UPS to Invest $70 Million in Propane for U.S. Fleet

United Parcel Service on Wednesday said it would invest $70 million in propane infrastructure for its U.S. delivery fleet, including 1,000 trucks powered by the fuel.

The package-delivery company also said it would install an initial 50 fueling stations at UPS locations in the U.S.

"Propane meets those criteria as a clean-burning fuel that lowers operating costs and is readily accessible, especially on rural routes in the United States," UPS Chief Operating Officer David Abney said. "States that attract this type of investment with tax incentives and grants will factor into the UPS deployment strategy."

The company said the propane fleet--whose vehicles can travel as many as 200 miles on a tank of propane--will replace vehicles fueled by gasoline and diesel in rural Louisiana and Oklahoma, with other states pending. UPS said it already operates about 900 propane vehicles in Canada.

UPS expects propane operations to begin by the middle of this year, with completion targeted early next year.

The company also announced its collaboration with the Propane Education & Research Council, a nonprofit organization that has worked with equipment makers to get certifications from the California Air Resources Board and the U.S. Environmental Protection Agency.

The move comes as UPS looks to improve its operations and delivery performance, planning to boost modernization spending on equipment and facilities this year by about $500 million to a total of approximately $2.5 billion. The company's fourth-quarter results were pressured by delays during the holiday season.

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