Better is Before Us

Abstract

As the keynote speaker at the American Trucking Association’s Technology & Maintenance Council’s annual meeting, Carlton Rose discussed how adaptability, bravery and commitment can help the trucking industry create cleaner cities, ensure safer vehicles and advance technical expertise.

Good morning.

It’s great to be here with you and have the honor of kicking off what promises to be a great day in an outstanding conference.

The theme of this year’s conference – Driving Excellence through Expertise – is pretty timely. But at a time when technology seems to be providing more and more of the expertise, it might seem kind of hard to determine what excellence looks like.

I mean think about it – with automation on the rise, will AI, robots and telematics be the expertise driving excellence?

When motors run on an electrical charge rather than diesel fuel, what does excellence in maintenance look like?  And what’s the expertise that gets us to it?

For those of us whose careers were made on being the expertise that drives excellence, the bad news is – excellence evolves.

The good news? Excellence evolves.

Consider the cell phone… In the early ‘90s, excellence in mobile phones looked like the Motorola bag phone. It weighed about 10 pounds and cost about $500.

But it wasn’t a failure.

It was an evolution.

Excellence evolved…

Back in 1956, a small group of maintenance directors sat down with truck manufacturers to talk about equipment maintenance problems. That group was where TMC was born.

That same year, Jim Casey, the founder of UPS, announced that UPS was going to create a ‘new’ business – a road-based, truck and package car network built on a national scale. At the time, he said: “New industries, new kinds of business are particularly promising to people who get into them early because there is the chance to share in their growth.”

By defining what excellence in package delivery looked like, we shaped what kind of expertise was needed to achieve it.

Let me say that again – if you’re the one who defines excellence, then you’re the one who shapes the expertise to achieve it.

So maybe it’s time for us to define excellence.

And I think this week is a good time to start.

So, what should excellence look like for the trucking industry in the future?

It seems to me that the first step in defining excellence in the future, is understanding what mediocrity looks like today.

Today, mediocrity is polluted air.

Today, mediocrity is over 97,000 crashes across our industry, more than half of which involved injury or death.

Today, mediocrity is standing still watching and worrying as technology pushes everything ahead faster than ever before.

Let’s assume that no one in this room is okay with any of this. So, let’s turn our attention to reality, where we can define excellence in three big areas: Cleaner cities. Safer vehicles. Technical knowledge.

Let me explain what I mean, with some examples from my experience and a company I know pretty well — UPS.

Number one: Cleaner cities.

In a world of worthy causes, this is one where we have the chance to define excellence. And to help determine what’s needed to get there.

In the U.S. transportation sector, 23 percent of the greenhouse gas emissions are generated by medium and heavy-duty trucks.

Everything comes down to what we put into the air. Carbon is where we can get it right or wrong. Where we can be part of the problem … or part of the solution.

Like all of you, UPS wants to be part of the solution. And we should be.

Every day, 6 percent of everything manufactured in the US and 3 percent of everything manufactured in the world moves through the UPS network.

Everything from jet engine parts and life-saving vaccines to – my personal favorite -- a new set of golf clubs.

We’re a company that operates over 330,000 pieces of equipment including 116,000 power vehicles and more than 500 aircraft. We have 435,000 employees who live and work in 220 countries and territories.

We’re a company with a significant global footprint that feels an obligation to customers, consumers and communities. We’re all in.

And we’ve always been an early adopter of innovative technologies. In the early 1930s, we introduced electric vehicles into our fleet. Today, we operate one of the industry’s largest private alternative fuel and advanced technology fleets.

All-electric, electric hybrids, propane, CNG and LNG. In all, more than 9,000 vehicles. These vehicles have logged over a billion miles in the U.S. and countries around the world. To put that in perspective, we’re talking the equivalent of 14 round trips to Mars!

Together, they make up what we call our rolling laboratory. It shows us how alternative fuels and advanced technologies perform in real-world operating conditions. It helps us quickly deploy viable options at scale. It allows us to spur market growth for alternative solutions.

And based on what the rolling laboratory has told us, we’re investing millions of dollars to reduce our environmental impact. We’re starting with fuel, specifically … natural gas.

We started investing in natural gas almost 20 years ago. Today, we’re working across multiple technologies. CNG, LNG, propane and ethanol.  

Just last year, we announced plans to build an additional six CNG fueling stations, add 390 new CNG tractors and terminal trucks, and 50 LNG vehicles to our alternative fuel and advanced technology fleet. That’s a $90 million investment in natural gas alone.

Like the rest of the industry, we’re especially excited about renewable natural gas. In fact, we’re now the nation’s largest user of RNG in the shipping industry.

