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UPS Pushes Towards Carbon-Free Fleet

American logistics and delivery service provider United Parcel Service (UPS) has taken another step towards its green initiative, and started the trial of eQuad electric bikes for delivery in urban areas.

Shares of UPS closed down 3.7% at $206.64 on April 1, amid a broader market sell-off. UPS stock has lost 2.5% year-to-date, and gained 22.9% over the past year.

eQuad Bikes for Urban Deliveries

The last-mile delivery provider has vowed to become a 100% carbon-free company by using electric vehicles for its deliveries. The company already has a fleet of zero-emission vans and trucks for delivery and is trying out eQuad bikes for faster, easier and cleaner deliveries in densely populated urban areas. What’s more, in the wake of the burgeoning e-commerce market, these bikes even make the package delivery business less expensive.

These eQuad electric bikes are designed by British firm Fernhay. UPS has around 100 such bikes, which are used across seven locations in Europe, and it is expected to start using them in the U.S. and Asian markets soon.

UPS’s eQuad bike has an electric-assisted top speed of 25 kilometers and can carry up to 200 kilograms of packages, if the driver pedals faster. The electric battery has a range of about 40 miles, which is sufficient for urban routes.

The eQuad bikes are narrow, only 36 inches wide, making them ideal and legal to use bike lanes and pedestrian walkways, a route that UPS vans and trucks cannot take. While using these bikes, the driver will have to manually load the packages and carry them to customers.

Commenting on the eQuad bike trials, UPS VP of fleet maintenance and engineering, Luke Wake, told Reuters, “There are more and more opportunities for zero-emission solutions like this that can alleviate inner-city congestion… It can also help our operations be more efficient at the same time.”

Wall Street View

The Wall Street community is cautiously optimistic about UPS stock, with a Moderate Buy consensus rating based on 11 Buys, eight Holds, and one Sell. The average UPS price forecast of $241.35 implies 16.8% upside potential to current levels.

The company pays a regular quarterly common dividend of $1.52 per share and currently has a dividend yield of 2.13%.

Blogger Opinions

Notably, TipRanks data shows that financial blogger opinions are 96% Bullish on UPS, compared to a sector average of 69%.

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