UPS said it would use the investment to add nine LNG fueling stations to its fleet, bringing the total number in service to 13 by the end of 2014.
David Abney, chief operating officer for UPS, said his company was capitalizing on natural gas as a viable fuel source.
"The UPS strategy is both environmentally friendly and economically viable," he said in a statement Wednesday. "LNG is becoming more readily available, plus it's more insulated from market volatilities than diesel fuel."
UPS said the overhaul would support approximately 1,000 UPS LNG tractors and substitute for the use of 24 million gallons of diesel fuel each year. Abney said the UPS fleet represents about 35 percent of the corporate carbon footprint.
"By 2017, our goal is to reach 1 billion miles driven by our alternative fuel and advanced technology fleet," he said.
UPS started using LNG for parts of its fleet in 2002.
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