Posted on December 17, 2024
The logistics industry is facing mounting pressure to cut costs and meet sustainability goals, making electrification an essential strategy for fleet operators.
Well placed to advocate for electrification as a long-term solution is Joe Gorman, Vice President for Europe at ChargePoint, which is on a mission to simplify the transition to electric vehicles for both businesses and drivers.
Here, Joe talks to Supply Chain Digital about rising cost pressures in logistics and why the industry is destined to go green.
Joe Gorman, Vice President for Europe at ChargePoint
Why is last-mile delivery often the most expensive and inefficient part of the logistics process?
Last-mile delivery can be challenging. As the final stage of the delivery process from the distribution centre to the customer, companies face pressure to create a seamless customer experience. During last-mile delivery, bulk shipments on trains and boats have to be divided into individual packages in smaller volume vehicles, which itself is a challenge that requires efficient organisation to avoid bottlenecks in the supply chain process. Furthermore, getting deliveries to residential doors and addresses on time requires agile fleets that are suitable for navigating complex routes.
Away from traditional fuel, what alternatives should fleet operators be considering?
With the pressure of local councils, particularly in London, enforcing ultra-low and low emission zones, delivery companies may consider electric fleets for last-mile delivery. Almost four in 10 (39%) fleet decision makers identify implementing zero-emission policies as their top challenge, which can be rectified by considering electric or hybrid vehicles rather than traditional combustion fuels. The switch can be supported by newer charging technologies which are smarter than ever before. For example, modern charging software enables fleet operators to optimise total cost of ownership (TCO) by activating charging at the cheapest times of day, amongst other cost-saving features.
How crucial is it that fleet operators explore the prospect of electrification?
Not only is the UK government implementing stricter emissions regulations to combat climate change, consumers are increasingly upholding sustainability as a priority, meaning it may impact the businesses they choose to shop with. In a 2023 survey, it was found that three in five (60%) of UK consumers valued sustainable delivery options. To meet both governmental and customer expectations, it is crucial that fleet operators explore electrification.
Many businesses may also consider electrifying their fleets to lower TCO, as charging optimisation ensures electric vehicle charging is more affordable than fossil fuels. In a wider transportation context, the shift towards EVs is inevitable. Businesses should start realising the benefits and cost savings today–there’s no benefit to waiting. Early adoption of electrification will help fleet operators stay ahead of the curve and avoid being left behind.
In addition to the obvious sustainability benefits, why is electrification a long-term solution?
Electrification can help businesses achieve greater energy security and reduce costs. Relying on domestically generated energy rather than fossil fuels helps fleet operators control the cost of their energy use, as they are able to charge at optimal times of the day and benefit from commercial energy prices. Furthermore, the technology surrounding EVs and charging infrastructure is rapidly evolving for the future. For example, battery technology is significantly improving, leading to increased range and decreased charging times to help drivers travel further and charge up quicker.
ChargePoint’s mission is to simplify the transition to electric vehicles. Picture: ChargePoint
Can you give us some real-world examples of companies successfully electrifying their fleets?
ChargePoint has supported Daimler Buses, the parent company of Mercedes-Benz and Setra buses, to go electric and enhance their customer’s fleet management. Working closely with Daimler’s fleet operators, we integrate our telematics software and charge management systems to help the team manage electric and mixed-fuel fleets more efficiently through real-time data and insights.
We’ve also worked with companies such as Arval, a vehicle leasing company, to accelerate their customer’s transition to EVs, providing them with full control of EV management and automated EV recharging.
What does the future of green logistics look like?
The transition to EVs is gaining momentum, driven by industry developments and government policies. For example, advancements in battery technology are enabling drivers to travel further, instilling confidence in more people to make the switch. Additionally, government policies, such as the 2030 ICE ban, are urging both people and businesses to go electric. The shift towards electric fleets is setting businesses up to be able to significantly reduce their greenhouse gas emissions.
In tandem, companies are increasingly focusing on building sustainable supply chains by optimising routes, reducing packaging waste and collaborating with suppliers who share their sustainability goals. Creating greener supply chains is also significantly important to customers, who are increasingly deciding to engage with sustainable brands only.
