Hybrid Car Review

Press Release

4,100 Low-Emission Vehicles Also Being Acquired in 2006

ATLANTA, Feb. 17, 2006 - UPS (NYSE:UPS) today announced it had placed an order for 50 new-generation hybrid electric delivery trucks and also would acquire 4,100 low-emission conventional vehicles during 2006.

The hybrid electric vehicles (HEV) are being purchased in two sizes from International Truck and Engine and Freightliner LLC. The trucks will feature lithium ion batteries that are capable of faster re-charging and have a longer life than batteries used in previous generations of HEV’s. The truck bodies will be identical externally to the signature-brown trucks that now comprise the UPS fleet.

The first of the 50 HEV’s will be deployed in Dallas this June and will join more than 10,000 low emission and alternative-fuel vehicles already in use. The UPS alternative fuel fleet - at 1,500 vehicles one of the largest in the United States - currently includes trucks powered by compressed natural gas, liquefied natural gas, propane, electricity and hydrogen. Research also is underway with the Environmental Protection Agency on a hydraulic hybrid drivetrain.

“We’re excited to be among the first to deploy this latest in HEV technology because it promises a 35% increase in fuel economy in addition to a dramatic decrease in vehicle emissions,” said Robert Hall, UPS’s fleet environmental manager. “UPS has been involved in HEV research for more than eight years, but that’s just one part of a multifaceted strategy to reduce fuel dependency, cut greenhouse emissions and in the long run, reduce operating costs.”

The 50 HEV delivery trucks collectively are expected to reduce fuel consumption by roughly 44,000 gallons over the course of a year compared to a normal diesel truck. The hybrids also should reduce by 457 metric tons the amount of CO2 gases released into the atmosphere over the course of a year. The 4,100 low emission vehicles offer a 15 percent improvement in fuel economy over the vehicles that will be retired. These vehicles will save roughly 1.5 million gallons of fuel over the course of a year, emitting 16,000 fewer tons of CO2.

A hybrid electric vehicle replaces a conventional engine and transmission with a small fuel-efficient diesel engine that acts as a generator to provide electrical energy for batteries and drive motors, which in turn assume the primary role of powering the vehicle. When additional power is required, the truck can draw it directly from the small engine.

The hybrid electric vehicles also use what is known as regenerative braking, meaning the energy generated when stopping the moving vehicle is captured and returned to the battery system as electrical energy.

UPS was the first package delivery company to introduce a HEV into daily operations with a research program it launched in early 1998. In 2001, the company deployed the industry's first hybrid electric package car into regular service in Huntsville, Ala., where the truck worked a 31-mile route with about 160 pickups and deliveries each day. UPS then introduced its second generation HEV to its Kalamazoo, Mich., fleet in 2004, while at the same time deploying the first hydrogen fuel cell delivery trucks into regular service.

While continuing to develop its alternative fuel fleet - UPS already has invested more than $15 million in the effort - the company also has purchased and is operating more than 8,800 low emission conventional vehicles. These vehicles have regular gas- and diesel-powered engines but employ the very latest technology and manufacturing techniques to reduce emissions as much as possible.

The majority of the 4,100 low-emission vehicle chassis to be purchased in 2006 will be made by Freightliner LLC and will enter the UPS fleet throughout the year, allowing the retirement of older trucks.

“Our long-term goal is to minimize dependence on fossil fuels, and we will get there by deploying a wide variety of new automotive technologies in our fleet,” Hall said.

UPS is the world’s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS’s stock trades on the New York Stock Exchange (UPS), and the company can be found on the Web at UPS.com.