Vendor Newsmaker Q&A Mike Casteel

May 27, 2015
UPS has one of the largest private fleets of compressed natural gas vehicles in the U.S., with more than 1,100 CNG package delivery vehicles on the road. The company recently announced that it is increasing its CNG fleet by 1,400 units, which is a 30 percent increase of UPS’ entire fleet of 5,088 alternative fuel and advanced technology vehicles.

UPS has one of the largest private fleets of compressed natural gas vehicles in the U.S., with more than 1,100 CNG package delivery vehicles on the road. The company recently announced that it is increasing its CNG fleet by 1,400 units, which is a 30 percent increase of UPS’ entire fleet of 5,088 alternative fuel and advanced technology vehicles. In addition to the U.S., UPS operates CNG vehicles in Germany, Chile, Thailand, the Netherlands and Brazil.

When the deployments are completed, UPS anticipates that its alternative fuel and advanced technology fleet will log more than 350 million miles per year, supporting the company’s goal of driving a billion miles with this fleet by the end of 2017. The alternative-powered fleet will displace about 54 million gallons of conventional diesel and gasoline annually while reducing exhaust emissions. According to the U.S. Department of Energy, using natural gas instead of gasoline cuts greenhouse gas emissions by 6 percent to 11 percent over the fuel lifecycle.

Mike Casteel, the company’s director of fleet procurement, is responsible for all fleet-related purchasing activities in the U.S. and Canada. He has a leading role in developing the financial strategies involved in the deployment of the UPS alternative fuel fleet, including the large-scale natural gas and propane fleet projects currently underway. He recently answered a series of questions posed by Aftermarket Business World:

Q: How did you decide on CNG versus the existing diesels, or propane, or electric vehicles?

A: For this 1,400-vehicle deployment, we selected UPS locations with the appropriate fleet size and miles driven that result in high fuel use. While the environmental benefits of natural gas are well known, the financial benefits of CNG are generated through fuel cost savings verses traditional diesel or gasoline. The more fuel that is required, the better able we are to recover the infrastructure and vehicle investment costs. It’s also important that sufficient natural gas pressure is available from the utility to the UPS sites in order to deliver the high volume of fuel to the stations. These locations all meet the combined requirements that are necessary to deploy a CNG fleet on this scale.

Q: Do you also have electric vehicles in your fleet?

A: Yes. UPS’ first electric vehicle was put into service in 1934. More than 11 percent of the 5,088 vehicles in our alternative fuel and advanced technology fleet is composed of electric and hybrid electric vehicles.

Q: How does the filling process work? Is the gas pumped in or are tanks exchanged?

A: The CNG stations are connected directly to the natural gas pipeline distribution network. The gas flows into the station compressors where it is pressurized before being pumped into the vehicle tanks.

Q: Are your filling facilities available for non-UPS employees – the motoring public – to use?

A: Most of our CNG stations are private, but we do have a couple of facilities in California that are set up to allow for public fueling.

Q: Have your drivers been experiencing “range anxiety” when behind the wheel of a CNG vehicle?

A: UPS’ vehicles are designed with fuel capacity to operate on the routes for which they are intended. Since our vehicles go out and return home to the same location each day, there is no reason for range anxiety.

Q: How does using CNG make your package delivery services more efficient?

A: UPS began extensively using CNG in 1989 to assess its benefits and viability as an alternative fuel. While CNG doesn’t reduce the amount of time it takes to make deliveries, using an alternative fuel and advanced technology fleet reduces dependence on conventional fuel and provides environmental and economic advantages.

Q: Because CNG burns cleaner, have you been seeing reduced engine and overall vehicle maintenance costs?

A: Up to this point, we do not see a measureable long-term difference between vehicles fueled with natural gas and those that are fueled with diesel or gasoline.

Q: Are you converting existing engines to CNG or purchasing OEM units? If converting, is this being done in-house?

A: All of the CNG vehicles purchased to this point are new from the OEM.

Q: What changes have you made in training and equipment at your vehicle maintenance facilities to accommodate CNG?

A: Deploying natural gas vehicles requires modifications to maintenance shops due to the natural gas properties and how they differ from gasoline or diesel fuel. These vehicles also require different training for the unique systems, but it is not unlike incorporating other new automotive technologies. They all require continuous education and training in order to stay current.

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