FedEx Finds Unexpected Benefits from New Fuel Technologies: Q&A with Mitch Jackson

by | Apr 9, 2018

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Each business day, FedEx serves over 220 countries and territories with more than 600 aircraft as well as more than 190,000 on-road and off-road vehicles, which includes around 132,000 company-owned vehicles. The shipping company, which has $60 billion-plus in revenue, operates on an immense scale.

Over the past decade, FedEx reports saving more than 158 million gallons of vehicle fuel. This has been achieved by reducing usage through efficiencies, replacing vehicles with more efficient models, and increasing the company’s use of electric vehicles, fuel cells, natural gas, hybrids, and clean truck technologies.

“We want to reduce or eliminate impacts from our operations or activities. That’s first and foremost,” says Mitch Jackson, vice president of environmental affairs and chief sustainability officer at FedEx. He oversees sustainability strategy at the corporate level for the company’s enterprises, including the large express, freight, and ground divisions.

Jackson will be speaking about the company’s approach to sustainability at the Environmental Leader & Energy Manager Conference in Denver next month. Recently we caught up with him to find out how FedEx fosters new technologies for benefits that go beyond fuel savings.

What is FedEx’s approach to sustainability?

Our philosophy is practical sustainability — strategic and transformational stewardship that adds tangible value to our organization and other stakeholders. The strategy we’re implementing we refer to as ‘reduce, replace, revolutionize.’

We typically focus on vehicles, aircraft, aviation facilities, and paper. Aviation is our biggest environmental impact. We have a program called Fuel Sense to minimize the amount of fuel and energy used in our aviation operations. This includes over 50 initiatives we undertake each day we’re flying.

Those operations are minimizing the number of engines we use for taxi-in and taxi-out at airports. It means not using auxiliary power on the aircraft to the largest extent possible and connecting to ground power as soon as we can when we get to gates.

It’s also about the amount of optional fuel planned for every flight. You burn approximately 4% of the fuel you carry just by carrying it. In fiscal year 2016, the most recent year we put numbers out, we saved 81 million gallons of fuel from Fuel Sense initiatives.

How does ‘replace’ fit in?

For a number of years, we’ve had a fleet modernization program putting more fuel-efficient, longer-range, higher-payload aircraft into the operation. That gives us cost savings, reduced emissions, and better customer service. In FY16, fleet modernization saved almost 72 million gallons of fuel and avoided 1.5 billion pounds of CO2 emissions.

When we started replacing some of our older wide-body aircraft with the Boeing 777, the longer range means we don’t have to divert for fueling on some trips from Asia. That allowed a two-hour later pickup or drop-off for customers in Asia for shipments coming to the US. So by changing that aircraft, not only did we reduce emissions, save fuel, and reduce costs, but we also offer better customer service.

And what about ‘revolutionize’ for aircraft?

One of our goals is to obtain 30% of jet fuel from alternative sources by 2030. We have been working with select companies on alternative sources of fuel so we can start using it. One slated to come online is with a company called Red Rock Biofuels to provide us with several million gallons of fuel annually for a period of years.

This fuel comes from forest detritus — wood stock that has fallen onto forest floors, cleared away, and used as biomass to make fuel with lower carbon inputs. Clearing that out also helps minimize the forest fire risk in the Pacific Northwest.

One of the challenges is getting the refinery capacity up to provide the fuels so we contracted with Red Rock to buy half of the fuel they would produce from this upcoming refining operation. And we continue to look for other alternative sources for jet fuel as well.

Are there other aviation technologies related to sustainability that FedEx is evaluating?

We participate in a program with Boeing, the DOE, NASA, and others called ecoDemonstrator. One of our aircraft had advanced technologies put on it to see which ones will work best for the future design of aircraft. The collaborative effort helps optimize technologies, with the hope of bringing them into production for all aircraft. This year we’re working with Boeing to test over 35 technologies, including 100% biofuel, on one of our 777 freighters for the program’s fifth iteration.

We do the same thing with our vehicles — looking to bring new technologies to market, and substitute lower-carbon fuels or eliminate fossil fuels.

FedEx recently placed a reservation for 20 Tesla Semi trucks. What’s the significance of this move?

We’ve actually had electric vehicles in our fleet since 2009. The Teslas would be the first over-the-road vehicles, where they’re traveling long distances. Tesla is talking about 2019 production. We often get in at the incubation stage to help foster technologies and start working toward commercialization.

Is there risk involved with that approach?

This is no different from any other aspect of the business, we’re just bringing in a focus on the environmental and social impacts. We research, test, and look to implement.

With respect to some of these new technologies for vehicles, as they’re being evaluated and tested, we look at performance — does it meet the operational and range requirements of our routes? Does it stand up to the parameters we set for environmental benefit and cost savings? We’re also looking at acquisition costs and whether these assets can be serviced into the future.

What does the future look like?

We’ll continue to focus on where we can make progress on fuel savings, emissions avoidance, and innovations that could be utilized by others. It comes back to practical sustainability. We want to help communities connect to the rest of the world responsibly and resourcefully. Ultimately that’s what it’s about.

Mitch Jackson will be speaking at the Environmental Leader Conference & Energy Manager Summit in Denver May 15 – 17, 2018. His plenary session, Tackling Climate Risk in the Financial Sector, starts at 9:30 am on May 17.

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