FEDEX GOING GREEN
CEO details company’s carbon neutral plans to lawmakers
Fedex Chairman and CEO Fred Smith detailed the company’s plan to be carbon neutral by 2040 to U.S. lawmakers Wednesday, saying both business and pollution concerns played a part in the decision.
“The health of our planet is at stake,” Smith said before the U.S. House Committee on Transportation and Infrastructure. “Fedex has a long history of keeping sustainability at the center of our business, and we know the future of our operations is tied to the future of our environment.”
The hearing, which Smith and other witnesses attended virtually, focused on how the private sector is acting to develop and implement climate change solutions.
Earlier this month, Fedex announced an initial investment of more than $2 billion to reach carbon-neutral operations by 2040. The company says several initiatives will help it achieve this goal, including making its pickup and delivery fleet all-electric and investing in carbon capture research.
About three-quarters of Fedex’s 200,000 vehicles in operation are pickup and delivery vehicles.
Economics are on electric pickup and delivery vehicles’ side, Smith said, noting that operating costs will be about 44% of what vehicles powered by an internal combustion
engine would have produced.
“Our ambitious agenda at Fedex shows that businesses can and will lead in the effort to create a sustainable future for us all,” Smith said. “However, we cannot do this alone.”
On the regulatory side, Smith flagged “dated federal equipment standards” on trucks as an impediment to climate solutions. He advocated for a 5-foot increase to 28-foot twin trailers to reduce the trips and miles needed to move goods by truck.
“This increased capacity in our nation’s transportation system could reduce annual fuel use by 225 million gallons per year and reduce carbon emissions by 3 million tons per year, all at no cost to road safety or taxpayers,” he said.
Americans for Modern Transportation, a group advocating for the change which Fedex is part of, says 20 states now allow 33-foot twin trailers. Fedex has run twin 33’s on a regular basis on the Florida Turnpike, the coalition’s executive director told Insidesources in May.
An opposition group, the Coalition Against Bigger Trucks, argues that increasing truck size would worsen highway safety, infrastructure and increase emissions. Smith said the increase would not change the current weight limit and would lead to fewer trucks on the road.
Smith: Customers want environmental responsibility
Fedex joins a growing list of corporate giants — including Amazon and General Motors — that have made carbon-neutral pledges. Fedex’s customers increasingly want to do business with “environmentally responsible” companies, Smith said.
Fedex’s massive fleet of delivery vehicles and cargo airplanes require significant amounts of energy. The company’s total greenhouse gas emissions in fiscal year 2019 were 19.5 million metric tons, higher than the previous two years. Smith said Fedex avoided more than 3 million metric tons of CO2 emissions that year thanks to fuel and energy savings initiatives.
Seventy-five percent of Fedex’s direct energy consumption was tied to jet fuel in fiscal 2019.
Sustainable aircraft fuels are “the most intractable problem,” Smith said, which is why Fedex is investing in scalable carbon capture and storage methodologies. Fedex is also replacing its aging aircraft with more fuel-efficient planes.
With climate change being a global issue, Smith said tariffs on imports from countries that haven’t improved their carbon footprints would incentivize them to take responsibility. The Biden administration is considering this kind of action, as the U.S. Trade Representative’s office released a report earlier this month saying it will explore ways to address emissions in global trade.
“As appropriate, and consistent with domestic approaches to reduce U.S. greenhouse gas emissions, this includes consideration of carbon border adjustments,” it said.
Pilot Flying J CEO: Our industry is best for EV charging stations
Other high-ranking corporate executives at companies including Proterra, Pacific Gas and Electric Corporation and Knoxville-based Pilot Flying J also spoke at the hearing.
Pilot Flying J CEO Shameek Konar’s remarks focused on “the most efficient and economical way” to expand the availability of electric vehicle charging stations in the U.S., an area of interest for President Joe Biden’s administration.
Konar said the American power grid’s generation, transmission and distribution networks will need to expand to meet rising charging station demand. Drivers also need to be assured they can refuel their electric vehicles reliably, with multiple options that compete on price, speed and quality of service, he added.
“As it relates to reducing range anxiety, one of the primary impediments to EV adoption is (not having) a nationwide network of fast charging stations,” he said.
Fuel retailers like Pilot Flying J “are best suited” to own and operate charging stations and provide that energy to customers in a manner they’re accustomed to today, Konar said. He warned that establishing EV charging stations at rest areas would discourage retailers from investing in charging infrastructure of their own.
“It will also signal to prospective drivers that when they recharge, they will not have access to all the amenities of the security they come to expect from this sector,” he said.
Max Garland covers Fedex, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-529-2651 and on Twitter @Maxgarlandtypes.