One big advantage of RNG is that we can turn it into either CNG or LNG. That’s what engineers like to call an “elegant solution,” where tough problems are solved with the least waste.

Let me explain…

Methane produced by decay in landfills, water treatment plants and farms is captured for local power. But most is vented into the atmosphere.

After it makes its way out of the source, and for the next two decades, methane remains 86 percent more potent than carbon dioxide with 25 percent more global warming potential.

To use it, we have to capture the methane before it escapes. Purify and process it. Pipe it across the country through existing pipelines. Then use it in our trucks as LNG or CNG.

The idea is simple. But the logistics are challenging.

However, if we can create enough scale, the massive amounts of methane that would have gone into the atmosphere will go into our vehicles instead. Vehicles that would not burn gasoline or diesel but – as a result – would reduce the amount of carbon being put into the air.

Critics argue that these are still fossil fuels, which means that they aren’t good for the environment. Just less bad.

But we see them as a bridge… a bridge to the future of zero-emission transportation, which is still a ways off. As a bridge fuel, less bad is actually very good.

Initially, that bridge can take us to renewable diesel, which can be derived from a number of bio-based processes – palm oil, waste oil, cooking grease, even chicken fat.

The good news is that renewable diesel performs as well or even better than traditional diesel. We can blend it with anything. It’s less polluting. It’s everywhere. It turns waste into energy.

And then there’s electric and hybrid cars. They’re a factor now, but only a fraction of the factor that they will be in a future of zero-tailpipe emissions.

Again, UPS has some history here. We ran a fleet of battery-powered vehicles in New York from the 1930s to 1960s. They only went 20 miles an hour, but that was fast enough for crowded Manhattan streets.

With that kind of head start, you’d think by now we’d have fleets of battery-powered trucks that could cross the country on a single charge. But, like most industries, decades of cheap oil got in our way.

However, in the past decade, we’ve gotten back on track in two areas: All-electric and hybrid electric.

We have 122 electric package cars in the U.S. … California, Texas and New York. We also have 172 electric vehicles in other parts of the world, mainly in Europe. We have 683 hybrid electrics in the U.S. and 12 in Hong Kong and the U.K. They use braking to turn kinetic energy into electric energy, shutting down the combustion engine when idling.

In 2016, we bought 125 electric-hybrid vehicles from Workhorse. In 2017, we bought 200 more. They give us 400 percent better fuel economy than gas. By comparison, previous hybrid designs only gave us a 10 to 15 percent improvement over gas.

These technologies are on the road right now, part of our rolling laboratory. Our job is to make them bigger – and better – to continue to improve the technology and build the infrastructure to support them.

Cleaner fuel and cleaner vehicles mean cleaner cities. That’s one way we’re defining excellence. And, as a result, it’s one thing we’re shaping the expertise for.

The second definition of excellence is safer vehicles.

Remember those 97,000 industry crashes and 51,000 injuries I mentioned earlier? Let me add another number – 104,326. That’s how many industry vehicles were involved in those crashes.

Commercial trucks represent just 1 percent of the vehicles on the road, but accidents involving them account for 10 percent of all road fatalities.

Increasingly, one solution we’re all hearing about is autonomous vehicles.

And many of us don’t like the sound of that.

But they’re coming.

The real question is when.

In the meantime, there’s one area – an interim step – where we can define excellence and expertise right now…today … ADAS.

If excellence is safer vehicles, then ADAS – Automated Driver Assistance Systems – could prevent up to 63,000 truck-related crashes each year. And that could save a lot of lives.

Lane departure warning systems. Automatic emergency braking. Air disc brakes. Video-based onboard safety monitoring systems. These are cost effective technologies that make the roads safer for all of us – including truckers at the wheel.

Another technology?

Platooning. We all know about the fuel savings platooning could deliver – as much as 5 percent on the front truck and 10 percent on the back truck. But ADAS is the key to unlocking that value.

UPS’s advanced technology group is working with Peloton, a company based in San Jose, California. Peloton is developing driver-assistance technology that will allow trucks to platoon safely. All drivers steer, but with always-on collision avoidance, which provides alerts for frontal collision, blind spots and lane departure.

If excellence is safer vehicles, we can’t just look at the technology coming at us – we must be actively engaged. When our founder talked about being part of new companies’ growth, he meant an active part.

A defining part.

And that brings me to the third definition of excellence: Knowledgeable people.

Clearly, we’ve understood the need for this kind of expertise for a long time. You don’t call this group the Tinkerers & Maintenance Council. Technology has been part of who you are for more than 60 years.

It’s also a huge part of UPS. We think of ourselves as a technology company with trucks. So, we no longer have mechanics. We have technicians.

