NEW YORK—With recent battery technology innovations, many delivery companies are heavily investing in electric trucks, the New York Times reports. FedEx, UPS and Amazon have all tested electric trucks but haven’t yet converted large portions of their fleets to EV.
Now, these companies and others are committing to electrifying the last delivery mile, usually from a transportation hub to a final destination. This push for more electric delivery trucks is partly because of climate change concerns and partly a bottom line decision to lower delivery costs. The pandemic has triggered a massive uptick in package delivery. For example, UPS delivered up to 2.1 million packages daily during the second quarter—that’s close to a 23% hike in average daily U.S. volume from a year ago.
“The rise in e-commerce is increasing demand for electric delivery vans,” said Tim Denoyer, vice president and senior analyst at ACT Research. “And because of three factors—the short length of operation, the ability to return to a central base, and frequent stops and starts that work well with regenerative braking—the duty cycle works well with electric.”
The North American last delivery mile market reached $31.25 billion in 2018 but will hit just under $51 billion by 2022, according to Statista. Even sans subsidies, electric vehicles would reach cost parity with their non-EV counterparts in many segments by 2020, according to a Bloomberg New Energy Finance report. “In short local delivery operations, the cost economics for electric are now better than diesel in some cases,” said Denoyer.
For example, UPS has multiple partners in its quest to electrify delivery vehicles. EV trucks will give “us a chance to be transformational, not just in energy consumption but in terms of leveraging all the technology beyond just making the wheels turn that is available to fully connected vehicles,” said Scott Phillippi, senior director of maintenance and engineering for UPS’s international operations.
Mike Casteel, former UPS director of fleet procurement, shared last year at the Fuels Institute’s FUELS2019 conference insights on the company’s investments in alternative vehicle technologies, noting that the rise of single-package delivery could drive UPS’s electrification strategy with smaller vehicles making more frequent stops.