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Jack Phelps

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More on FedEx [Oct. 28th, 2004|06:12 pm]
Jack Phelps
This article will never see publication because after I submitted it to Will he informed me that he had written one on the same topic (at my suggestion, even) last week. Alas, here it is here, comparatively unedited, anyway.


Technology Enables FedEx’s Environmental Vision
Jack S. Phelps
Business & Technology Editor Emeritus

Last week, FedEx Corporation, the shipping giant with over $26 billion in annual revenues, announced its plan to construct California’s largest corporate-owned solar power array. The plan, which would contribute 80% of the peak-load electricity requirements for its Oakland, CA distribution hub.

The prospective array will be constructed on top of the company’s two buildings at the Oakland International Airport, which employ roughly 1,700 people. It should almost one megawatt, or enough to power 900 area homes during the daytime, to the Oakland grid.

This is not the first major environmental leap the company has made. In March, FedEx announced the integration of “hybrid” diesel/electric trucks into its fleet of shipping vehicles. The new vehicle is expected to decrease particulate emissions by 96 percent, reduce smog-causing emissions by 75 percent, and travel 57 percent farther on a gallon of fuel, reducing fuel costs by over a third. Though it doesn’t specify its exact plans for how deeply it will phase in the vehicles, the company’s website notes its vision for its 10,000-vehicle fleet to save a million barrels of oil worth of diesel every year if complete adoption takes place.

The company’s other environmental visions for the hybrid fleet include reducing carbon dioxide emissions by 83,000 tons annually, the equivalent to planting 2 million trees, and reducing smog-causing emissions of nitrogen oxides by 1,700 tons annually, the equivalent of taking passenger cars off New York City roads for 25 days.

These technologies are not new, but such major implementations are essential steps in the trend of their increasing adoption. According to reporting on Tuesday by the Earth Policy Institute, world photovoltaic cell sales increased 32% in volume in 2003. The Institute says that cumulative world solar power production now stands at 3,145 megawatts, “enough to meet the electricity needs of more than a million homes.”

Also important to this trend are the cost efficiencies that come with higher-volume production of photovoltaic cells: the Institute estimates that for every doubling in production of solar cells, a 20% cost reduction is achieved.

Moreover, as anyone following the auto industry should know, Toyota’s Prius gas/electric hybrid car is a real hit (although some say that the Chevy Suburban still outsells the Prius 3-to-1 in the US).

Even though the technology isn’t exactly new, FedEx deserves kudos for its precedent-setting move. It is difficult for any major corporation to step up to the plate and take what is generally considered a risk to its shareholders’ interests. With its focus on adopting environmentally-friendly technologies, though, FedEx is demonstrating to everyone in the market that such moves can be both cost-effective and attractive to stakeholders. Now that FedEx is showing ROI from its environmental investments, what excuse do other companies have not to participate in the movement?

So take note, Babson students: when your company is looking at new facilities, building a service fleet, or other such major investments, consider green alternatives. Not only can you be saving the environment, but you can also save your shareholders some cash and draw positive publicity while you’re at it.
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