How delivery firms are making the last mile electric

Of the millions of delivery vehicles that drive through the streets of Europe’s cities each week, a growing number are going electric.

As global couriers and retail giants take steps to become more energy efficient, more of them are turning to electric vehicles for the last mile section of the delivery journey. IKEA, for example, is aiming to have 25 percent of its last-mile deliveries made by electric vehicles by 2025.

“Last mile is the obvious and natural first step for EV delivery services,” says Tim Clement, UK Industrial and Logistics Director and part of the City Logistics Team. “Progress is needed in electric vehicle innovation before larger, longer distance vehicles are able to rise to the challenge.”

For now, it’s the inner cities that are the test bed. In Germany, Deutsche Post has an agreement with electric vehicle maker Streetscooters, while courier firm DPD is aiming to have its entire inner-city Hamburg fleet electric by this summer. DPD recently opened its third all-electric depot in central London for last-mile delivery.

Royal Mail, meanwhile, is trialing electric three-wheel trikes on delivery routes in three of the UK’s smaller cities during the summer of 2019.  

“Large household delivery names are leading the charge as the cost of investing in electric vehicles decreases and the technology and infrastructure improves,” says Clement. “It’s having an impact not only on energy consumption, but also on warehousing. Needs are changing.”

Charging is one of the key considerations; substations with charging points for vehicles need to be incorporated into existing warehouse plots. While it won’t necessarily change the structure of many existing buildings, those with more space available will be a step ahead, says Clement.

“In inner-city locations, there’s already a pressure on occupiers in terms of space and overall physical footprint,” he says. “So there will need to be some serious consideration given to precisely where vehicles are charged overnight.”

The move to electric vehicles on Europe’s roads is fast gaining momentum as consumers become more conscious of the environment and increasingly opt for buying goods and services from companies that align with their values.

In addition, ambitious corporate social responsibility goals are putting a greater emphasis on large firms to hit low emission targets; UPS was recently picked out for its efforts in decreasing the environmental impact of its distinctive brown vans. Plus, it encourages competitors to follow their example. 

“The example being set by global couriers will ultimately be followed by smaller delivery firms,” says Clement. “There needs to be a cost benefit too - companies of all sizes are then likely to take the initiative.”

Warehouse owners, too, have a role to play. In Paris, French developer Sogaris, which is part-owned by local Paris region authorities, incentivised tenant Chronopost to use more electric delivery vehicles when the two parties agreed a lease at a site in the French capital in 2013. Over the course of the lease, EV use is being incrementally increased, with a cost advantage in the rent for Chronopost in return.

While electric delivery vehicles are an important step forward, the source of the energy itself is just as relevant, says Clement. Warehouses that can use renewable energy to power their fleets will have an even greater impact. A German storage facility built by Goldbeck Solar and used by medical products distributor Medline International, for example, is powered by photovoltaic energy system.

Equally, there is an urgent need for a universal adaptor for charging.

“It’s a stumbling block for wider use,” Clement says. “And not unlike the clash of cabling one finds between Android or iPhone users.”

As more companies roll out electric vehicles and the supply chain becomes greener, there could be a point where EV charging facilities are a deciding factor in the leasing discussion between tenant and landlord.

“That’s five to 10 years away,” says Clement, who believes that more action by local and national governments will drive further EV usage. “But certainly, such factors could be deal makers or breakers for landlords in the not-too-distant future.”