FedEx: Pushing the envelope on sustainability

When you need to ship a package, how do you choose between FedEx and UPS? Their services are similar, if not identical. While I’ve never compared prices, I assume they are roughly equivalent.

Could the company’s sustainability practices come into play? I’m told that they do, for select customers. Their employees care as well–people want to work for companies that are helping to solve the world’s big problems, like climate change. Regulators could also be paying attention. Whatever the explanation, FedEx and UPS are competing to become known as the most sustainable shipping company–which means we’re all winners.

FedEx's efficient Boeing 777 freighter

FedEx's efficient Boeing 777 freighter

Mitch Jackson, who is staff director of  environmental affairs and sustainability at FedEx, met with me recently to make the case on behalf of FedEx. He says the company has identified four “building blocks” of its approach to the environment. They are:

Leadership

Innovation

Performance

Transparency

FedEx has room to improve in all four areas, he admits, but he adds, pointedly:

Importantly, FedEx is the only company in our industry striving at all four simultaneously.

Take that, Brown.

My meeting with FedEx was no accident. Last month, after interviewing a sustainability executive from UPS, I blogged about the FedEx-UPS competition. (See UPS to FedEx: We’re Greener Than You.) Understandably, FedEx asked for equal time, so I met with Jackson, a longtime FedEx executive (and speaker at FORTUNE’s Brainstorm Green conference) during his recent visit to Washington.

I can’t say that he persuaded me that FedEx is greener than UPS. You can make arguments on behalf of either firm, particularly because there’s lots of disagreement between them about what metrics to use. Newsweek’s very flawed rankings put UPS slightly ahead of FedEx. By contrast, a nonprofit called Climate Counts ranked shipping companies and gave FedEx the edge over UPS and the U.S. Post Office.

There’s also debate about who got going first when it comes to the environment. FedEx likes to talk about its ambitious and successful partnership with the Environmental Defense Fund to create a market for hybrid trucks, which began back in 2000. This, Jackson said, makes FedEx the pioneer when it comes to alternative vehicles. UPS followed, helping the market for hybrids to grow. “When UPS decided to buy some hybrid-electric vehicles, candidly, we were thrilled,” he said. UPS’s retort? They’ve been using electric cars since the 1930s.

Enough tit-for-tat. What seems clear to me after talking to Jackson is that FedEx is doing a lot of things right when it comes to sustainability. Some highlights:

  • FedEx has promised to reduce its greenhouse gas emissions from aircraft by 20% by 2020, on a pound per available ton mile basis. It was the first U.S. shipping company to do so. “UPS would not have set a reduction goal if we hadn’t not it first,” Jackson says.
  • It has set a goal of improving the fuel economy of its vehicles by 20% by 2020.
  • It has created a corporate citizenship blog, signaling a willingness to be open and to engage with critics.
  • It has engaged constructively in Washington. FedEx CEO Fred Smith lobbied a few years ago for fuel-efficiency standards for commercial vehicles.
  • Having said that, it’s clear to me that many of the steps taken by both FedEx and UPS to reduce pollution and emissions are driven more by economics — specifically, by a desire to save fuel — than by climate change worries. FedEx, for example, recently took delivery of its first Boeing 777 freighter, uses less fuel and produces fewer emissions than the rest of its fleet. Even better, it can fly from FedEx’s Memphis hub to China without having to stop for refueling in Anchorage, as its older planes do.

    In the end, motivation isn’t the issue. As Jackson put it: “We try not to separate the issue of “green” from economics. They go together.”

    What’s encouraging is the competition. When UPS and FedEx,  Coca Cola and PepsiCo, HP and Dell compete around “green,” the environment is better off. UPS recently took the shipping rivalry to a new level by deciding to offer customers a “green” option of paying a small fee, between 5 and 20 cents, to offset the carbon emissions of their shipping. Here’s the announcement.

    Your turn, FedEx.

    FedEx's Mitch Jackson

    FedEx's Mitch Jackson

    Comments

    1. Informative – wish it the article could have been longer.

    2. I am so sick and tired of hearing this garbage about “buying” carbon credits. Is this so we can continue to breath or exhale? You people are just plain ridiculous. No proof whatsoever for your continued pressing of CO2 being a greenhouse gas. There is more proof that it follows warming not that it causes it.

    3. It’s good to make promises to improve 20% by 2020. What I don’t read are steps they are taking now, such as converting fleets to mixed fuel, reduced packaging or even slowing down the drivers, many of whom take their slogan a bit too seriously.

    4. Hi Mark: I am sorry I missed the opportunity to meet you at Net Impact last week. But interested to follow your blog and Fortune pieces. (Just fyi, the link to the UPS announcement above goes missing when you try it.)

    5. Mark – what was FedEx’s response regarding the fact they run 3 independent networks to delivery over the same roads and to the same delivery points? Doesn’t it seem a little silly to think it’s “greener” to run 3 trucks by the same company? If you get regular deliveries and pickups, you could have as many as six trucks or more on a given day by plan! That seems like a lot of excess emissions to me but I’m not green expert.

    6. Marc
      I recently went to a local Kinko/Fedex office and bought a box for shipping. They made me buy a whole roll of tape for making the box. (So I paid for the box and the tape and a lot more than USPS for shipping the package) However when I went to the local USPS some time later they supplied the tape if I bought a box from them.
      The staff of the local USPS are even friendlier. And have you tried their Flat Rate boxes?
      I strongly suspect the USPS is Greener than Fedex or WalMart taking the big picture and you should write an article about it.
      I think we are short changing USPS and not giving them the due credit
      My business though small now goes to USPS

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