United Parcel Service Inc. announced on Wednesday it will spend $70 million on bringing in 1,000 propane trucks in order to expand one of the largest alternative-energy fleets in the U.S.
UPS is buying the fleet from Daimler AG's Freightliner Custom Chassis Corp., according to Reuters. The fleet will replace gasoline and diesel trucks in Louisiana and Oklahoma. UPS is also investing in 50 new fueling stations.
Propane is a cheaper fuel and burns cleaner than traditional fuels such as diesel and gasoline, Bloomberg reported. UPS said it plans on expanding the fleet to other states.
UPS currently has a global fleet of 3,150 alternative-fuel and advanced-technology vehicles, according to Bloomberg. These vehicles include electric, hybrid electric and liquefied natural gas and compressed models. The addition of propane trucks will increase the fleet by 32 percent.
UPS Chief Operating Officer David Abney spoke in an interview about the benefits of acquiring propane-fueled trucks for the company.
"Propane is less volatile than gasoline and diesel, it's nontoxic and is a clean-burning fuel, which is what got us very interested," Abney said. "It's really ideal for rural areas and locations where we have smaller fleets."
By working with the Propane Education & Research Council, UPS was able to obtain the regulatory certifications it needed to get the trucks, the Los Angeles Times reported. UPS tested 20 propane-fueled trucks in Georgia last winter, and the company said the trucks will be able to travel over 25 million miles. Roy Willis, chief executive of the Propane Education & Research Council, said this will be a great chance for success for the Atlanta-based company.
"The opportunity to road test new propane vehicles and fueling equipment with one of the most sophisticated fleets in the country is a major milestone for the propane industry, said Willis.
UPS said the capability of the new trucks will replace the use of 3.5 million gallons of diesel and gasoline fuels, Fool reported. The company also said propane has greater price stability and access to supply due to the increase in natural gas production in the U.S.
