Natural Gas – Conversions, Vehicles and Technology

UPS Looks at ROI in Sustainability Purchases

May 22, 2013

The United Parcel Service (UPS) analyzes their return on investment (ROI) with each purchase of an alternative-fuel vehicle. For example, after reviewing ROI, UPS added more than 2,500 alternative fuel and advanced technology vehicles to its fleet.

Enablon Project Manager Tom Hazeldine looked at UPS's alt-fuel purchases and their ability to increase production and reduce material cost purchases by analyzing reduced energy costs (by a specific amount over a certain amount of time), reduced equipment breakdowns, and reduced waste. His tips to analyizing ROI include:

• Understand corporate objectives and value drivers.
• Assess key risks within the context of those objectives and drivers.
• Analyze the initiative you're proposing in terms of how it mitigates those risks. For instance, the purchase of electric vehicles can reduce reliance on oil, thus mitigating risks related to volatile commodity prices, transportation delays and supply chain failure.
• Identify the biggest risk mitigations.
• Quantify the benefits.
• Distill the risks and benefits into easily understood messages.

Additional sustainable purchases by UPS include adding winglets on its fleet of 767s that will save $21 million and 6.5 million gallons of fuel a year, and installing three photovoltaic solar systems on New Jersey facilities that will provide free electricity after seven years.

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