Halfway into a 12-year project to improve its fuel efficiency, FedEx (NYSE:FDX) declared victory Wednesday ... and then doubled down on its bet.
Five years ago, FedEx announced a plan to cut the fuel usage of its FedEx Express global vehicle fleet by 20% by 2020, in comparison to 2005 levels. On Wednesday, the company confirmed that it has already scored a 22% cumulative improvement in fuel economy. Rather than sit on its laurels, though, FedEx announced today that it's instead upping its goal and now aims to improve fuel efficiency by 30% (again, against the 2005 benchmark). In a statement, FedEx noted that this new goal "mirrors the company's 2012 announcement to increase its aircraft emissions goal from 20 percent to a 30 percent reduction in global aircraft emissions intensity by 2020."
Within FedEx Express alone, the company says it "expects to save approximately 20 million gallons of fuel this year through these efforts to increase vehicle fuel efficiency." It accomplished this through investments in alternative energy vehicles, having put 360 hybrid gas-electric trucks in its ground transport fleet, and 200 all-electric vehicles. Additionally, the company says it has "right-sized" its fleet by putting 10,000 smaller internal combustion engine-powered vehicles -- 35% of its fleet -- in service and buying more vehicles with "composite" bodies, rather than metal, figuring their lower vehicle weight would translate into fuel savings.
Future steps toward the new 30% savings goal will include testing "hybrid hydraulic parcel delivery vehicles," which turn off engines when not in use, and also testing use of tractor trailers powered by liquefied natural gas.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends FedEx. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.