17 September 2020

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Rising demand and decarbonisation efforts are driving new technologies into the logistics sector, and will revolutionise the way parcels are delivered in their final miles.

The legacy of a turbulent 2020 looks set to be a permanent change in the way we travel and work, but its effect on fleets is not uniform. While remote working has enabled many businesses to idle or downsize their fleets – at least in the short term – the logistics sector is facing unprecedented pressure to keep goods moving and services operational. 

It’s a vehicle-reliant industry with unique challenges, and has required some market-specific solutions to solve them.

The Covid Effect

The last six months has proved the resilience of the logistics sector, which has had to rapidly incorporate social distancing measures and cope with staff self-isolation during a period of high demand.

Covid-19 has been a catalyst for changing consumer habits. According to the latest ONS statistics, 28.1% of retail sales were carried out online in July 2020, up from 18.7% a year previously [1], while Royal Mail reported a 37% rise in parcel deliveries during April and May [2], while home deliveries are also booming. In April, Tesco became the first company to fulfil a million grocery orders in a week, a figure that’s since reached 1.5m, compared to 600,000 at the start of the pandemic [3]. Several supermarket chains are expanding their driver pool to meet ongoing demand. 

However, with ONS statistics [4] showing the UK economy declined 22.1% between Q4 2019 and Q2 2020 and operators working flat out to adapt to recent changes, Natalie Chapman, head of urban policy at Logistics UK, says the recent delay or cancellation of Clean Air Zones have been welcomed. With operators typically already running or transitioning to Euro 6 compliant vehicles, she believes other schemes may be more cost-effective at reducing emissions.

“We believe that could be better invested in other measures that will have a greater long-term impact on the improvement of local air quality and also support decarbonisation objectives. [These include] incentivising the uptake of alternatively fuelled and electric commercial vehicles and addressing some of the barriers to adoption, more effective management of congestion, and enabling more deliveries to be re-timed,” she says.

The Electric Alternative

Traditionally weighted towards diesel vehicles, last-mile deliveries are fertile ground for electrification, as they typically include short, set routes in urban areas prone to air quality issues. New vehicle choice is improving, with numerous manufacturers recently launching vans and urban-focused heavy-duty vehicles with electric powertrains. 

Gareth Hughes, procurement & property director at delivery firm Whistl, believes the technology has reached a tipping point to allow this to happen. The company already has a Euro-6 compliant fleet, but he sees new opportunities to deploy electric vehicles within the next 12 months.

“[We have] looked at the van sector within [our] business over the last year. With development in the electric market getting to the point where payload and range has increased significantly. Electric vehicles are the future in terms of light fleet [but] the challenge is the charging infrastructure, both internally and externally. This will come with time,” says Hughes.

A recent study of fleet operators by Logistics UK and the Department for Transport [5] highlighted additional concerns. Chapman comments: “Many noted that there were high acquisition costs with purchasers of second-hand EVs also facing further costs; there are no grants available for the installation of charge points for used vehicles. This will have the greatest impact on small businesses, who are more likely to rely on the second-hand market due to budget constraints, impairing their ability to upgrade their fleets.

“Furthermore, a key concern among participants was the lack of vehicle-types available. Many called for a wider range of models, such as tippers and pick-ups as well as heavier 3.5 and 4.25-tonne models.”

Making Every Mile Count

Operational efficiency is vital as rising demand drives fleet expansion. In its annual report, Whistl claimed a ‘six-figure’ fuel cost saving as a result of deploying Isotrak telematics fleet-wide in 2014. Cameras and electronic proof-of-delivery were added in 2018, and Hughes says it’s an important tool.

“Telematics ensures we are utilising our fleet, while also ensuring they are driven efficiently. In modern day logistics, overall vision of all our fleet is critical to what we do both operationally, for the environment and for our customers,” he explains, adding that further optimisations are on the horizon. 

“Transport hubs to reduce stem mileage [are a big forthcoming trend, but] challenging in terms of geography and control of third-party logistics.”

DPD UK is rolling out a fleet of such hubs, beginning with an all-electric operation in Westminster. This consolidated 15 diesel van routes from the depot in Southwark onto two 7.5-tonne Fuso eCanter electric trucks, with parcels sorted and distributed locally using Nissan e-NV200 vans and Paxster micro delivery vehicles. 

In addition to facilitating an all-electric delivery system, this halved the average miles travelled per parcel, and is being used as a model for other facilities around the country [6].

Technology Pioneers

New vehicle technology is providing opportunities to re-think old constraints. Swedish manufacturer Volta recently revealed a 16-tonne electric urban delivery truck on a bespoke platform. With smaller powertrain components, the cabin is positioned to give the driver a 220-degree panoramic view at a similar eye-line to pedestrians. The company says this will contribute to improved safety as well as emissions, citing figures showing HGVs account for 4% of mileage but 23% of pedestrian and 58% cyclist deaths in London [7].

Logistics fleets could also be an early adopter of autonomous vehicles. Oxford-based StreetDrone has developed a driving ‘robot’ for converting vehicles to automated driving in low-speed environments. Its CEO, Mike Potts, believes Covid-19 will re-focus attention away from ‘robotaxi’-type mobility solutions in the short term, and rising demand for home deliveries could present an early business case. 

“For autonomous solutions to represent a step change in cost for delivery companies, the simplest way is to reduce vehicle speed, as this exponentially reduces the complexity and cost of the driverless solution,” he explains.

“Low speed and stop-start vehicle operations favour electric drivetrains, so not only is a low-speed driverless solution technically close at hand for residential deliveries, it also brings with it the additional benefit of decarbonisation.”

New technology and new ways of thinking are transforming an already fast-moving sector. While diesel still has its place as the powertrain of choice for logistics over longer distance, blended solutions for each stage of the delivery journey is showing that fleets are quickly adapting and ready to think innovatively to make all journeys as efficient as possible in terms of cost, time and the environment.

Sources:

[1] https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j4mc/drsi

[2] https://www.royalmailgroup.com/media/11236/fy-2019-20-results-and-business-update-transcript.pdf

[3] https://www.tescoplc.com/news/2020/tesco-creates-16-000-new-permanent-roles/

[4] https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpfirstquarterlyestimateuk/apriltojune2020

[5] https://logistics.org.uk/campaigns/forms/electric-vehicle-report-download-form

[6] https://www.dpd.co.uk/pdf/DPD_-_Delivering%20a%20zero%20emission%20future.pdf

[7] https://www.voltatrucks.com/press/Volta_Trucks_reveals_the_Volta_Zero_the_first_purpose_built_full_electric_large_commercial_vehicle

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