UPS adds carbon offsets to shipping menu

By Rachel Tobin Ramos

The Atlanta Journal-Constitution

UPS is offering customers a chance -- for a fee -- to offset the environmental effect of shipping their packages across the country or around the world.

The Sandy Springs-based shipping giant announced that its 1 million online account holders can buy a so-called carbon offset for their shipping, at a cost of 5 cents for ground packages and 20 cents for those shipped by air.

UPS also is offering an audit that will customize a carbon offset program for large shippers.

So what is a carbon offset? UPS describes it as a financial instrument aimed at reducing greenhouse gas emissions. A company that emits more carbon can buy an offset from a company that has diminished its carbon use.

UPS will buy the carbon offsets through a third party that will in turn invest in waste water treatment, reforestation and landfill methane mitigation projects, said Bob Stoffel, UPS's senior vice president of engineering, strategy, supply chain and sustainability.

UPS will match the offset purchases  in 2009-2010, up to $1 million.

The carbon offset concept arose several years ago as environmentalists began to campaign to cut carbon emissions. Some companies responded with ways to purchase carbon offsets.

Stoffel said UPS models showed even a single-digit percentage of customers participating would have a huge impact -- even more than the purchase of low fuel emission vehicles.

"I think it's cool," he said. "If it has a low take rate initially, it will gain momentum."

So far, he said, UPS has gotten interest from a broad base of large shippers, from financial services  to consumer electronics and retail apparel. UPS will expand the program worldwide in about a year and a half, he said.

Doug Caldwell, a principal with ParcelResearch.com, an Oregon-based consulting firm, said UPS is the first shipper with a carbon offset program in the United States. European rivals like DHL and TNT have offset programs, he said.

He thinks it could drive shipping sales to UPS from companies that want to improve their environmental credibility. "Green" products and methods of doing business have become important marketing hooks for some companies.

Mitch Jackson, Memphis-based FedEx's director of environmental affairs and sustainability, said FedEx prepares carbon footprint reports for customers who want one, but added, "We haven't considered asking our customers to pay for off-setting the emissions."

Caldwell said companies like Nike and Patagonia disclosed carbon emissions created by their products for several years. Delta Air Lines lets fliers purchase a carbon offset.