Because we must raise the level of expertise to match the rising levels of technology.

Cleaner cities. Safer trucks. Knowledgeable people.

Who wouldn’t want to shape – and have – the expertise to drive that kind of excellence?

And yet, as companies and as an industry, we seem to be dragging our feet.

Why?

Why wouldn’t we want things to be better?

I think we do.

However, there are three big barriers to better—cost, infrastructure and fear.

Number one: Cost.

Change…costs. It is no small feat – or expense – to move from diesel to electric and natural gas.

You probably heard about UPS' recent Tesla shopping trip.

Late last year, UPS ordered 125 Tesla all-electric semi-trucks to expand our fleet of alternative-fuel vehicles.

It’s Tesla’s biggest order for the big rig so far.

Was it cheap? No! Not at $180,000 to $200,000 per truck.

Conventional vehicles run at least 25 percent less.

But we fully expect a lower total cost of ownership. Electric vehicles should be cheaper to maintain.

And we’re hoping that if we stimulate widespread adoption, scale and competition will drive down prices.

But, really, the cost of the vehicles is nothing compared to the costs involved in infrastructure, which is barrier to better number 2.

Let’s face it – when it comes to electric vehicles, the challenge is range.

On a good day, electric class-8 semi manufacturers say their best option might get us 500 miles on a single charge. But as many of you know, that could vary with weather and traffic conditions, load, driver behavior and other factors.

Range anxiety is real.

And even if they find a way to charge a truck in half an hour without reducing battery life, it will take a huge amount of power. That means putting up new transmission voltage lines, upgrading substations with more powerful transformers, and constructing new natural gas generating power plants. Billions of dollars.

Right now, there’s no federal infrastructure plan – or budget – to pay for it. So, who will?

UPS definitely has an advantage. Our hub system makes a fleet of alternative vehicles possible.

It’s essentially a self-contained infrastructure.

Sure, it costs us to upgrade that infrastructure, but if any company takes on this challenge, it should be UPS.

Our leadership is not only important – it’s required. When a company that logs as many miles as we do shows that it’s serious about creating a market, we believe others will want to invest in the infrastructure to supply it.

Because infrastructure anxiety is real, too.

And that brings me to the third barrier to better – fear of the unknown.

It’s understandable to be afraid of all this change. In fact, it’s smart.

But fear of the unknown discourages investment, particularly for smaller players.

There are tax incentives and grants to be sure. Usually they’re available exclusively to government entities and nonprofits, because there’s a "public benefit" requirement to get them. Hybrid truck grants are the rare exception.

ecause breathing clean air is clearly a "public benefit."

These are great steps. But you probably would have a lot more confidence if the rules didn’t change every year.

Government also plays a role in another way – by making us an offer we can’t refuse. In other words, regulation.

So, how do you fight fear of the unknown?

First, you make sure there’s an exit strategy. All technology simply may not work for all companies at all times. There are no silver-bullet solutions.

And second … sometimes you “just do it.”

Don’t sacrifice the good for perfect.

But tackling just one of these barriers to better isn’t enough.

How do we knock down all three?

How do we break through to better?

Actually it’s as simple as A-B-C. Adaptability, bravery and commitment.

Breaking through to better calls for adaptability. We must be willing to change as technology changes. Continuous learning is critical

Breaking through to better requires bravery. Far too often, we’re mentally enslaved to the familiar. Freeing ourselves may mean taking the first step, being an early adopter. Doing things differently is key.

And finally, breaking through to better demands commitment. Excellence – cleaner cities, safer trucks, and knowledgeable people – takes expertise. If you’re committed to excellence, really committed, then you’ll get that expertise. Commitment is how expertise drives excellence.

Back in 1954, UPS began what was, perhaps, its greatest period of change. When UPS founder Jim Casey saw that highways were getting better and airplanes were carrying more, he envisioned UPS moving beyond delivering for department stores … to enabling commerce for the continent. He envisioned a company that could get packages to any city or town in the U.S. within two days. But, he said, doing it would require people who could think beyond the present – people who could do what has never been done before.

He might just as well have been talking to us here today.

Bottom line: You cannot be a linear thinker in an exponential world. Today’s excellence will be tomorrow’s mediocrity.

But I believe we are the people who can do what has never been done before.

I believe that we will shoulder the costs, build the infrastructure and free ourselves from fear of the unknown.

I believe that we are adaptable, brave and committed enough to shape the expertise needed to drive excellence — no matter how it evolves.

I believe that cleaner cities, safer trucks and knowledgeable people are ours to create.

I believe that better is before us.

It has been an honor to speak to you today. I hope you have a great conference.

Thank you.

Inquiries

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