Fleet Electrification Offers Opportunity in Shipping

Trucking, Transportation, SustainabilityElectrification is driving transportation to become more sustainable and innovative. For shipping and logistics managers, electric trucks (e-trucks) offer opportunities to advance supply chain efficiency, decrease operations and maintenance (O&M) costs, improve driver safety, adhere to carbon emission regulations, and potentially monetize energy by establishing predictable long-term costs and grid services.The market for e-trucks is expanding as the decreasing cost of battery storage and improved battery performance make electric heavy-duty fleets a cost-effective reality. From 2010 to 2018, the average cost of a battery pack fell 85% to $176/kWh, and is expected to trend downward to $62/kWh by 2030.Several companies are piloting e-trucks: Daimler, with its all-electric eCascadia and eM2 106, has committed $3.2 billion to e-fleet technology. Volvo, with its VNR Electric truck, has committed $1.7 billion and launched its Volvo LIGHTS program to transform freight operations. Tesla has at least 2,000 pre-orders from companies such as Anheuser-Busch, PepsiCo, and Walmart for its all-electric battery-powered Class 8 semi-truck. With vehicle inventory fast approaching, shipping and logistics managers can weigh the benefits of employing electric fleets:Lower operating and maintenance costs. Although concerns focus on the high vehicle and charging infrastructure costs, estimates peg an e-truck’s total lifetime cost at only 2% higher than a diesel truck, with 37% lower fuel costs and 46% lower maintenance costs.Safety and operational benefit. Quiet and fumeless, e-trucks offer a better driving experience, improving driver retention. On-board telematics can also monitor driving habits, encouraging safe driving.Adherence to emissions standards. The U.S. e-commerce and delivery sector consumes 5.4 million gallons of diesel per day, which the Greenhouse Gas Equivalencies Calculator equates to 55,000 metric tons of carbon emissions. As a result, regulators are passing strict emissions regulations, driving shipping and logistics companies to deploy quieter, cleaner fleets.With this in mind, it’s no surprise that the number of e-trucks in the U.S. is expected to increase 27-fold to more than 54,000 e-trucks by 2025.Shipping and logistics managers may also see e-trucks open the door to new business advantages. For example, e-fleets may look to monetize energy (e.g., “energy as a service”) as advancements in vehicle-to-grid (V2G) capabilities enable peak shaving, demand-charge management and revenue streams. E-fleets can also share infrastructure, allowing multiple tenants to cost-share one charging hub.But to maximize electrification benefits, shipping and logistics managers must navigate the need for high-powered charging facilities. This requires advanced planning.First, managers must define their fleet requirements to determine capacity and operational needs. Then they will select their vehicles and determine the scope of the charging network—e.g., the hardware and software, charging connectors, charging speeds, and network solutions.The next step is to define energy demands and select technologies that will provide the appropriate onsite power generation, energy storage, and energy management software, with consideration toward energy monetization, availability, resiliency and scalability. Site design and planning are important considerations, since adding high-powered charging load will require upgrading existing equipment—either retrofitting existing charging facilities or adding new sites. With proper planning, predictable cost, resiliency and comparative advantage can be established.A critical piece of the process is to coordinate and engage with utilities and technology integrators to develop long-term power-delivery strategies. It’s also important to know if utility distribution grid updates will be needed to accommodate charging. If so, this could add significantly to the project timeline.With plans in place, next steps are right-of-way application, securing permissions and permits, and submitting the necessary paperwork, including state environmental impact filing and interagency approvals. Lastly, it’s time to procure equipment and begin site construction.Electrification of medium and heavy-duty vehicles is advancing fast, spurred by lower operating costs, improved driver safety and the promise of a lower-carbon future. But e-trucks are a nonstarter without well-designed high-powered charging facilities. By planning now, shipping and logistics managers will maximize the benefits of going electric as they plan for scalable growth and cost-efficiency.