The role electric trucks can play in Santa’s supply chain

Electric trucks, like this Fuso eCanter model, will increasingly play an important role in urban delivery operations.

Electric trucks, like this Fuso eCanter model, will increasingly play an important role in urban delivery operations.

Santa may not be concerned with his environmental footprint (thanks, of course, to his power source - eight friendly reindeer, and nine on those foggy Christmas Eves), but fleets are increasingly focused on reducing theirs and cutting fuel usage. Electric vehicles, particularly medium-duty trucks and those vehicles used in e-commerce and last-mile delivery, represent prime opportunities to achieve both goals. And with the boom in e-commerce, especially around the holidays, electric offers a potential game-changing opportunity for the supply chain – even Santa’s.

“What’s key is that we make these trucks and infrastructure [projects] successful in these early pilots,” said Mike Roeth, executive director of the North American Council on Freight Efficiency (NACFE), during a Friday webinar. “The places where electric trucks make the most sense is where they should be.”

Roeth spoke about NACFE’s work and medium-duty electric truck potential during the webinar, sponsored by Alternative Clean Transportation News (ACT News) and NACFE. Joining Roeth on the call, titled “Santa’s Carbon Footprint: It Takes More Than Reindeer These Days,” was Jessie Lund, an associate with the Rocky Mountain Institute (RMI) and Scott Strelecki, senior regional planner, Southern California Association of Governments (SCAG).

Roeth noted that the adoption of electric vehicles will be slow, and all the speakers said that urban, last-mile delivery makes the most sense right now, but that technologies are changing fast and the idea that electric vehicles need to achieve parity with diesel-variants is a myth.

“I was kind of shocked how the batteries have come so far in these electric trucks; how they perform and the range they [can provide],” Roeth said, referencing NACFE’s October Guidance Report on medium-duty electric trucks, which is part of a series of reports NACFE is producing on electric vehicles.

He noted that people expect electric trucks to perform exactly as diesel trucks, but that is not necessary, at least in urban delivery, where packages are typically lighter in weight.

“In some cases, like weight, parity isn’t even needed,” Roeth said. “Many medium-duty trucks never gross out, maybe in linen [applications] they gross out … but most medium-duty trucks never gross out.”

The push to electric vehicles is being driven by several factors. One is the desire for communities to reduce greenhouse gas emissions. Another is an operational objective of fleets to operate the most cost-efficient vehicles. But a third reason is the growth of e-commerce.

In 2000, e-commerce sales barely registered in total retail sales, but by 2018, they represented about 10% of all retail sales. They are expected to grow to more than 25% by 2027 (optimistically) and just above 15% pessimistically. Strelecki said those sales will grow from $300 million in 2014 to a projected $1.2 trillion by 2030.

 All those packages are increasing demand for smaller, urban delivery vehicles, and also for more efficient ways to deliver those goods. Still, there are barriers and concerns to adopting electric vehicles.

“We’re finding as we do all this research … that infrastructure is emerging as one of the top questions, and even barriers for fleets,” Lund said, noting a UPS (NYSE: UPS) report that found a lack of charging infrastructure is the second most common barrier among fleets to commercial adoption.

“These [medium-duty] fleets tend to rely on return-to-base charging,” she added, “where they need full control over their charging infrastructure to ensure they have access to it when they need it.”

But simply adding a charging station to a facility can be a mistake.

“Understanding what kind of charging infrastructure you need is very important,” Lund said. “If you have a couple of hours to charge, or need a couple of shifts, it will change what kind of infrastructure you need.”

Among the things to consider:

  • Is there existing infrastructure at the facility?

  • What kinds of vehicles need to be charged?

  • How many vehicles need to be charged?

  • How depleted are the batteries likely to be and how much charge is needed?

  • How long do the vehicles have to charge (dwell time)?

  • What is the cost of electricity at location? Are there demand charges (when you are charged higher rates for pulling more electricity off the grid at once) or time of use rates?

 Answering those questions will help in determining the best approach to take, but also incorporating as many people in and outside your organization in the process helps.

“Electrification, at least for commercial fleets, is something that even the leading fleets are just dipping their toes into,” Lund pointed out. “You really need to bring in people across your company” to make it successful.

Lund also advised not to focus so much on comparing charging station companies during the RFP process, but rather on what is needed to make a successful deployment work. Other barriers that must be overcome include distribution infrastructure upgrades, which may be needed in some areas, and the slow pace of regulators and utilities.

“If you know you’re are interested in electric trucks or even have some on order but haven’t received them yet … engage with your company and utility to make sure everything is ready,” Lund said, also suggesting that fleets start small and scale from there.

Also invest in “smart load management technology” that can help a fleet manage its electrical loads and costs, and seek out state and utility incentive programs.

Lund directed listeners to the ACT News website, which has links to incentives and grant opportunities. She also noted that many cities may have their own urban freight plans and offer localized incentives.

“Electric trucks are the only investment that gets cleaner as the grid gets cleaner,” she said, touting a Union of Concerned Scientists and Greentech Media study which said that running an electric truck – even one operating off a coal-based electric grid – is still cleaner than running a diesel truck.

Roeth concluded by saying that the incentives are not really what is driving interest in electric trucks. “Fleets are believing in the technology before the incentives,” he said. “They are already thinking of doing this and using the incentives to help scale. The incentives are not the reason to do it, but they are a major help.”