Expanding the UPS Green Fleet

1. Expanding the UPS Green Fleet

2. About UPS World's largest package delivery company and a global leader in supply chain services Headquartered in Atlanta, serves more than 220 countries and territories worldwide 397,100 employees worldwide 16.3 million packages per day 2013 Revenues: $54.1 billion 100,069 vehicles World’s 9th largest airline

3. Recent Recognition FORTUNE magazine – World’s Most Admired Companies Ethisphere Institute – World’s Most Ethical Companies Inbound Logistics – Top 100 Motor Freight Carriers Maplecroft – Climate Innovation Index Climate Counts – Top 10 Newsweek magazine – Green Rankings Dow Jones Sustainability Index – S&P Carbon Disclosure Project Leadership Index EPA Climate Leadership Awards Corporate Responsibility Magazine - 100 Best Corporate Citizens

4. UPS: No Bias As To Alternative Fuels/Technologies UPS’ “rolling laboratory” tests virtually all alternative fuels/technologies with more than 2,800 vehicles in operation worldwide. Natural gas – CNG and LNG Hydraulic hybrid Propane Electric hybrid Fuel cells Plug-in Electric

5. U.S. Domestic Alternative Fuel and Advanced Technology Vehicles U.S. Alternative Tech Vehicles Total: 2,072 Electric Vehicles: 102 • P70E = 40 Package Cars • P100E = 62 Package Cars Hybrid Electric Vehicles (HEV): 380 • P70H = 25 Package Cars • P100H = 355 Package Cars Hydraulic Hybrid Vehicles (HHV): 41 • P10HH = 41 Package Cars Propane Vehicles: 18 • P80XP = 10 Package Cars • HSP = 8 Shifters Composite Body Diesel Vehicles: 251 • P63D = 251 Package Cars Compressed Natural Gas (CNG) Vehicles: 940 (car group = count) • P70C = 188 Package Cars • P80C = 33 Package Cars • P100C = 578 Package Cars • P10CX = 50 Package Cars • HSC = 46 Shifters • HTDAT= 45 Tractors Liquid Natural Gas (LNG) Vehicles: 340 Updated: 4/11/2014

6. Global Alternative Fuel and Advanced Technology Vehicles Total Alternative Tech Vehicles (U.S. & International): 3,135 U.S. Alternative Tech Fleet: 2072 • Compressed Natural Gas Vehicles: 940 • Hybrid Electric Vehicles: 380 • Liquid Natural Gas Vehicles: 340 • Propane Vehicles: 18 • Electric Vehicles: 102 • Hydraulic Hybrid Vehicles: 41 • Composite Body Diesel: 251 International Alternative Tech Fleet: 1,063 • Compressed Natural Gas Vehicles: 91 • Hybrid Electric Vehicles: 6 • Propane Vehicles: 852 • Electric Vehicles: 44 • Ethanol Vehicles: 50 • Biomethane Vehicles: 20 Updated: 10/11/2013

7. Expanding the UPS Green Fleet with LNG

8. Kenworth T800 - Extended Day Cab- Single Rear Axle- Fuller 10 Speed Transmission

9. Alternate Fuels and Advanced Technology Equipment Spark Ignited LNG

10. Performance Statistics In 2013… UPS vehicles traveled 2,373,467,743 miles UPS vehicles used 324,088,987 gallons of fuel Gasoline package cars averaged 8.54 MPG Diesel package cars averaged 10.18 MPG Tractors averaged 6.39 MPG * Numbers represent domestic fleet only

11. Background • There is an abundance of Natural Gas available in the U.S. • Liquefied natural gas, or LNG, is natural gas that has been converted to liquid form for ease of storage or transport. • Tractor Manufacturers have been developing tractors in order to utilize natural gas as a transportation fuel. • Various incentives (grants and tax) are available to offset some of the capital investment associated with LNG as a transportation fuel. • LNG fuel is substantially less expensive than Diesel • LNG/CNG fit the UPS sustainability mission

12. Background Benefits of LNG as a Transportation Fuel • Reduces dependence on Foreign Oil • Lower Emissions than Diesel Fuel • Financial ($1.75 per gallon price gap)

13. Fleet Perspective- The LNG experience” The first 10 duel fuel LNG tractors and 1 Mack SI were put in service in Ontario,Ca in 2001. In 2011 we introduced the Kenworth/ WestportHPDI to the UPS fleet in Ontario and Las Vegas NV. In 2012 that build continued with additional tractors added to Salt Lake City and Beaver Utah.           

14. Fleet Perspective- The LNG experience” Experiences along the way Kenworth & Westport support on initial build was excellent for driver and mechanic training. Good dealer support and network.

15. Fleet Perspective- The LNG experience” Experiences along the way Tractor range was very dependent on: • Driving skills • Terrain • Wind conditions • Type of trailer combination • Weight of loads • Fueling skills of driver • Conditioning tanks on initial fills

16. Fleet Perspective- The LNG “experience” Experiences along the way LNG shop requirements were difficult to understand. Limited locations to benchmark from. Consultants were needed to move forward with shop designs. Maintenance issues had a steep learning curve.

17. Fleet Perspective- The LNG “experience” Experiences along the way Very good driver acceptance after initial fear of LNG and a different design of truck. Very good press and media coverage.

18. Fleet Perspective- The LNG experience” Lessons Learned Internal roles & responsibilities established for: • Driver training • Fueling • Shop requirements & design • Fueling station Maintenance • LNG vehicle,tank inspections & maintenance • Vehicle specific daily usage based on miles run

19. Fleet Perspective- LNGFueling stationsPublic station needs Location is everything! • Close to main highways • Accessible for long combinations • Reliability of station- quick response & resolution • 24/7 operation • Large enough to avoid wait time and congestion • Consistent point of contact

20. Continued Improvement While operating its current alternative fuel and technology vehicles, UPS is also working with manufacturers, government agencies and nonprofit organizations to advance new fuel technologies and find cheaper, cleaner-burning domestic fuels that are better for the environment and more sustainable than conventional diesel.

21. Expanding the UPS Green 2014 InitiativesContinue LNG Tractor deployment (Est.984 total)Deploy 45 CNG Class 8 tractorsInitial roll-out of Propane package car fleet expansion (1000 planned)

22. Expanding the UPS Green Thank You!