FedEx committing to reach carbon-neutral operations by 2040, electrifying delivery vans

FedEx is committing to reach carbon-neutral operations by 2040, aided in part by replacing its entire pickup and delivery fleet with zero-emission electric vehicles, the Memphis-based company announced Wednesday.

FedEx, which uses more than 200,000 motorized vehicles and 680 cargo aircraft to fuel its global delivery network, said in a news release it would put in an initial investment of more than $2 billion to help achieve the goal.

“We have a responsibility to take bold action in addressing climate challenges,” said Chairman and CEO Fred Smith in a statement. “This goal builds on our longstanding commitment to sustainability throughout our operations, while at the same time investing in long-term, transformational solutions for FedEx and our entire industry.”

The $2 billion would go toward vehicle electrification, sustainable energy and carbon sequestration. Carbon sequestration is the process of capturing and storing atmospheric carbon dioxide, per the U.S. Geological Survey.

The initial investment also includes $100 million to help Yale University establish the Yale Center for Natural Carbon Capture. According to FedEx, the center will be “accelerating research into methods of carbon sequestration at scale, with an initial focus on helping to offset greenhouse gas emissions equivalent to current airline emissions.”

FedEx joins other giants, details carbon-neutral plans

FedEx’s announcement comes as more American corporate giants are committing to reducing their environmental footprint and fighting climate change. Both Amazon and General Motors — specifically the automaker’s global products and plants — have pledged to be carbon neutral by 2040.

Since 2009, FedEx said it has seen about a 40% reduction in CO2 emissions intensity despite a surge in package volume.

“While we’ve made great strides in reducing our environmental impact, we have to do more,” said FedEx Chief Sustainability Officer Mitch Jackson in a statement. “The long-term health of our industry is directly linked to the health of the planet, but this effort is about more than the bottom line — it’s the right thing to do.”

As of fiscal year 2019, FedEx’s total greenhouse gas emissions were higher than the previous two years at 19.5 million metric tons, according to its 2020 Global Citizenship Report. FedEx avoided 3.14 million metric tons of emissions that year.

To help reach carbon-neutral operations, FedEx will fully replace its existing pickup and delivery fleet with electric vehicles through phased programs. According to FedEx, 50% of FedEx Express’ purchases of these vehicles will be electric by 2025, rising to 100% of all purchases by 2030.

FedEx Chief Marketing Officer Brie Carere said the company's carbon-neutral commitment includes its FedEx Ground operations, which rely on contracted independent service providers to transport and deliver packages.

"That is absolutely part of our commitment, and we do believe that the primary means from a pickup and delivery perspective will be the electrification of the FedEx Ground vehicles operated by the contractors," she said in a virtual roundtable with other FedEx executives Wednesday.

Electric vehicles are a small, but growing, part of FedEx's fleet. The company had 2,944 electric vehicles in service as of fiscal 2019.

FedEx also said it would make its facilities more sustainable, work with customers on end-to-end supply chain sustainability and continue investing in alternative fuel to reduce emissions.

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Jet fuel big source of FedEx emissions

Carere said the company already has a clear path toward running an electric pickup and delivery fleet. The carbon sequestration research spurred from the Yale investment will help reduce the footprint FedEx’s emissions-heavy air cargo operations in particular.

The company houses the world’s largest cargo airline in FedEx Express. Jet fuel made up more than 75% of FedEx’s direct energy consumption in fiscal year 2019, the rest going toward vehicle fuel and facility use, per the company’s Global Citizenship Report.

“There is no silver bullet to get to carbon neutrality for aviation,” Carere said. “…There simply isn’t a single solution that will get us there faster.”

Natural processes like photosynthesis and mineral weathering absorb and store carbon. Expanding the capacities of these processes provides “enormous potential for reducing atmospheric carbon,” said a news release from Yale University, which Smith graduated from in 1966.

“Developing natural solutions for carbon sequestration is an ambitious but realistic strategy,” said Indy Burke, dean of the Yale School of the Environment. “It will have an immense impact on our ability to reduce atmospheric carbon dioxide and mitigate the effects of global warming. Earth’s natural systems are ripe with opportunities, and the Center for Natural Carbon Capture will enable research that transforms these opportunities into real-world, applicable solutions.”

FedEx disclosed in that report its aircraft emissions intensity had been reduced by 24% from a 2005 baseline. This was short of the company’s 30% reduction goal, which it blamed on “retained aircraft that had been scheduled for retirement.” FedEx noted that modernizing its aircraft fleet will help reduce emissions.

“Continued higher e-commerce and other shipping volumes, and the need to maintain older aircraft marked for retirement while we await production of more efficient replacements, have presented ongoing challenges toward our goal,” the company said in the report.

Current company initiatives to address aircraft emissions include the FedEx Fuel Sense and Aircraft Modernization programs, which it says saved a combined 1.43 billion gallons of jet fuel and avoided over 13.5 million metric tons of CO2 emissions since 2012.

Jackson said in the roundtable that replacing FedEx Express’ aging aircraft will give the fleet better fuel efficiency and greater range, which allows for improved customer pickup times.

“That ability is there where it’s not just about the environmental issues, but it’s about the components that Brie talked about with respect to customer solutions as well,” 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.