EVs: The Future of Last Mile Delivery

Evs in the last mile delivery segment

As consumer demand for online order increases, the struggle of cities with traffic congestion and air pollution due to the increasing number of delivery vehicles, their emissions, and second-lane parking also take an uptick. Taking into account the same, there is no better time for the last-mile sector to make a substantial change by making a shift towards Electric Vehicles. Here we explore the need, the benefits, the extended support from the government, and the reason behind the slow adoption of EVs in the last mile.

As per World Economic Forum, the demand for urban last-mile delivery is deemed to increase by 78% by the year 2030 which means that there will be an addition of 36% more delivery vehicles in the top 100 cities of the world.

The study further claims that growth in urban deliveries will increase the congestion on the roads by 21%, adding around 11 minutes of daily commute time for each citizen. This will also increase carbon emissions up to 30% by 2030 without effective intervention. This means, the carbon dioxide emissions will reach around 25 million tons by the end of the next decade.

While the continuously increasing demand for goods transportation
has made the last mile industry a critical pillar of economic activity, it
has also made the industry rethink its social stand.

Looking at the hike in CO2 emission, increasing commute time and congestion, logistics service providers are pledging towards a greener
approach. A constant rise in the popularity and prevalence of electric
three-wheelers for last-mile logistics has been observed.

Logistics service providers are seeing a lot of potential in the last mile
delivery segment and believe that the Electric Vehicles are the future
of the segment.

“EV is the future of last-mile delivery as it is both cost-effective and
environment friendly.”

Monika Singh, Director, Exalta.

Ms Singh further shares that an EV is more comfortable for drivers of short
distance because they are quick to start, virtually silent, and smooth
to drive. All these features prove that EVs are perfect for urban driving, Ms
Singh says.

EV adoption makes for better financial sense for B2B services and
commercial applications.

The adoption of EVs in the last mile segment lowers the operating cost for logistics players, better unit economics which will help e-commerce players to reduce last-mile supply chain cost.

Pratik Dasgupta, COO, DoT

The running cost of an Electric 3 wheeler is 50-60 paise per Km while their diesel counterparts cost more than 3 rupees per Km. Although the cost seems minor, over the life of the asset, it will add up to sizeable operational savings.

Furthermore, EVs also save costs as they require less tinkering and maintenance than ICE vehicles.

Mr Dasgupta informs about another benefit that EVs bring along with saving cost. He shares that with the adoption of EVs one could “Benefit to operate 24x7due to zero restrictions on ‘no-entry’ permits”.

EVs have lesser restrictions in terms of entry into key metro areas compared to the conventional LCVs used in intra-city operations. Also,
urban civic bodies across the country want to promote electric mobility through waivers in entry restrictions and taxation, etc., which further gives flexibility and cost efficiencies in deliveries through EVs.

The Corporate Commitment

Apart from the potential advantages that an EV fleet brings to an organisation, another reason for its adoption is the corporate social responsibility of the companies. The growing social awareness of companies towards the environment has made them re-think and re-model their stand.

Many logistics companies irrespective of the financial constraints of ownership of EV are swiftly moving towards its adoption. Large e-commerce and last-mile delivery companies assure last-mile delivery with
commitment towards the environment and lowering their carbon footprint.

Earlier, in January 2020, Amazon India made an announcement to include 10,000 EVs (both 3Ws and 4Ws) in its fleet of delivery vehicles by 2025. According to reports, the overall outlay for this commitment is valued at 250- 300 crore.

IKEA also intends to be 100% electric globally in terms of mobility by 2030. Their Hyderabad store was the first of its kind to introduce electric vehicles for delivery of small cargo to customer homes in India. Similarly, Flipkart has also committed to replacing 40% of its delivery fleet with EVs.

This is an abridged version of the original story that appeared in the November issue of the Logistics Insider magazine. For the complete unedited feature story, click here.

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