With sustainability initiatives popping up all over the transportation and logistics industry, it’s only natural that attention would turn toward over-the-road transportation and its diesel emissions.
While diesel-powered medium- and heavy-duty vehicles represent only 5% of road traffic, they account for more than 20% of emissions. Additionally, truck traffic in and out of busy ports like the Ports of Los Angeles and Long Beach contributes to overall emissions, which have been linked to higher incidences of cancer and asthma in surrounding areas.
Recent advances in electric vehicles—including semis, box trucks, and delivery vans—offer the transportation industry an appealing alternative.
Some of the industry’s biggest names are dipping their toes in the water—and making significant investments. UPS, in particular, has been vocal about its use of both electric and alternative energy vehicles. In its plan to cut its greenhouse gas emissions by 12% throughout its ground operations, UPS has committed to adding one alternative power vehicle for every four it adds to its fleet. The company sees electric vehicles as a smart return on investment, citing an 80% drop in electric battery prices, lower total cost of ownership, and increased efficiency from electric engines.
Anheuser-Busch and Walmart are also making moves toward electrifying their fleets, and they’re not alone. A study conducted by the construction and real estate development company Mortenson at a recent alternative energy conference revealed that nine out of ten fleet owners surveyed have either initiated a vehicle electrification feasibility study or plan to do so in the next two years.
And it’s not just the private sector that’s expressing interest in electric vehicles. The USPS also recently unveiled a new mail truck that can be fitted with both gasoline and electric drivetrains, set to enter their fleet in 2023. Additionally, the California Air Resources Board has partnered with Volvo Trucks and 14 other companies to advance progress in electric transportation.
However, there are a few key challenges left to hurdle before we can expect to see even more widespread adoption of commercial vehicles.
Challenge #1: Limited Range
One of the major drawbacks facing today’s electric vehicles is range. Volvo’s electric semi-truck is expected to clock only 150 miles on a single charge. Although a 150-mile range might not work for a company focused on long-haul trucking, 67% of freight in the U.S. moves less than 250 miles. An electric truck with a shorter range could work quite well for companies doing short-haul, last-mile deliveries or those simply moving items from the port to the warehouse.
Additionally, there are hints of extended range on the horizon. Elon Musk asserted that the Tesla Semi could drive as many as 621 miles on a single charge, and Nikola’s Tre battery-electric semi-truck is promised to deliver a range of up to 300 miles. However, the Tesla Semi production is currently on hold, and the Nikola Tre won’t start delivery until Q4 of 2021.
Range aside, fleet managers will still need to find a place for these electric vehicles to charge each night, which acts as a reminder that overseeing electric vehicles comes with an entirely new set of logistics.
Challenge #2: Fleet Management
Electrifying a fleet requires identifying an entirely new set of standard operating procedures. At its most basic level, charging a fleet of electric vehicles simply takes longer than fueling a vehicle with diesel. Additionally, taking a fleet electric will involve tasks such as retrofitting an existing space with a charging infrastructure and ensuring that the local energy grid is up to the task.
Additionally, an electric fleet comes with a new set of risks to be managed. For example, what happens if bad weather disables the power grid? In light of recent rolling blackouts in California and the recent power crisis in Texas, fleet managers will have to develop backup plans to keep their fleets operational.
And what if an unexpected delay crops up, and one of the fleet isn’t able to make it back to home base in time to charge? Without a strong nationwide charging infrastructure, keeping a truck at the end of its range operational isn’t as easy as stopping at the nearest diesel pump.
After many years of managing diesel-powered fleets—and understanding the potential challenges in that arena—moving to this new power source will require a whole new set of management strategies to ensure the fleet operates smoothly.
Additionally, on a more basic level, not everyone is convinced that the economics of an electric fleet makes sense.
Challenge #3: Return on Investment
Put simply, electric vehicles tend to cost more upfront. However, the companies who have gone big on electric vehicles hope to recoup these costs in terms of lower maintenance and operating costs. UPS is optimistic in their estimates, projecting 20% lower operating costs for an electric fleet vs. a diesel one.
That said, if the cost of batteries continues to decline—one projection suggests another 50% drop in the next ten years—then the upfront outlay for electric vehicles may actually drop below that of diesel-powered ones. This would make electric vehicles an even more attractive investment for many companies.
The Rise of Diesel Alternatives
As interest and demand for cleaner alternatives to diesel fuel continue to rise, there’s still significant debate around which particular technology will emerge as the dominant choice. Within the electric camp, you’ll find those who believe in the battery-electric trucks debating those who believe fuel-cell electric trucks are the future. Others tout compressed natural gas, which has been adopted by many municipal bus fleets. Still, others think it makes sense to focus on hybrids, which offer a fallback position if a vehicle can’t make it to a charging station in time.
Regardless, the emergence of a cost-effective and environmentally-friendly alternative to diesel fuel offers a number of possibilities to the logistics and transportation industry. As more private companies and public entities invest in the emerging technology, there’s plenty of upside to go around.
Have questions about harnessing emerging technologies within your operation? Our experts would be happy to help. Just get in touch with us for a free consultation. We’d be happy to work with you to evaluate potential investments and uncover potential new efficiencies.