United Parcel Service, the worlds largest package delivery company, reportedly said three trucks powered by hydrogen fuel cells began carrying its packages in the United States on Thursday, and it hopes increased use of the alternative-fuel trucks one day will help it save on fuel costs and cut emissions.

This spring's surge in crude oil prices to above $US40 a barrel forced UPS to spend $320 million on fuel in the last quarter, a jump of 29% from the previous quarter, UPS transportation official Chris Mahoney told Reuters.

The report noted that package carriers are able to pass some of the surging fuel costs to customers, but it is still a large concern. "We have some hedging strategies, and that helps us going a forward, but it is certainly a concern to all of us," Mahoney reportedly said.

According to Reuters, the Dodge Sprinter trucks are equipped with fuel cells built by Canadian company Ballard Power Systems and will carry packages for UPS in California and Michigan. The trucks will have a range of about 160 miles (250km) per fill-up of hydrogen, slightly above the range for traditional UPS trucks driven in suburban situations.

Hydrogen-fuelled automobiles will not be a salve to high oil prices until at least well into the next decade, experts say, according to the news agency. While hydrogen is the most abundant element in the universe, production and storage of pure hydrogen gas is expensive. And partly due to the lack of large scale production, the cost of producing a single fuel-cell automobile can run to hundreds of thousands of dollars.

"The initial costs obviously are quite high," Mahoney told Reuters, though he would not say how much the new trucks cost. "The greater base and more density we have, the more the costs will come down."

The delivery company has 88,000 vehicles in its fleet, the report said.

Mahoney reportedly said a network of hydrogen refuelling stations also needs to be built in order for fuel-cell vehicle use to grow.

"The refuelling infrastructure is going to be a critical need going forward. Until we can make hydrogen refuelling as broadly available as we make diesel and gasoline, it will be difficult for passenger fleets and commercial fleets to reap the economic and environmental benefits this type of technology can offer," he told Reuters.

The news agency said California currently has about 10 hydrogen fuelling stations, mainly for commercial fleets.

The nation's first station that will sell hydrogen to the public will be completed this autumn in Washington, DC, by Shell Oil and General Motors, Patrick Serfass, spokesman for the National Hydrogen Association, told Reuters. That filling station will be used by the US Postal Service, which is leasing a fuel cell vehicle from GM.