FedEx is a cargo company that has more aircraft than most airlines. With 680 aircraft, if FedEx were an airline, it would rank fifth in the world, ahead of China Southern, which has 620 planes, and just behind #4 Southwest, with 736. So it should not come as a surprise that FedEx is wrestling with ‘airline’ issues like greenhouse gases, carbon capture and alternative fuels.
Aviation sustainability is a key issue for the shipping leader, according to Mitch Jackson, Environmental Affairs and Chief Sustainability Officer at FedEx. Jackson says FedEx has been working for more than a decade to reduce its carbon footprint across its aircraft fleet. Aviation accounts for about 60% of FedEx emissions, although the carrier says it has cut aircraft emissions intensity by 27% since 2005.
FedEx has already put in $2 billion towards sustainability efforts. Since 2012, FedEx says it has saved 1.43 billion gallons of jet fuel and avoiding 13.5 million metric tons of CO2 emissions. On the ground, the company expects 100% vehicle electrification of its parcel fleet by 2040.
“We are going to take our global operations carbon neutral by 2040,” Jackson said. To get there, FedEx has adopted a “Reduce, replace, revolutionize” strategy, covering the company’s operations, including aviation, vehicle operations, and facilities.
Reduce refers to more than 60 Fuel Sense programs to cut fuel use. Replace refers to aircraft modernization; FedEx’s 100 Boeing 767 freighters are 30% more efficient than its aging MD-10s. Revolutionize is the move towards sustainable aviation technology like electrofuels (that apparently involves feeding carbon dioxide to microorganisms) and ‘green’ hydrogen.
Coincidentally, Cathay Pacific just announced its commitment to net-zero carbon emissions by 2050, making it one of the first airlines in Asia to set a timeline for going carbon neutral. The airline says, “Sustainable aviation fuel, (which can reduce lifecycle carbon emissions by up to 80% compared to traditional jet fuel) carbon offsetting, (where passengers can buy offsets based on the CO2 emissions generated from their flight) and reducing emissions are key to achieving greener aviation.”
But achieving true sustainability in aviation has proven a major obstacle with heavy, thrust-demanding commercial aircraft. Still, FedEx has its sights set on a much loftier goal than carbon offsets—carbon capture. FedEx is giving $100 million to Yale for the new Yale Center For Natural Carbon Capture, where a portfolio of carbon sequestration techniques for removing and storing Earth’s excess carbon are being developed. The initial goal is to help offset greenhouse gas emissions equivalent to current airline emissions.
Jackson says that the goal of the research is “to help industries that have more difficulty reaching zero carbon in the near term. Aviation is clearly one of those industry.”
Some techniques to be explored include geological sequestration, biological sequestration, and different industrial processes. Jackson says biological sequestration includes increasing forestation to convert carbon into oxygen through increasing photosynthesis.
Jackson says that before COVID-19 impacted flying, about a gigaton of carbon was created each year by the aviation industry. The aviation industry creates between two and three percent of global greenhouse gas emissions per year, while the cement industry is about 7%.
Still, while cars (and FedEx delivery vehicles) move to electric power, it will be harder to make such wholesale changes in aviation in the near term. In the meantime, FedEx is focusing on operational and aircraft modernization program.
“On the operational side, our 60 Fuel Sense programs have changed the way we taxi, the way we fly,” says Jackson. “We now use, lightweight cargo containers that save fuel on infrastructure weight.” The payoff? Jackson note, “Last year alone we saved 250 million gallons of fuel. There are significant savings through these programs, but we have to do more.”
FedEx is also looking at sustainable fuels through partners like Red Rock Biofuels. Still, Jackson says, “Biofuel will not enough be enough in near term to serve the needs of the aviation industry. We have to put new technology and new aircraft.”
FedEx financial commitments towards “greener” operations range from funding research to buying new, more efficient aircraft. Of course, it might be easier for FedEx than the airline industry to spend on this now unlike the airline industry, FedEx did not suffer deep losses during COVID. In first quarter 2021, FedEx reported $939 million in profit on $21.5 billion in revenue. By contrast, American Airlines reported first-quarter revenue of $4.0 billion, down 53% year over year along with a first-quarter net loss of $1.3 billion.
While aircraft modernization is important to FedEx, some older planes were kept in service due to COVID cargo demands. “We had intended to retire the MD-10 earlier, but we needed them to operate during COVID,” says Jackson. The 17 Boeing MD-10 tri-jetss the company has been operating since the 1980s “will all be gone by 2023.” Similarly, Jackson says, “We pulled 50 planes out of storage to fly PPE equipment from Asia.”
FedEx did take delivery of 18 new 767 cargo aircraft in 2020, and has orders for an additional 35 767s and 13 777 freighters.
There is no single ‘magic bullet’ that will allow the aviation industry to become instantly sustainable. “Sustainability is a team sport,” says Jackson. “We work hand in hand with governments and the educational and private sectors, including manufacturers and fuel suppliers. These solutions are not proprietary to FedEx. We want everyone to reduce their footprint.”
Some question corporate efforts to address climate change, even calling carbon offsets “a scam.” But as Ingrid Burke, Carl W. Knobloch Jr. dean of the Yale School of the Environment and Fred Smith, chairman and CEO of FedEx, put it in a recent editorial, “Corporations must go beyond virtue signaling and invest in pragmatic solutions.”