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Going Green Saves Green

Environmental Commitment at FedEx

Larry AdkinsArkansas Trucking AssociationMaintenance and Technology CouncilOctober 14, 2008

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FedEx Corporation

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FedEx LTL Companies

FedEx Freight is a leading U.S. provider of next- and second-day regional, less-than-truckload (LTL) services

FedEx National LTL serves the long-haul LTL sector throughout North America. The long-haul sector is typically defined as LTL pick-up and delivery service completed in three or more days

FedEx Freight Canada provides a seamless shipping solution in and out of Canada in addition to all-points coverage throughout the country with fast transit times and reliability customers expect from FedEx

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Global Supply Chain

The challenging dynamics of supply chain management

• Fast-cycle logistics

• Just-in-time inventory

• Tight capacity and congestion at world ports

• Short supply of ocean vessels

• Skyrocketing fuel prices

• Railway and trucking capacity issues (vehicles /qualified drivers)

• Customs clearance

• International security regulations

• Threat of terrorism

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Global Supply Chain

How do you thrive in this changing environment?

By taking a sustainability-based approach to problem solving and change management.

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Sustainability

What is sustainability?

Sustainability is meeting the economic, environmental and social needs of the present without compromising the ability of future generations to meet their own needs.

Whose needs must be met?

• Customers• Employees• Shareholders • Communities

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Sustainability

• FedEx recognizes that effective environmental management is one of its most important corporate priorities.

• FedEx is committed to the use of cost effective innovations and technologies to minimize atmospheric emissions from its operations and services.

• FedEx strives for efficient use of natural resources to minimize waste generation through efforts that include recycling and pollution reduction.

A Long-Term Environmental Commitment

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Equipment

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Equipment

Supporting GHG Reduction

• Utilize two Hybrid Class 7 Kenworth trucks in California

• EPA SmartWay Transport Partner since 2004

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Equipment

• Uses compressed air from the trailer to inflate any tire that falls below its appropriate pressure

• Every 10 PSI of under-inflation will result in a 1% reduction in MPG

Automatic Air Inflation System for Trailing Equipment

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Equipment

• Used in place of two standard tires.

• Improves roll resistance

• 0.2 MPG improvement per axle

• 3x life of standard tires with same cost (in dolly application)

• OR and FL prohibit use on triples, complicating fleet management.

Wide-Base Tires

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Equipment

• Burning fuel while not moving decreases fuel economy

• Limit idle time through use of idle management system that decreases engine idle times below 3 minutes

• Engine idling policy limits length of time power units may idle while parked

Engine Idling

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Equipment

• Implemented education for drivers on attaining maximum fuel economy

• The driver impacts fuel economy by approximately 30% through speed, acceleration, shifting, and idle management

Driver Education on Fuel Economy

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Equipment

• Assembling multi-vendor research partnership to determine how to remove load on engine due to parasitic devices (e.g. alternator, air conditioning, water pump, etc.)

Parasitic Drag Reduction

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Equipment

• Extensively tested zero-emission hydrogen-powered forklifts.

• Excellent performance, however ROI unsatisfactory due to cost of fuel cell.

Hydrogen Fuel Cell Forklifts

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Facilities

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• Completed installation of solar panels at two California facilities

• Systems will provide up to 54% of facility power needs using renewable sun power

• Reduce CO2 emissions by 610 metric tons per year with positive NPV

Facilities

Solar Power

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• Converted dozens of facilities from Metal Halide to T5 and T8 fluorescent, reducing lighting-related energy consumption by up to 65%

•Improved visibility and safety in the working environment with payback < 2 years

Facilities

Lighting Retrofits – Interior

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• Worked with lighting manufacturer on custom LED load light solution that reduces energy by 92%. Over 4,000 fixtures installed or scheduled.

• Continued program of lighting upgrades at 19 additional centers with $1.3 million capital investment.

• Maintenance and energy savings create payback < 2 years.

Facilities

Lighting Retrofits – Load Lighting

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• Implemented pilot program to replace standard site lighting with more efficient pulse-start metal halide lighting

• Improves site visibility and safety and reduces energy usage up to 20%

• Also testing LED area lighting

Facilities

Lighting Retrofits – Exterior

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• Engaged third-party provider to track electricity and gas usage across all facilities

• Essential for benchmarking facility performance and measuring impact of facility upgrades

Facilities

Utility Management

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• Created “Energy Watch” program to increase awareness and engage employees in conservation efforts

• Employees have changed 10,000+ (to date) incandescent bulbs to CFLs

Communication

Make a Difference Earth Day

10 simple things you cando to help our Earth:

1. Plant a Tree

2. Change a Light

3. Drive Less

4. Recycle More

5. Check Your Tires

6. Use Less Hot Water

7. Avoid a lot of Packaging

8. Adjust Your Thermostat

9. Turn Off Electronic Devices

10. Spread the Word

For more helpful information and links to additional resources, go to the Energy Watch Web site on the intranet.

Employee Engagement

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The Power of the Bundle