Smart Takes

FedEx shifts to biofuel, EVs, Hybrids

FedEx shifts to biofuel, EVs, Hybrids

Posting in Energy

The rising cost of crude oil has spurred the delivery giant to adopt more sustainable energy sources.

FedEx, the global delivery service, has been spurred on to adopt more sustainable energy sources due to the rising cost of crude oil.

Gas prices keep climbing and have broken through record-high cost-per-barrel levels. Combine this with dwindling resources and a political petroleum minefield, and you are left with a difficult situation for companies that rely on vast quantities of fuel to continue trading.

In the future, prices are only going to rise, and as a consequence, business running costs soar. Unless companies compensate now, their future global competitiveness is likely to suffer.

The biofuel industry accounted for approximately 30 billion gallons of production in 2011 -- still an infant in terms of mass energy production, but is still a growing and necessary industry. FedEx is one of a number of companies that is slowly adapting to this, and making alternative investment to compensate for the future likelihood of fuel shortages.

NPR writes that FedEx CEO Fred Smith plans to turn the majority of their vehicles into models that over the long term will be able to exploit and run on renewable energy sources. Not only is it better for the environment, but makes considerable financial sense:

"An all-electric pickup and delivery van will operate at a 75 percent less per-mile cost than an internal combustion engine variant. Now, I didn't say 7 1/2 percent — [..I said...] 75 percent. These are big numbers."

Smith believes that in the next six years, electric vehicles will be in common use -- and will transport everything from FexEx packages to pizza.

"I think in three or four years you will have a battery vehicle with a range that's probably double what it has today — a couple of hundred miles versus a hundred miles — and it'll probably be 25 percent to 40 percent cheaper than [it] currently is."

By turning to sustainable, energy-efficient vehicles, companies like FexEx will be able to begin to secure their place in the future economy as competitively as possible. FedEx are not only considering electric vehicles, but have already began to invest in algal-blend biofuel production.

"You gotta do all of them. You can't sit on the left or the right of this issue," Smith says. "You've got to be willing to maximize our resources, and you've got to be willing to conserve and transition to nonpetroleum-based transportation."

FedEx are not alone in considering future plans for sustaining their business. Recently, a number of partnerships between aviation companies were announced in order to develop biofuels, and the latest Pike Pulse report has shown a growing trend for businesses to include sustainable energy sourcing in their long-term business models.

Image credit: Dan McKay

Related:

Share this

Charlie Osborne

Contributing Editor

Charlie Osborne is a freelance journalist and photographer based in London. In addition to SmartPlanet, she also writes for business technology website ZDNet and consumer technology site CNET. She holds a degree in medical anthropology from the University of Kent. Follow her on Twitter. Disclosure