Success in Air Fleet Efficiency Loading...
In 2012, UPS demonstrated how an integrated, wellmanaged greenhouse gas reduction strategy can make a difference in the carbon intensity of shipping by air— one of the most carbon-intensive parts of our business.
The story starts with a metric called “block hours.” The name comes from the blocks that are placed around an aircraft’s wheels when it is not moving. UPS measures block hours as the time from brake release to the time the flight crew sets the brakes at the destination. Everything that happens during block hours burns energy, so reducing block hours means reducing fuel consumption and greenhouse gas emissions. In many ways, this is what air fleet efficiency is all about for shipping companies with substantial airline operations.
So we count block hours carefully, and then compare them to airline shipping volume and aircraft fuel consumption. Ideally, we want to hold the growth rate for block hours below the growth rates for volume. This is a significant operating challenge that requires a 24/7 commitment by our people around the world, whether they are flying or maintaining planes, planning routes, or managing air hubs.
In 2012, they delivered results beyond our expectations by reducing block hours 1.1 percent compared to 2011, even though shipping volume for the airline rose 4.8 percent year-over-year. This means we used 1.3 percent less fuel in 2012 to handle higher volume. Since 2008, we have increased our package volume per block hour 15 percent—a significant reduction in carbon intensity.
The rest of this section explains how we achieve efficiency gains in air fleet operations, starting with our capital investment strategy and concluding with a discussion of results for our air fleet KPIs.
Air Fleet Strategy
UPS operates one of the youngest, most fuel-efficient, and quietest air fleets in the package delivery sector, and we report transparently about our entire fleet rather than selected aircraft. We achieved this leadership as a result of investments we have made in past decades to reduce aircraft noise. We source jet engines for our aircraft from all manufacturers who can meet our specifications, to increase our knowledge of jet engine technology and reduce our technological risk. The noise and emissions characteristics of our fleet are disclosed in the table below, along with the average age of each aircraft type. The average age of our active fleet of 230 aircraft in 2012 was just 15.3 years. This is important because more modern aircraft typically are less noisy, more fuel efficient, and generate fewer emissions than older aircraft.
The “Stage III limit” in the table refers to noise limit guidelines published by the International Civil Aviation Organization of the United Nations (ICAO) for aircraft purchased after January 1, 1999. Our entire fleet met these limits more than two years before the Stage III deadline (in January 1999), and UPS was one of the first companies in the sector to exceed compliance with ICAO Stage IV noise guidelines and met Stage IV limits in 2008. The emissions categories “CAEP 6 and CAEP 8” refer to the strictest guidelines for nitrogen oxide (NOx) emissions limits published to date by ICAO’s Committee on Aviation Environmental Protection (CAEP). Within UPS Airlines, 84.8 percent of the fleet already meets these standards.
In 2012, we analyzed and approved the cost-benefit of optimizing the fuel efficiency of our Boeing 767 aircraft with customized “winglets.” These angled add-ons for wingtips boost aerodynamic efficiency and long-haul aircraft flying at high altitudes. We plan to retrofit the Boeing 767 aircraft in our fleet with winglets in 2013 and 2014, including existing aircraft and those on order. We believe this investment will result in an annual savings of more than 6.5 million gallons of aircraft fuel, equivalent to an overall improvement of fuel efficiency of approximately 3.6 percent. This will enable us to avoid more than 62,000 metric tonnes of CO2 per year. The figures above are calculated using our rate of fuel consumption and shipping volume in 2012 to establish a baseline for future measurements of winglet benefits.
1ICAO (International Civil Aviation Organization), CAEP (Committee on Aviation Environmental Protection), CAEP 4 mandatory for engines manufactured in 2004 to 2007, CAEP 6 mandatory for engines manufactured in 2008 to 2013, CAEP 8 mandatory for engines manufactured in 2014 and beyond.
