Inside FedEx's emissions-slashing strategy

Inside FedEx's emissions-slashing strategy

How did one of the world's biggest air freight companies slash its aircraft emissions nearly 14 percent over the last seven years?

By using a twist on the old environmentalist's maxim of "reduce, reuse, recyle."

Instead, FedEx (NYSE: FDX) created a more customized mantra: "reduce, replace, revolutionize." In other words: reduce the use of old, inefficient technology; replace vehicles that are outmoded or not tailored to delivery needs; and plan for the future of new fuel technologies and other innovations.

“We’re encouraged by the speed with which we made the progress,” said Mitch Jackson, FedEx’s vice president for environmental affairs and sustainability, in an interview with GreenBiz. “We have been constantly on the lookout for those solutions that make sense for the future. There’s not a single solution, there’s a series of solutions.”

He was referring not just to the reduction in aircraft emissions, which allows FedEx to raise its emission reduction goals from a planned 20 percent to 30 percent by 2020, but also to the rest of achievements outlined in the company's fourth annual Global Citizenship Report. The shipping giant says it has not only achieved several major sustainability goals but has surpassed its targets. Some highlights:

  • The company increased its Fedex Express vehicle fleet fuel efficiency by 16.6 percent over the past seven years -- putting it well on the way to reaching its 2020 fleet goal of 20 percent.
  • It recycled 6.4 million more pounds of the waste generated at FedEx facilities in FY 2011, compared to a year earlier.
  • Its international carbon neutral envelope shipping program, started this year at no additional cost to customers, is now being used on more than 200 million envelope shipments each year.

Jackson pointed to the sustainability advances made by FedEx aviation, done in part by taking older and less efficient aircraft out of service and substituting them with new aircraft like the freighter version of the Boeing 777.

“That allows us to fly to and from Asia direct without having to make stopovers beforehand,” he said. “It’s really about integrating sustainability into business, because in this particular case we’re reducing our emissions, as compared to the older aircraft that we were using. We’re [also] giving customers in Asia a two-hour later cutoff for package drop-off, for coming back to the States. So they have a longer window for package drop-off with the same services than they had before -- but we’re reducing emissions at the same time. So it’s really a win-win. “

FedEx also has more than 30 different programs designed to reduce aircraft fuel consumption and emissions -- through efforts like single engine taxiing on runways, use of more fuel-efficient continuous descent approaches during landings and the reduction of auxiliary power units (APUs) used by aircraft when they’re on the ground.

Photo of electric-powered FedEx truck by Daryl Lang via Shutterstock.

And on the ground, FedEx has been able to improve its vehicular fuel efficiency through a three-pronged “reduce, replace, revolutionize” approach. Reduce, said Jackson, means reducing the number of vehicles the company needs to carry freight using route optimization. Replace is ensuring vehicles are used on the routes best suited for them, to maximize their fuel efficiency.

“For longer-mileage routes we [use] smaller, much more fuel efficient vehicles … because they’re not making the high density of stops per mile,” he said. “For urban deliveries … where we might be making lots of stops in a very short distance, we use a higher-volume truck that has lower fuel economy itself. [R]eplacing those vehicles and putting the right vehicle into the right route application saves fuel.”

Jackson said the third component, revolutionize, is about planning for the future -- developing hybrid and electric vehicles while preparing for new environmentally friendly technologies.  For example, FedEx is looking at hydraulic hybrids -- and at new liquid natural gas (LNG) engines that have greater range and better performance for long-haul trucking. It’s also incorporated more than 100 new pickup and delivery vehicles that use a lightweight composite body for better fuel performance.

FedEx also plans to have 30 percent of its jet fuel come from alternative and bio-fuel sources by 2030.

But achieving these goals, according to Jackson, means more than issuing company reports.  “The report is really what you do after you’ve done all the other stuff,” he said. With the level of demand on resources by society now, we have to find new ways to do what we have been doing in the past. So sustainability in it that respect is a societal imperative.  It’s about change. We’ve got to continue to focus on addressing the challenges that we have today, but not use the solutions that we were using yesterday.”