* Biggest purchase yet of propane vehicles
* U.S. propane output at all-time high
* Concerns have arisen about propane supply network
March 5 United Parcel Service Inc is
spending $70 million to add 1,000 propane trucks to its delivery
fleet, the biggest bulk purchase of propane-fired vehicles yet
as output of the fuel in the United States hits record highs.
The fleet, which UPS is buying from Daimler AG's
Freightliner Custom Chassis Corp, will replace gasoline and
diesel vehicles in Louisiana and Oklahoma, UPS said in a
statement on Wednesday. The investment will include 50 new
The transition is expected to begin in the middle of this
year and be completed early next year, UPS said. It also plans
to introduce propane-fueled vehicles in other U.S. states.
The fleet, which adds to 900 propane trucks the courier
company already runs in Canada, is expected to displace about
3.5 million gallons of gasoline and diesel per year, UPS said.
UPS, known for its brown delivery trucks, already has a
fleet of about 3,150 alternative-fuel vehicles running on
compressed natural gas, liquefied natural gas, biomethane and
Propane is "a clean-burning fuel that lowers operating costs
and is readily accessible, especially on rural routes in the
United States," said UPS Chief Operating Officer David Abney.
Output of propane, which is produced alongside oil and gas
and is traditionally used for heating, it at all-time highs in
the United States thanks to a drilling boom. Propane is on
average between $1.25 and $1.50 per gallon cheaper than gasoline
at the pump, a UPS spokeswoman said.
The cheap abundance has made propane a viable alternative to
gasoline in recent years, rivaling natural gas and other niche
fuels. There are currently about 200,000 propane-powered
vehicles on U.S. roads. Last year, Home Satellite TV provider
DISH Network Corp signed a deal to run 200 of its
trucks on propane.
Despite higher output, however, the delivery network came
under severe strain as cold weather drove heating demand higher
this winter. Propane suppliers struggled to deliver enough fuel
to millions of homes and businesses leading to supply rationing
which caused prices to spike higher. A lack of pipelines led to
an over reliance on trucks and trains to ship the fuel amid some
of the coldest weather in decades
"We have identified some improvements that can be made in
our infrastructure," said Roy Willis, president of the nonprofit
Propane Education and Research Council, which expects 244,000
propane vehicles in the United States by 2020.
"But this (UPS deal) is a good sign of confidence that the
challenges we experienced this winter were a short-term,