Emission Reduction in Air Fleet Operations
In addition to meeting external guidelines, we set our own goals for airline emissions because they represent more than half of our global CO2 inventory and they are our most energy-intensive mode of transport. We strive to achieve the goals by taking both long-term and near-term actions. Long-term steps include investing in younger, more fuel-efficient aircraft (see chart on previous page), and publicly declaring our commitment to use jet engine bio-fuels when they become more readily available. Near-term steps include numerous operating initiatives that increase fuel and emissions efficiency in big and small ways, day in and day out, around the world.
In keeping with the transportation component of our greenhouse gas reduction strategy, we aggressively seek to reduce the fuel required to travel the miles our air fleet must fly to meet customer requirements. Our techniques and technologies include the following:
- Lower flight speeds.
- Computer-optimized flight plans.
- Computer-managed aircraft gate departures and arrivals and taxi times.
- Single-engine used to taxi.
- Fuel-efficient towing tugs.
- Bio-diesel in ground support equipment.
- Cleaner engines.
Reduced Carbon Intensity in Air Transport
Our primary metric for the carbon intensity of UPS Airlines is CO2 pounds emitted per available ton mile (CO2lbs/ ATM), using nautical miles. An available ton mile is a unit that combines cargo weight and distance carried, which is common in our industry. By dividing the emissions we generate by the cargo we carry and distance traveled, we can determine how efficient we are for the environment in serving our customers. Our long-term goal for this metric is a 20 percent reduction from our 2005 baseline. (This represents 42 percent reduction from 1990, a year that is widely used as the baseline for calculating changes in greenhouse gas reduction.)
We believe this is the most appropriate metric for measuring the carbon associated with global airline payload capacity and routing optimization. Stakeholders would benefit if our industry were to adopt a standardized metric, with common denominators (nautical miles), that makes it possible to understand and compare air fleet performance across companies.
The results for our airline carbon intensity metric recovered somewhat in 2012, to 1.40 CO2lbs/ATM, compared to 1.41 CO2lbs/ATM in 2011. Results in both years were strongly affected by the loss of a 747-400 cargo aircraft due to fire in the third quarter of 2010. This event has had a ripple effect, requiring UPS Airlines to reroute numerous other aircraft around the world in order to meet customer commitments. Other aircraft do not offer the emissions efficiency of the 747- 400, and the lost aircraft has not been replaced. In each of the three years before 2011, carbon intensity at UPS Airlines declined year-over-year. We anticipate the addition of the previously discussed winglets will help us offset this impact.
Innovation in Air Fleet Operations
UPS Airlines has consistently been a pioneer in testing, adopting, and helping develop next-generation techniques and technologies for increasing the fuel efficiency and reducing the noise associated with air transport. This is particularly true of the “NextGen” program of the Federal Aviation Administration (FAA) in the United States.
The NextGen program aims to transform air traffic control, aircraft routing, and cockpit options for increasing safety and fuel efficiency. The air traffic control system in the United States relies on antiquated ground-based navigation, routing, and voice communications over a limited set of frequencies. This approach requires aircraft to fly from radar to radar rather than in direct routes, and it leaves time gaps when air traffic controllers may not be certain of an aircraft’s true position. It also requires air traffic controllers to speak with pilots in real time, one at a time, which is highly inefficient near busy airports.
The NextGen approach employs GPS technology for monitoring and routing aircraft and allows electronic non-voice communications, among other innovations. The potential benefits in fuel efficiency, reliability, and safety are enormous. UPS has worked closely with the FAA for years to bring NextGen to fruition in a number of areas, including these three fundamental examples:
- Surveillance – NextGen delivers real-time positioning information, so planes can safely fly closer to each other, on more efficient routes.
- Navigation – Air traffic controllers can create “roadways in the sky” that are more direct and efficient, particularly in high-traffic areas.
- Communication – Digital communication between air traffic controllers and pilots can be faster and more precise than voice information, which would help eliminate delays near busy airports caused by the current need for air traffic controllers to individually cycle through voice communications with all approaching planes.
These advances are all beneficial to UPS, which is why we were early to adopt NextGen technologies. For example, closer spacing of aircraft near airports is particularly applicable to our Worldport hub in Louisville, Kentucky. During certain hours of operation, we are essentially the only airline flying into and out of the airport.