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FedEx Invests $2 Billion to Deliver Environmental Performance: Here’s How

(Credit: Pixabay)

FedEx aims to be carbon neutral by 2040 — something that requires an investment of $2 billion into everything from electric vehicles to energy-efficient buildings to deploying onsite green energy. 

“FedEx is active in over 220 countries and territories around the globe with more than 5,000 operating facilities, including air and ground hubs, local stations, freight service centers, and retail sites. Maintaining efficient operations – emphasizing efficiency in energy use, facility design and construction, paper and other materials used, and waste management – is, thus, a top priority … FedEx is committed to promoting sustainability across its supply chain,” says SustainCase. 

The most visible step FedEx is taking is to replace all of its delivery trucks with those that run electricity. It also plans to invest in alternative fuels and reduce its aircraft fuel usage while powering more of its operations with renewable energy. And customers will be able to use more sustainable packaging. 

Indeed, creating energy efficiencies saves money. Its use of renewable energy does the same, while it also reduces carbon emissions. FedEx has its eye not just on its ground transport but also on its jets; it wants to increase the supply of alternative jet fuel by 2030 to 30%. 

What are the practical steps it is taking?

To increase its use of renewable energy, it is entering into power purchase agreements — long-term contracts with wind and solar developers to buy their output at a fixed price. It has also installed onsite solar systems at some sites.

FedEx Ground also takes advantage of programs with utility vendors to complete lighting retrofit/building energy-efficiency projects through negotiated utility pricing and no upfront capital investment, says SustainablePittsburgh. The projects reduce energy use, resulting in a more effective load profile for the utility system and reduced energy costs for FedEx Ground. 

For example, it upgraded 28 facilities in 2017. Collectively, all facilities upgraded helped FedEx save 220,390,449 kWh of electricity and avoid, in FY17, 164,018 metric tons of CO2e emissions, says SustainCase. 

Since 2007, lighting retrofits at 1,085 facilities have saved more than 1 billion kWh of electricity, it adds. And FedEx Express completed two more LEED-certified facilities in the U.S., bringing the total number to 14 and covering an area of 218,698 square meters.

And waste reduction and recycling is another focal point — one that requires a lot of data collection. FedEx Ground synthesizes information from all its facilities, enabling it to make strategic decisions.

“We recently announced a bold new goal to achieve carbon-neutral global operations by 2040,” says Fred Smith, chief executive of FedEx in its 2020 Environmental, Social, and Governance Report. “To get there, we will focus on three key areas: vehicle electrification, sustainable energy, and natural carbon sequestration. 

“In pursuit of truly sustainable air operations, we’ve pledged substantial support to help establish the Yale Center for Natural Carbon Capture,” he adds. “This new center will accelerate research into methods of carbon sequestration at scale, with an initial focus on helping to offset greenhouse gas emissions equivalent to current airline emissions.” 

How is it doing? 

Its motto is to reduce, replace, or revolutionize its aviation and vehicle fleet and its facilities and materials. It is using fewer fossil fuels, it says. It notes that its road to carbon-neutrality entails a 30% decrease in aviation carbon intensity, a 50% improvement in fuel efficiency in its ground transportation, and replacing all of its delivery vehicles with electric vehicles. 

“Due to the vigilance and leadership of our team members, we still saw an improvement (in 2020) in our efficiency, saving more than 118 million gallons of jet fuel and avoiding more than 1 million metric tons of CO2 equivalents,” says its report. It has also cut its aircraft emissions by 27% since 2005. 

Also, in 2020, it bought 18 new aircraft and retired eight. It has plans to acquire another 38 aircraft by 2024. To that end, it is investing in alternative jet fuels. For example, it is investing in a biofuel refinery by Red Rock Biofuels, which will supply low-carbon renewable jet fuel. It will convert wood waste from the logging industry.

FedEx Express aims to increase vehicle fuel efficiency by 50% from a 2005 baseline by 2025. And it appears that it will blow right through that. As of 2020, it improved fuel efficiency by nearly 45%. Also, half of its vehicle purchases by 2025 will be electric and all of them will be by 2030. 

“FedEx Express is continuing its acquisition of zero-emission vehicles with our agreement to purchase 500 electric vehicles from General Motors’ BrightDrop, and we remain committed to our goal for a zero-emission vehicle future for our parcel (pickup and delivery) fleet,” the report says. 

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