Electrifying logistics: the future of fleets, autonomy and alternative fuels

ELECTRIFYING LOGISTICS

the future of fleets, autonomy and alternative fuels

The future of mobility is changing. From electrification to autonomous systems, the fleets that make those critical final mile deliveries are rapidly evolving to improve efficiency and sustainability. Using autonomous vans and robots in combination to drop off parcels or groceries sounds like science fiction but it’s already technically feasible, according to Martin Kosch, a research associate from TU Delft.

His research project in Berlin, backed by the German government and industrial partners, used an autonomous van and autonomous delivery robot in combination to deliver parcels across the city, yielding a lot of lessons about the next steps for these fast-emerging technologies. The robot covered around 80km during the course of the project, with 78% of those journeys being autonomous and 22% requiring human operator, which is a skilled new role emerging from the automation of final mile delivery.

[Fully autonomous parcel delivery] is definitely technically feasible but there are still a lot of issues to be fixed before it’s economically feasible.

Martin Kosch
Research Associate,
TU Delft

‘It’s technically feasible but there are still a lot of issues to be fixed so that it’s economically feasible,’ says Kosch, citing issues around customer handover, software complexity, unanticipated challenges (the shift from winter to summer sees the arrival of pavement furniture, for example) and, perhaps the biggest, regulation. ‘It took two years just to adjust to new regulations…this really hinders the scaleability.’

Autonomous delivery vans and delivery robots are still some way from being mainstream. ‘It’s a really early stage, with pilots underway but no large-scale deployment,’ says Kosch, noting that while autonomous robot deliveries may make sense with ready to eat meals and groceries, it’s harder to make the business case to invest for ‘dirt cheap’ parcel deliveries.

Unlike autonomy and robotics, the impact of electrification is already evident across many fleets. With growing scale, comes advances in technology and reductions in costs – although the business case for electric vehicles remains a market-by-market calculation for many logistics providers.

‘Five years ago we had vehicles running 125 km and today we now have large vans running 450 km per charge,’ says Jacob Senger, Head of Fleet and Material at PostNord, noting there’s intense customer pressure for deliveries to be green but little appetite to pay for it. ‘This is when we as an industry need to stand together.’

In a highly competitive marketplace, it’s hard to make the case for more expensive fleet.

‘We are in a price war at the moment, especially in the UK,’ notes Rich Pleeth, Co-Founder at Fin, who says the current political climate may make the investment case for fleet upgrades even harder.

When it comes to middle mile heavy road haulage, the industry is currently relying on fleet utilisation to reduce emissions – the European Modular System, for example, can yield 30% reduction in emissions – while piloting various alternative fuels, which depending on the feedstock used and the production process, hold out the promise of carbon neutral or even carbon negative combustion.

We caught up with Lars Purkarthofer, Director of Public Affairs at UPS, to ask how he sees the fleet composition at UPS evolving:

‘When it comes to well-to-wheel emissions, they can be reduced by 80% to 100% if we’re using biomethane,’ says Lars Purkarthofer, Director of Public Affairs at UPS.

Electrification remains economically unfeasible given the high upfront costs of buying an electric truck compared to a conventional diesel truck.

‘That really needs customer brand pressure and government support as well,’ says Rich Pleeth, Co-founder & CEO of Fin, who says electrification for now is focused on the final mile, the most polluting leg of the supply chain – using e-vans and e-cargo bikes.

‘But it’s a huge challenge,’ he acknowledges, given the customer reluctance to pay more for green solutions.

E-cargo bikes were seen as a ‘green bullet’ for the urban final mile, offering quicker and more efficient drop-offs by using cycle lanes and avoiding parking and congestion issues. But the reality is proving more challenging.

We have had a lot of issues with proof of concept for e-cargo bikes. The TCO in general is terrible.

Jacob Senger
Head of Fleet and Material, PostNord

‘We have had a lot of issues with proof of concept,’ says Jacob Senger, Head of Fleet and Material at PostNord, noting that heavy or large parcels didn’t fit the cargo locker and the early ones cost almost as much as an electric vehicle when capex and opex were added together. ‘The TCO in general is terrible.’ This may be on the cusp of change, however. Customer buying behaviours are changing, resulting in lighter, smaller parcels that are better suited to an e-cargo bike.

92% of parcels delivered in cities can fit in our e-cargo bikes.

Rich Pleeth
Co-founder & CEO,
Fin

‘Parcel sizes are coming down so we can get 120-150 parcels on our e-cargo bikes,’ says Rich Pleeth of Fin, which has a fleet of 102 e-cargo bikes. ‘Ninety-two per cent of parcels delivered in cities can fit in our e-cargo bikes. You need to make sure you are getting the right mix of customers to get the right kind of parcels.’

The bikes also offer a real and very tangible benefit in terms of cutting congestion and pollution in cities, which is good news for everyone.