Industry Market Trends

Fuel Cells Make Special Deliveries

Jun 19, 2003

By the end of the year, hydrogen fuel cells will be powering UPS package delivery vehicles. And FedEx is not far behind:

Hydrogen fuel cells are debuting in package delivery vehicles this year. By late 2003, Atlanta-based United Parcel Service Inc. (UPS) will start making early-morning deliveries with fuel-cell vehicles, marking the first use of the technology in a commercial delivery fleet in North America.

"It's time to deploy this technology in a commercial fleet and learn exactly what's needed to make it broadly available," says Tom Weidemeyer, chief operating officer of UPS and president of UPS Airlines. "These vehicles are going to be rolling laboratories." They are the result of the company's collaboration with DaimlerChrysler and the Environmental Protection Agency (EPA).

DaimlerChrysler is building the fuel-cell vehicles for UPS, while the EPA is constructing a hydrogen refueling station for the cars in Ann Arbor, Michigan. The refueling station will be up and running later this year, supplying compressed hydrogen fuel to the UPS vehicles as well as other fuel-cell cars.

And UPS is not the only U.S. package delivery company adopting eco-friendly technology. Memphis, Tennessee-based FedEx Express also plans to introduce alternative energy-fueled vehicles into its delivery fleet. While UPS will be deploying zero-emission vehicles, FedEx Express, a subsidiary of FedEx Corp., will start testing low-emission, hybrid electric powered delivery trucks.

Later this year, FedEx Express will begin operating these hybrid electric diesel trucks in four yet-to-be-disclosed U.S. cities. If testing is successful, the company could deploy the vehicles in its pick up and delivery fleet as early as next fall. And eventually, FedEx Express could replace its 30,000 medium-duty trucks with hybrid vehicles over the next 10 years.

The FedEx OptiFleet E700 hybrid electric vehicle promises significant environmental benefits. The company claims it can lower particulate emissions by 90%, decrease smog-causing emissions by 75% and boost fuel efficiency by 50%.

Meanwhile, the UPS cars are "genuine zero-emission vehicles," says Ferdinand Panik, head of fuel cell development at DaimlerChrysler. Fuel cells chemically combine hydrogen and oxygen from the air to generate the electricity that powers the electric motor. This reaction does not produce smog or greenhouse gas emissions, but simply water vapor and heat.

In late 2003, UPS will start testing DaimlerChrysler's "F-Cell" cars, which sport the body of the compact Mercedes-Benz A-Class car, for express letter deliveries. And next year, the company will incorporate one or more fuel cell-powered Dodge Sprinter delivery vans into its fleet.

According to Dieter Zetsche, CEO of DaimlerChrysler's Chrysler Group, the UPS program supports DaimlerChrysler's global efforts to speed up the development of fuel-cell vehicles and to overcome the roadblocks to the technology's wide deployment. These include the prohibitive cost of production and the need for an extensive infrastructure.

Indeed, the technology's cost has to be drastically reduced before fuel cells can be viable for wide commercial use in vehicles. In fact, several industry representatives say that it is currently up to 100 times more expensive to produce a certain amount of power with a fuel cell than with an internal-combustion engine. One reason is that fuel cells need platinum to initiate the chemical reaction within, and this metal is very expensive, costing about $700 an ounce.

In addition to contending with much higher production costs, fuel cell developers must also deal with the difficulties of storing the hydrogen, not only in the vehicle, but at the refueling station and throughout the delivery system, said Gregory Vesey, president of Technology Ventures of ChevronTexaco during his testimony at a House Energy and Air Quality Subcommittee hearing on May 20.

An infrastructure of hydrogen refueling stations is essential in order for pure hydrogen to become as readily available as gasoline. And Vesey doesn't expect that this will be accomplished anytime in the next decade. During the subcommittee hearing, he predicted that fuel-cell vehicles would become widely used in the distant future because of the difficulties associated with the technology's development, reports Oil Daily.

Others are more optimistic. According to Byron McCormick, executive director of fuel cell activities at General Motors, consumers will likely start driving fuel-cell cars by 2010-2015. For now, a few will have their packages delivered to them by these alternative energy-fueled vehicles of the future.

Sources: FedEx, UPS Embrace Fuel Cell Technology
Plants Sites & Parks, June 3, 2003

UPS to Test Fuel Cell Vehicles in U.S. Delivery Fleet
UPS Pressroom: Current Press Releases, May 19, 2003,1088,4299,00.html

FedEx Express Introduces Hybrid Electric Truck
FedEx Express Press Release, May 20, 2003