1. © 2005 FedEx. All rights reserved. Going Green Saves Green Environmental Commitment at FedEx Larry Adkins Arkansas Trucking Association Maintenance and Technology Council October 14, 2008

2. 2 FedEx Corporation

3. 3 FedEx LTL Companies FedEx Freight is a leading U.S. provider of next- and second-day regional, less-than-truckload (LTL) services FedEx National LTL serves the long-haul LTL sector throughout North America. The long- haul sector is typically defined as LTL pick-up and delivery service completed in three or more days FedEx Freight Canada provides a seamless shipping solution in and out of Canada in addition to all-points coverage throughout the country with fast transit times and reliability customers expect from FedEx

4. 4 Global Supply Chain The challenging dynamics of supply chain management Fast-cycle logistics Just-in-time inventory Tight capacity and congestion at world ports Short supply of ocean vessels Skyrocketing fuel prices Railway and trucking capacity issues (vehicles /qualified drivers) Customs clearance International security regulations Threat of terrorism

5. 5 Global Supply Chain How do you thrive in this changing environment? By taking a sustainability-based approach to problem solving and change management.

6. 6 Sustainability What is sustainability? Sustainability is meeting the economic, environmental and social needs of the present without compromising the ability of future generations to meet their own needs. Whose needs must be met? Customers Employees Shareholders Communities

7. 7 Sustainability FedEx recognizes that effective environmental management is one of its most important corporate priorities. FedEx is committed to the use of cost effective innovations and technologies to minimize atmospheric emissions from its operations and services. FedEx strives for efficient use of natural resources to minimize waste generation through efforts that include recycling and pollution reduction. A Long-Term Environmental Commitment

8. 8 Equipment

9. 9 Supporting GHG Reduction Utilize two Hybrid Class 7 Kenworth trucks in California EPA SmartWay Transport Partner since 2004

10. 10 Equipment Uses compressed air from the trailer to inflate any tire that falls below its appropriate pressure Every 10 PSI of under- inflation will result in a 1% reduction in MPG Automatic Air Inflation System for Trailing Equipment

11. 11 Equipment Used in place of two standard tires. Improves roll resistance 0.2 MPG improvement per axle 3x life of standard tires with same cost (in dolly application) OR and FL prohibit use on triples, complicating fleet management. Wide-Base Tires

12. 12 Equipment Burning fuel while not moving decreases fuel economy Limit idle time through use of idle management system that decreases engine idle times below 3 minutes Engine idling policy limits length of time power units may idle while parked Engine Idling

13. 13 Equipment Implemented education for drivers on attaining maximum fuel economy The driver impacts fuel economy by approximately 30% through speed, acceleration, shifting, and idle management Driver Education on Fuel Economy

14. 14 Equipment Assembling multi-vendor research partnership to determine how to remove load on engine due to parasitic devices (e.g. alternator, air conditioning, water pump, etc.) Parasitic Drag Reduction

15. 15 Equipment Extensively tested zero-emission hydrogen- powered forklifts. Excellent performance, however ROI unsatisfactory due to cost of fuel cell. Hydrogen Fuel Cell Forklifts

16. 16 Facilities

17. 17 Completed installation of solar panels at two California facilities Systems will provide up to 54% of facility power needs using renewable sun power Reduce CO 2 emissions by 610 metric tons per year with positive NPV Facilities Solar Power

18. 18 Converted dozens of facilities from Metal Halide to T5 and T8 fluorescent, reducing lighting-related energy consumption by up to 65% Improved visibility and safety in the working environment with payback < 2 years Facilities Lighting Retrofits – Interior

19. 19 Worked with lighting manufacturer on custom LED load light solution that reduces energy by 92%. Over 4,000 fixtures installed or scheduled. Continued program of lighting upgrades at 19 additional centers with $1.3 million capital investment. Maintenance and energy savings create payback < 2 years. Facilities Lighting Retrofits – Load Lighting

20. 20 Implemented pilot program to replace standard site lighting with more efficient pulse-start metal halide lighting Improves site visibility and safety and reduces energy usage up to 20% Also testing LED area lighting Facilities Lighting Retrofits – Exterior

21. 21 Engaged third-party provider to track electricity and gas usage across all facilities Essential for benchmarking facility performance and measuring impact of facility upgrades Facilities Utility Management

22. 22 Created “Energy Watch” program to increase awareness and engage employees in conservation efforts Employees have changed 10,000+ (to date) incandescent bulbs to CFLs Communication Employee Engagement

23. 23 The Power of the Bundle