Expanding the UPS Green Fleet About UPS

Expanding the UPS Green Fleet

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 9 th largest airline

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 •

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

U. S. Domestic Alternative Fuel and Advanced Technology Vehicles U. S. Alternative Tech Vehicles Total: 2, 072 Electric Vehicles: 102 Hybrid Electric Vehicles (HEV): 380 § P 70 E = 40 Package Cars § P 100 E = 62 Package Cars § P 70 H = 25 Package Cars § P 100 H = 355 Package Cars Hydraulic Hybrid Vehicles (HHV): 41 Propane Vehicles: 18 § P 10 HH = 41 Package Cars § P 80 XP = 10 Package Cars § HSP = 8 Shifters Composite Body Diesel Vehicles: 251 § P 63 D = 251 Package Cars Compressed Natural Gas (CNG) Vehicles: 940 (car group = count) § § § P 70 C = 188 Package Cars P 80 C = 33 Package Cars P 100 C = 578 Package Cars P 10 CX = 50 Package Cars HSC = 46 Shifters HTDAT= 45 Tractors Liquid Natural Gas (LNG) Vehicles: 340 Updated: 4/11/2014 Corporate Automotive Engineering Confidential Information Internal Use Only © Copyright 2013, UPS, Inc. All rights reserved.

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 § § § Corporate Automotive Engineering Compressed Natural Gas Vehicles: 91 Hybrid Electric Vehicles: 6 Propane Vehicles: 852 Electric Vehicles: 44 Ethanol Vehicles: 50 Updated: 10/11/2013 Biomethane Vehicles: 20 Confidential Information Internal Use Only © Copyright 2013, UPS, Inc. All rights reserved.

Expanding the UPS Green Fleet with LNG

Kenworth T 800 - Extended Day Cab - Single Rear Axle - Fuller 10 Speed Transmission

Alternate Fuels and Advanced Technology Equipment Spark Ignited LNG

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

Background 1. There is an abundance of Natural Gas available in the U. S. 2. Liquefied natural gas, or LNG, is natural gas that has been converted to liquid form for ease of storage or transport. 3. Tractor Manufacturers have been developing tractors in order to utilize natural gas as a transportation fuel. 4. Various incentives (grants and tax) are available to offset some of the capital investment associated with LNG as a transportation fuel. 5. LNG fuel is substantially less expensive than Diesel 6. LNG/CNG fit the UPS sustainability mission

Background Benefits of LNG as a Transportation Fuel 1. Reduces dependence on Foreign Oil 2. Lower Emissions than Diesel Fuel 3. Financial ($1. 75 per gallon price gap) Annual Savings* Miles per Day 300 400 500 600 700 800 900 1000 1100 LNG SI $ 14, 382 $ 19, 176 $ 23, 970 $ 28, 763 $ 33, 557 $ 38, 351 $ 43, 145 $ 47, 939 $ 52, 733

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/ Westport HPDI 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.

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.

Fleet Perspective- The LNG experience” Experiences along the way Tractor range was very dependent on: ØDriving skills ØTerrain ØWind conditions ØType of trailer combination ØWeight of loads ØFueling skills of driver ØConditioning tanks on initial fills

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.

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.

Fleet Perspective- The LNG experience” Lessons Learned Internal roles & responsibilities established for: ØDriver training ØFueling ØShop requirements & design ØFueling station Maintenance ØLNG vehicle, tank inspections & maintenance ØVehicle specific daily usage based on miles run

Fleet Perspective- LNG Fueling stations Public station needs Location is everything! ØClose to main highways ØAccessible for long combinations ØReliability of station- quick response & resolution Ø 24/7 operation ØLarge enough to avoid wait time and congestion ØConsistent point of contact

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, cleanerburning domestic fuels that are better for the environment and more sustainable than conventional diesel.

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

Expanding the UPS Green Thank You!