UPS to invest $70 million in 1,000 propane autogas vehicles

March 5, 2014 By    

The propane industry’s reputation has been bruised and battered in the public’s eye this winter due to well-documented supply and distribution challenges throughout much of the country.

As industry leaders strategize and prepare for future winters, another development is taking shape at quite possibly the perfect time to help repair its image.

Atlanta-based UPS, one of the most recognized U.S. corporate brands, announced an agreement with Freightliner Custom Chassis Corp. to purchase 1,000 propane-fueled package delivery vans and deploy them initially in California, Louisiana and Oklahoma.

UPS’ announcement March 5 at The Work Truck Show in Indianapolis represents a $68 million investment and its first large-scale movement toward propane in the United States. The company has been running about 900 propane-fueled vehicles worldwide (mostly in Canada) – and about 3,100 globally on alternative fuels – but few domestically on propane.

UPS’ interest in propane autogas has grown following a successful pilot program that it completed in Georgia late last year, says Tucker Perkins, chief business development officer for the Propane Education & Research Council (PERC). The program tested 20 vehicles that covered 173,000 miles and burned 3,400 gallons of propane.

Perkins calls the test “nearly flawless,” and it motivated UPS to continue talks with Freightliner on a larger purchase. The new vehicles will feature a Freightliner chassis with a General Motors 6.0-liter V8 LC8 engine and Allison automatic transmission. The engine uses a CleanFuel USA liquid propane injection fuel system and is sold and modified through Powertrain Integration.

Talks with UPS initially began about two years ago and have intensified over the last 12 months, Perkins says.

UPS typifies the perfect fleet for propane autogas, Perkins says, because it has a good density of vehicles at one location and employs its own maintenance staff. Freightliner is also prepared to handle warranty work.

“This is a tremendous validation of what we’ve been saying for years – propane autogas is quite possibly the most cost-efficient alternative fuel that exists today,” Perkins says.

Industry investment
PERC is contributing $780,000 (of $810,000 total for UPS) to help the delivery company install refueling infrastructure at 30 locations in the three states, with UPS funding station development at 10 additional sites, Perkins says. Part of the council’s investment in infrastructure involves testing a new refueling nozzle’s low-emissions characteristics and ease of use.

The project funding issue was not without dissension at PERC’s advisory committee level, Perkins detailed during the council’s February conference call. Some members opposed investing in the infrastructure, while others were concerned about a prearranged supply contract. Perkins says UPS plans to bid supply individually by location.

“We feel strongly this is the best opportunity for marketers in general to have easy access and be on a level playing field for gas supply,” says Perkins, noting how PERC can work with state executives to facilitate UPS location information to propane marketers.

UPS project partners should have much of the work and vehicle deployments ready by Oct. 1, Perkins says. It is worth noting the same partners have worked to overcome “nuisance problems” on a well-documented propane-fueled bobtail and bus project, forcing them to push back production deadlines. We hope this project finds smoother ground.

The winter of 2013-14 and the accompanying supply constraints also have left some doubts as to whether the industry can reliably support new customers. The other view is creating enough year-round demand, not just in the winter, will only help the industry sustain itself over the long haul.

“This is clearly part of the solution, because it’s base-load customers like UPS that are going to create enough demand to allow us all to make the investments we need in infrastructure,” Perkins says.

About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at or 216-706-3748.

1 Comment on "UPS to invest $70 million in 1,000 propane autogas vehicles"

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  1. Tony Grubb says:

    173,000 miles on 3400 gallons= 50.8 mpg.WOW!!!!!
    Sign me up, I have got 2 school buses ordered with propane, but I was not expecting that kind of economy. Won’t my board of ed. be happy with me!!!!