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Home » Blogs » Think Tank » How Logistics Managers Should Approach Fleet Decarbonization

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How Logistics Managers Should Approach Fleet Decarbonization

The fronts of a row of white delivery vans
Photo: istockphoto.com/portfolio/Tramino
July 25, 2024
Ian Corder, SCB Contributor

Mounting regulatory demands, customer expectations, and corporate sustainability targets have combined to create a swirling vortex in which fleet managers, under pressure to decarbonize their vehicles, currently find themselves.

Thanks to economies of scale and advances in technology, the cost of small electric vehicles and vans has been coming down steadily, and is now reaching parity with fossil fuel-run vehicles. But fleet managers face a major hurdle with larger battery-electric vehicles, such as heavy goods vehicles (HGVs) and large vans, which remain significantly more costly than their diesel-powered counterparts. Primary causes include limited production and the high cost associated with developing and manufacturing the technology. For mid-sized vans and smaller vehicles, the challenge now is mainly in scaling up deployment to meet operational needs, while ensuring that costs are acceptable and carbon-saving benefits are realized.

But fleet managers still need to find solutions. What, then, should they do? And, if the cost of HGVs remains high, how should they seek to balance long-term benefits against substantial upfront investments?

The answers to these questions are essential to developing a successful fleet decarbonization strategy. The key is understanding the stage you’re at in your electrification journey, and creating a strategic plan accordingly. This inevitably involves a multi-faceted approach, one that takes into consideration the short, medium and long-term actions needed to achieve sustainable fleet operations.

Companies that drag their feet risk falling behind their competitors, especially in light of ambitious sustainability initiatives such as EV100, which commits companies to full fleet decarbonization by 2030. Following are four critical actions that fleet managers should take to reach this goal.

Gather insights. You don’t have to commit fully to fleet-wide electrification to start gathering information. Running comprehensive pilot programs is an excellent way to do this. These help you to identify practical challenges, such as which drivers are most likely to adopt EVs, and logistical ones, like gauging the prevalence of drivers’ home-charging infrastructure. Armed with data, you can start to build or refine your strategy so that larger rollouts of a decarbonization program are successful. For example, pilots can reveal the real-world range of EVs in different conditions and with different duties and loads, which helps managers to plan routes and schedules more effectively.

Support your drivers. The success of a fleet decarbonization strategy hinges on whether drivers are on board — that is, whether they feel enthusiastic about your goal and empowered to play their part. The first wave of drivers moving into EVs in an organization is likely to have off-road parking at home, suitable for charging a commercial vehicle overnight. Drivers also have knowledge they can share. Aim to get their input around cutting or reducing journey time — it can boost the efficacy of any decarbonization effort. Of course, you need to train them how to drive and maintain EVs, and give them incentives tied to such goals as efficient driving. You will greatly improve engagement and compliance by supporting or subsidizing the installation of home chargers, and reducing drivers’ reliance on depot or public charging. Sessions designed to gather feedback should be ongoing: drivers remain a valuable source of data throughout the decarbonization journey.

Think long term. In a rapidly changing world, we all need to be adaptable. Fleet managers are no exception. While they should set clear and achievable milestones for vehicle replacement and infrastructure development (using the SMART system of goal-setting is wise), they also need to be flexible and open with respect to new technologies and market shifts. The data drawn from driver feedback and other means should give you a reason to review your strategy regularly and expand on it as necessary, so that the fleet remains on the most efficient track towards full decarbonization. Fleet managers should make themselves aware of any advances in EV technology, such as changes in battery life, charging speed and vehicle range.

Make use of partners and incentives. Building good relationships with EV manufacturers or dealers will help to cut some of the costs associated with buying larger models, and provide organizations with good visibility of upcoming ones. It can also help manage the risk of supply bottlenecks if they occur. Working with EV manufacturers and suppliers can mean bulk purchase discounts, as well as access to new technology. Furthermore, collaborating with other companies and industry groups can create opportunities for using shared infrastructure or running joint pilot programs. Government incentives, such as tax credits, grants and rebates, can also offset the initial investment needed for EVs and charging infrastructure.

Fleet managers have a daunting task ahead of them, but it’s one they can overcome. By taking a strategic, phased approach to going green, and being vigilant to technological and regulatory changes in their space, they can bring down the costs of decarbonization — while moving toward it as quickly as possible.

Ian Corder is managing consultant at epi Consulting.

LTL/Truckload Services Education & Professional Development Green Energy HR & Labor Management Regulation & Compliance Supply Chain Security & Risk Mgmt Sustainability & Corporate Social Responsibility

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