Many shippers in the e-commerce segment learned invaluable lessons in 2020 — siloed solutions don’t work well when scale and speed are a must. The same can be said for last-mile delivery operations. Siloed operations — where data, equipment and people are operating on different timelines — can doom the overall customer experience.
Currently, hundreds of vehicle makers — both legacy and startups — are working to bring electric vehicles to market. For the e-commerce brand or anyone else involved in the last-mile segment, having the right vehicle is only one part of the equation. It just represents another silo to manage, alongside data, fulfillment and logistics operations.
General Motors (NYSE: GM) sees this problem and is responding in an innovative way to solve this potential pain point before it happens.
To help ease this process, GM has launched BrightDrop. The startup, led by President and CEO Travis Katz, is looking to create a smarter way to deliver goods and services.
“The goal is to empower logistics and delivery companies to move goods more efficiently,” Katz told Modern Shipper.
That means not just providing an electric vehicle, but building an entire ecosystem of logistics and connectivity solutions.
The effort begins with the fully electric vehicle, the EV600, and includes an innovative electric pallet and related connected services that can help with proper picking and loading operations to ensure the delivery driver can maximize efficiency along the route.
“We’re trying to move beyond just the transportation piece … [and] really think about how you can build upon that,” Katz said.
Katz, who has spent much of his career involved in startups and technology-focused companies, including co-founding Trip.com and Fox Interactive Media, cited a “perfect storm” of issues coming together that necessitate the creation of BrightDrop. Those are the growth in e-commerce, increasing global demand for last-mile delivery (the World Economic Forum predicts it will rise 78% by 2030), and the corresponding increase in demand for delivery vans.
“That’s a big business opportunity, but at the same time, it’s creating a lot of problems,” Katz said, citing the need to grow these services without having a negative environmental impact as one. “The vehicles are an important part, but [we] actually look holistically at the problem of last-mile logistics. How do you create efficiencies through the broader flow [of goods movement].”
BrightDrop’s electric pallet innovation (EP1) is a key component of the ecosystem.
“It’s really designed to move goods over short distances — think about the back of the truck to the front door,” Katz said of the EP1. “The goal is to reduce physical strain on the labor force and reduce congestion due to trucks sitting on the side of the road unloading.”
The EP1 uses an electric hub motor that can power the pallet at up to 3.1 mph. Built on four wheels and looking like a rolling box, the EP1 features adjustable shelving and can carry up to 200 pounds.
“We have spent quite a bit of time with potential customers really understanding what challenges they are facing and what are the inefficiencies,” Katz said. “We saw the number of packages being delivered was increasing, and the more customers we talked to, the more we saw a lot of potential [opportunities].”
“That’s a big business opportunity, but at the same time, it’s creating a lot of problems. The vehicles are an important part, but [we’re] actually looking holistically at the problem of last-mile logistics. How do you create efficiencies through the broader flow [of goods movement].”Travis Katz, president & CEO of BrightDrop
As online packages and grocery orders rise, so too are the number of packages and trips delivery drivers are making to locations.
“If you are a delivery driver, instead of taking six different trips back and forth to the truck, you can take one pallet,” Katz said.
And because the pallet is electric-powered, it reduces physical strain for the delivery driver as well as errors and package touches. According to BrightDrop, a pilot of the EP1 with FedEx Express (NYSE: FDX), allowed the courier to handle 25% more packages in a day.
FedEx is planning a second pilot with the EP1 later this year.
Providing up to 23 cubic feet of space (approximately half a pallet of goods) per EP1, the system can be integrated with the connected services BrightDrop is developing. Integrating data can allow those loading the EP1 to do so more efficiently, grouping packages together by address or street, eliminating time spent locating the right package at a stop.
Ultimately, the EP1 will feature tethering capability, allowing a single operator to lead multiple units into locations such as apartment buildings.
The final part of the equation is the electric vehicle. BrightDrop’s EV600 is a purpose-built van that will offer up to 250 miles of range on a full charge with zero tailpipe emissions. BrightDrop said the van will save the operator over $7,000 per year in operating expenses compared to a similar diesel vehicle.
Because the average delivery driver gets in and out of their vehicle numerous times a day, BrightDrop is designing the EV600 with lower steps and a higher seat that makes it easier to move around the vehicle.
The EV600 offers 600 cubic feet of storage space. As part of the delivery ecosystem that BrightDrop is building, the van was “co-designed” with the EP1, providing a seamless and integrated operation of the two. The EP1, which is now available, does not require the van for operation. The van is not yet available.
The EV600 has a gross vehicle weight rating of less than 10,000 pounds and can be charged to a range of 170 miles in an hour with a 120- kilowatt fast-charging system. It uses GM’s Ultimum battery system.
EV600 connectivity provides fleet operators remote access, real-time location, battery and charging management, driver safety coaching and incident recording, remote diagnostics, safety alerts and predictive maintenance insights, and over-the-air updates.
FedEx Express will take delivery of 500 vans later this year. BrightDrop announced on Feb. 2 that Merchants Fleet, a fleet management company, had ordered 12,500 EV600s, with delivery beginning in early 2023.
“Merchants Fleet is fully committed to the future of electrification, and working to add BrightDrop EV600s to our clients’ fleets is an exciting part of our broader strategy,” Brendan P. Keegan, CEO of Merchants Fleet, said in a press release.
Katz said the use cases for both the van and e-pallet are quite broad, but they are ideal and specifically designed for local delivery operations. More importantly, they are designed in tandem to provide local delivery fleets with a full complement of solutions from a single provider.