-2009 @ 9:01AM
Ted said...
I applaud UPS for the investment in more fuel efficient cargo jets, but seriously doubt it had anything to do with "going green". They did it to save money on fuel. It should have given them quite a price edge over FedEx during the last few years. It's too bad they didn't pass that savings on to the customer.
Last year, I needed to ship a 12-pack cooler of water samples overnight from Cedar Park, Texas to a laboratory in Houston. The distance is about 200 miles, so it could have been sent by truck. The local UPS Store wanted $42 to ship it.
I drove 10 miles down the road to a FedEx depot and got it shipped for $8.75.
The use of alternative fuels may be good for reducing crude oil consumption, but how do they compare for CO2 emmissions? With the exception of hydrogen fuel cells and electricity produced solely from wind generators or hydroelectric plants, they all still produce CO2.
Besides, all the methane and propane fuels currently in use are from non-renewable underground resources.
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10-07-2009 @ 3:01PM
david said...
would of been cheaper to just have the ups truck pick it up, the ups store is usually owned or leased by a private owner so they charge you extra to service the package that extra money goes to the store pretty much
9-30-2009 @ 9:59AM
John said...
In our area UPS is king. UPS has never missed a delivery to us in the past 14 years. On the other hand the FedEx driver will not even conme to our area if there is only one package to deliver. Instead they will claim no one was home. Bullpuckey. We are retired and always home. And since we were 'not home' they say there will be no refund for non-delivery.
Don't bother sending a complaint email to FedEx. You will get an automatic email response saying that they will get back to you in 24 hours. Don't hold your breathe. They never will.
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9-30-2009 @ 10:50AM
George Tattersley said...
UPS DOES NOTHING FOR NOTHING! THEY WASTE MILLIONS OF $$$$$$$ EVERY YEAR JUST TRYING TO FIND THEIR OWN PEOPLE DOING SOMETHING WRONG! I WAS FIRED ALMOST 4 YEARS AGO BECAUSE MY CENTER MANAGER DIDN'T LIKE SOMETHING ABOUT ME! THEY CLAIMED I WAS DISHONEST ALTHOUGH ALL OF MY CUSTOMERS WERE MORE THAN SATISFIED WITH THE SERVICE I PROVIDED! I WAS TOLD THAT PART OF MY ROUTE WAS ONLY TEMPORARY (PHILA ART MUSEUM) BUT LO & BEHOLD MY SERVICE TO THEM WAS USED AGAINST ME TO FIRE ME! THEY CLAIM THAT THEY ARE ALL ABOUT CUSTOMER SERVICE WHICH IS A HUGE LIE! AND THEN WHEN I TRIED TO SUE FOR UNJUST DISCHARGE NO ATTORNEY WOULD TOUCH THE CASE WITHOUT A HUGE RETAINER! AND THE UNION WAS NO HELP AT ALL!! AT ARBITRATION ALL THEY SAID IN MY DEFENSE WAS "HE DID SOMETHING STUPID"!
IF THEY AREN'T GOING TO MAKE MONEY FROM IT, THEY AINT GONNA DO IT!!! THE ONLY "GREEN" THEY CARE ABOUT IS THE ALMIGHTY DOLLAR!!!
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10-05-2009 @ 9:39AM
Deborah Willig said...
In contrast to the claim in this blog, FedEx shared a significant amount of information with Mr. Salkever within hours of his original inquiry about FedEx sustainability efforts compared to our competitors, and based on a verbal discussion expected to receive additional questions via email. In our initial response, we made sure Mr. Salkever was aware of an earlier blog post where we address our competitor’s claims. Next, we pointed Mr. Salkever to our most recent CSR data available in the FedEx Global Citizenship Report to establish baseline awareness. Finally we highlighted a number of specific programs that we had hoped Mr. Salkever would include in his piece and which we feel demonstrate significant leadership in the area of sustainability:
Vehicles
-FedEx has more than 1,750 alternative fuel vehicles/equipment.
-FedEx Express teamed with the Environmental Defense Fund and in 2004 placed the first commercially available hybrid delivery truck into service. This July it was announced that FedEx expanded its hybrid-electric fleet by 50 percent with a groundbreaking conversion program.
-In addition, we also have a goal to improve vehicle fuel efficiency by 20% by 2020. We are currently at 14% improvement from our baseline. We are not aware that any other transportation companies have set a goal of this type.
-FedEx was the only transportation company to call for and work for legislation establishing fuel efficiency standards for commercial vehicles. This legislation was passed in late 2007. Even though FedEx requested additional support from other transportation fleets, none was forthcoming.
Energy
-FedEx has over 5 megawatts of solar power in operation or development – much more than any other transportation company.
o FedEx Ground is installing the nation’s largest rooftop solar-electric system at its distribution hub in Woodbridge, N.J. The solar power project is the fifth solar power project for FedEx, joining projects that include:
o A solar-electric system at the FedEx Express regional hub in Oakland, which when initially installed was California’s largest such rooftop system;
o A state-of-the-art solar-electric facility in Cologne, Germany. Slated for completion in 2010; and
o FedEx Freight also operates two solar-electric systems at facilities in Whittier and Fontana, California.
- FedEx Office is the largest user of renewable energy on the EPA’s Green Power Partnership Top 20 Printer’s List. In addition, FedEx Office was also a founding member of the Green Power Market Development Group, which works to help America establish infrastructure and ignite demand for renewable energy.
Reputation
-We also alerted Mr. Salkever that FedEx was included in the Dow Jones Sustainability Index.
Aircraft
-Both companies have set a goal to reduce airline emissions by 20% by 2020, not 40% as reported by Mr. Salkever. However, FedEx established its CO2 reduction goal for our aviation operations eleven months ago. This was a first ever reduction goal by a transportation company within the U.S. Our competitor adopted our exact goal just a few weeks ago.
-The aviation emissions’ numbers that we published last year were internally comparative in nature, and have been erroneously used and reported as a consequence. They reflected only a portion of miles flown, and were used by us to measure progress towards our goal. Nor were they intended as a comparison to other companies. However, we are currently revising the numbers using the total ATMs that we publicly report, and that indicates we are below 1.5 pounds/ATM. In addition, we are making a substantial replacement of aircraft, currently underway, that will reduce our emissions even further. And, as we detailed in our report last year, we have more than 30 teams that work on reducing fuel usage and emissions from our aviation operations.
Not only did Mr. Salkever fail to acknowledge or incorporate these facts, but his post includes a number of inaccuracies:
-FedEx’s hybrid program does not focus on “semi-trucks.” FedEx has worked closely with the Environmental Defense Fund to create a new standard in deliver vans, which is the most popular vehicle in the FedEx fleet. This work resulted in EDF declaring last year that, “FedEx leadership has helped to make hybrid truck technology a reality” and earned FedEx a number of industry awards. As FedEx leadership has noted on numerous occasion and was covered by The Wall Street Journal, we believe that investments in electric-based vehicles will reap the greatest benefit for the company and the industry in the long-run.
-Finally, it is inaccurate to claim that FedEx has engaged in a “marketing war” with UPS. Again, as we noted to Marc Gunther, “FedEx absolutely competes for superior service and reliability in package shipping. When it comes to the environment, we believe that a rising tide lifts all ships and want the tide to be environmental innovation.
We’ve posted this information in the comments section so that DailyFinance readers may review and formulate their own opinions.
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