Jeff Bezos has become the king of e-commerce, with Amazon (NASDAQ: AMZN) accounting for anywhere from 35% to 48% of online sales, depending on the source of the information. Moving all those packages results in a significant environmental impact, although Bezos believes e-commerce is actually more environmentally friendly than in-store shopping.
“Amazon’s sustainability scientists have spent more than three years developing the models, tools, and metrics to measure our carbon footprint,” Bezos wrote in a shareholder letter in early 2020. “Their detailed analysis has found that shopping online consistently generates less carbon than driving to a store, since a single delivery van trip can take approximately 100 roundtrip car journeys off the road on average.”
Amazon is pushing to have 10,000 Rivian electric vehicles (EVs) on the road in 2022 and 100,000 by 2030. Not everyone is Amazon, though. Roughly 60% of e-commerce is conducted by companies other than Amazon and Walmart (NYSE: WMT), and that requires a large fleet of independent or small fleet delivery drivers to move those goods.
Getting that segment of vehicle owners to invest in electric vehicles might be a tougher task than Amazon converting its fleet, but it is one that many companies are attempting.
“When the driver can put more money in his pocket, do what he does safer and healthier, that is a real benefit that starts the ball rolling,” Chris Jarvis, chief logistics officer for Canadian last-mile delivery company GoFor Industries, told Modern Shipper.
Jarvis said retail is dramatically changing, with more retailers utilizing physical stores in addition to micro-fulfillment centers to feed e-commerce. The result is more businesses needing more access to last-mile delivery drivers, and with about 50% of shipping costs for an e-commerce item related to transportation, there is substantial opportunity to lower costs.
GoFor drivers deliver a variety of items, including packages and furniture. Among its clientele is Purolator, Sherwin-Williams, Dulux Paint, Benjamin Moore Paints, Ikea, Home Depot, HD Supply and Fastenal. To help GoFor drivers, who are all independent contractors, fulfill these on-demand orders, the company offers dispatching services, routing assistance and more, connecting drivers with vehicles to goods that need to move.
Jarvis said GoFor cargo vans use about 200 gallons of fuel per month, so “we have a responsibility” to address that environmental impact.
“We need to get to the owner-operator who has the cargo van today and support him through this transition,” he said.
“What we need to do to help drivers is remove the complexity. We need to give drivers a bundled solution. Where do you go to get maintenance done? Where do you go to get charging? You need to provide some certainty.”Chris Jarvis, chief logistics officer for GoFor Industries
“The big fleets that have used electric vehicles have seen significant benefits for driver retention, safety and health,” Ian Gardner, founder and CEO of Royale EV, said in a January statement announcing the agreement. “What’s driving all these companies is total cost of ownership.”
Jarvis told Modern Shipper the key is showing the owner-operators the overall value an electric vehicle offers.
“What we need to do to help drivers is remove the complexity,” he said. “We need to give drivers a bundled solution. Where do you go to get maintenance done? Where do you go to get charging? You need to provide some certainty.”
Jarvis said there were no plans as of now to mandate the use of electric vehicles to work with GoFor. Rather, the hope is to create a collaborative environment so owner-operators can see the value and adopt the technology. Part of that is partnering with Royale EV to make vehicles available.
“We can give them pretty clear [operational] measurements through our technology so they know where they stand,” he said, noting the company’s GoFleet program, which recognizes the “most outstanding drivers.”
“We think that with GoFleet … and with some economic incentives, it will really set the goal for EVs,” Jarvis added. “The top drivers will see these benefits and start to convert.”
Some customers are looking for more sustainable delivery solutions, and GoFor is trying to help assist those needs, Jarvis said.
“We are seeing such change. We are entering a delivery-first world and [need sustainable solutions] we can support at a larger scale,” he noted.
As Amazon electrifies its fleet, Jarvis said the pressure will build on other retailers and last-mile delivery providers to compete.
“There is a lot of activity — I’d say a mad scramble — for retailers to provide last-mile delivery and compete with Amazon Prime,” he said. “It’s hard to imagine that electric vehicles won’t be something that expands just as rapidly.”