last mile

Electrifying the Last-Mile segment

Post By : Basundhara Choudhury
Post Date : July 12, 2021
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Amid the rise of e-commerce and online shopping in the pandemic times, a segment that has been propelled to newer heights is the Electric Vehicle segment. Driven by the e-commerce boom as well as the growing need for switching to a sustainable future, electrification of the last mile is poised to be the future of logistics, given the challenges en route are addressed in the long term. Our feature explores the road ahead towards electrifying the last mile.

A business is only as good as its last mile impression.

An essential organ of the fulfilment chain, the last mile is truly the most critical part of the supply chain, as it influences a chain of reactions: customer satisfaction, delivery time and costs, and ease of use. Last-mile delivery accounts for almost two-fifths of the total logistics costs, and this ensures the leading players will have to come up with newer innovative solutions to make it more efficient and cost-effective. The e-commerce boom during the pandemic coupled with the rising concern about greenhouse gas emissions is now gradually causing a shift from diesel delivery vehicles towards vehicles using alternative power sources. As such, electrification of the last mile is now gaining traction as a viable alternative that is sustainable in the long run.

HOW THE PANDEMIC DROVE THE SURGE IN EV LAST MILE DELIVERY

The Covid-19 pandemic certainly acted as a catalysing factor in encouraging last mile delivery through Electric Vehicles. However, this will not simply remain a pandemic- driven trend as analysts believe

that even after Covid-19, the EV market will recover swiftly. E-rickshaws, e-autos and e-two wheelers have emerged as the most promising segments for electrification in India and are expected to account for over four million units by 2025. In the present times, the shift to electric mobility and lastmile delivery through EV has become imperative owing to the growing call for sustainability and digital intervention for reduced environmental impact. Furthermore, the call for going ‘contactless’ amidst the pandemic worked as a positive reinforcement in the switch towards electric vehicles, thereby giving it a necessary impetus.

MOVING TO AN ALL-ELECTRIC FUTURE

The burgeoning demand for electric vehicles has led to many auto manufacturers competing shoulder-to-shoulder with start-ups to produce the most efficient and “smart” electric delivery vehicles.

On the global front, Volvo, Freightliner, Tesla, and China’s BYD are among the leading companies producing heavy-duty semi-trucks for regional shipments.

In India, several companies have made considerable strides towards ensuring an electric future.

Amazon India’s commitment to include 10,000 EVs as part of its delivery fleet by 2025 is also an example of what lies ahead.

3PL logistics leader FM Logistic India recently deployed our first batch of Electric Vehicles (EVs) in Bengaluru. The EVs will be used to carry out intra-city deliveries for one of their customers in the agri-commerce sector to help them to carry out hyper local deliveries to local kirana stores, supermarkets as well as end consumers.

“Various regulations and policies can be introduced that can further encourage the use of EVs in the transportation and logistics sector. To start with, it is important to have a comprehensive policy to create a conducive environment for the transition from Internal Combustion Engines to EVs.”

~Alexandre Amine Soufiani, MD and CEO, FM Logistic

Building on this experience, the company is all set this year to cover other areas under their green distribution network. Compact electric vehicles will be used to carry out hyperlocal deliveries in urban areas, which is poised to establish a much-needed coordinated urban distribution network.

EDEL, which is MLL’s (Mahindra Logistics Ltd.) last-mile delivery cargo service on Electric Vehicles has announced multiple offerings, including package & trip-based services. These offerings provide customers with a scalable, sustainable, and cost-efficient solution. With a load capacity and enhanced range that compares well with existing ICE options, EDEL gives customers in the E-commerce, FMCG, Pharmaceutical, Consumer Durables and Electronics industries a significant edge in efficient and responsible distribution and last-mile delivery solutions.

EDEL’s initiatives are aligned with Mahindra Logistics commitment to sustainability. The EV based last mile delivery service EDEL is aligned to this and provides customers with a sustainable, cost competitive and technology enabled last-mile delivery solution. Our focus is on expanding our network based on our deep partnership with large enterprise customers.

At MLL, our aim is to not only deploy a large fleet of EVs but also to create a conducive environment for EV deployment and operations across the country. This includes building supporting infrastructure and technology such as charging stations and parking lots, training manpower, route planning and even battery swapping stations in the near future.”

~Ankur Singhai, Vice President, E-commerce, Mahindra Logistics Ltd

As pioneers in the EV Cargo delivery space, the company intends on developing the entire ecosystem from parking to charging to battery analytics while supporting both last mile fulfilment and B2C logistics.

Bangalore-based startup Altigreen offers solutions for Last Mile Transportation (LMT) through 2, 3 and 4 wheeled vehicles for commercial use. Its first initiative NEEV L5 electric 3-wheeled delivery van, has been specifically designed to carry out last-mile logistics operations in a country like India, and has been engineered ruggedly to perform in our harsh environmental conditions. It comes in multiple variants – Flatbed, Low Deck, and closed-container High Deck. This will be followed by more products in 2022, all in last mile transport segment.

“The biggest challenge is for manufacturers to design EVs that can cater to India’s specific needs. Any EV that is not robust enough to perform in India’s conditions only damages the overall perception of EVs in the mind of Indian last-mile fleet operators.”

~ Dr. Amitabh Saran, CEO, Altigreen Propulsion Labs

GOVERNMENT SUPPORT AND INITIATIVES

The Government of India has undertaken several initiatives to promote manufacturing as well as the adoption of EVs that has led to increased penetration of EVs in the Indian market. The significant requirements for accelerated adoption of EVs call for the need for adequate infrastructure, regulations, and policies. This can be encouraged further by proposing and enabling framework. The regulations and policies under this framework should enable faster adoption of EVs in India by ensuring an affordable, reliable, safe and accessible eco-system as well as infrastructure.

Solving these challenges will require a stronger government push and policies that further encourage the electrification of distribution services in India.”

As a part of a sustainable approach, the government’s ‘Green tax’ charge has also helped in the increased use of EV throughout the country. The EV’s will eventually generate better revenue in the long run as EVs will build a reliable source.  Further, the government has also reduced GST on EVs from 12% to 5%, deducted income tax of 1.5 lakhs on the interest paid on loans to buy EVs and brought down GST rate on Charger/ Charging Station of EVs from 18% to 5%.

This is an abridged version of the article. To read the complete interview, click here.

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