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Last-mile delivery: An easy switch to a 100% electric fleet

The use of electric vehicles (EVs) offers many benefits for the last-mile delivery sector, starting with lower operational costs. Converting to an electric fleet is simple, beneficial for the climate and without significant financial expenditure.

More and more consumers are turning to e-commerce for all their daily needs, and their requirements are high: they want a wide selection of products, express delivery, and flexible return conditions. The World Economic Forum estimates that the number of delivery vehicles in this sector will increase by 36% by 2030. This will lead to a rise in traffic congestion, but mainly in increased emissions.

Today's supply chain models make it possible to process large volumes of orders and get packages out of warehouses at record speeds. However, one essential part still seems to lack efficiency: last-mile delivery.

Drop-off centres or transportation hubs that receive parcels to be redistributed on the “last mile” must bring the goods directly to the customer’s doorstep using a fleet of dedicated vehicles. This last step of the delivery process costs about 28% of the total delivery cost, in addition to causing about 30% of the CO2 emissions of a city.

ELECTRIFY YOUR last-mile delivery FLEET

The ultimate weapon against CO2 emissions

The last-mile delivery sector is the perfect fit for electrification thanks to low daily driving ranges and defined routes with predictable schedules. That's why many logistics players are already electrifying their fleets to make delivery more environmentally friendly on these short routes between the transportation hub and the customer's home.

Many companies are putting emphasis on their ESG (environmental, social and governance) strategies. Creating roadmaps for electrification of their corporate fleets helps them adhere to their sustainability goals.

Thanks to the switch to an EV fleet, you can drastically reduce your emissions without having to compromise on your fleet’s performance. Also, there’s no reason for range anxiety since nowadays, electric LCVs (light commercial vehicles) have an average range of over 200 km, which is enough to make daily deliveries. Your electric vehicles can be charged at the transportation hub at the end of each delivery round or, if needed, on the go, on the public charging network.

The total cost of ownership (TCO) lowered

Fleet managers who switch to electric will see their fleet’s TCO (Total Cost of Ownership) drop. The truth is that purchase costs of an electric fleet of LCVs is higher than of their ICE counterparts. In the future, adjusting the vehicles' battery size should lower the purchase costs and bridge the existing gap.

However, fleet managers will appreciate lower servicing and maintenance costs of the vehicles (the maintenance costs being, on average, 30% lower). Add the prices of charging being lower than the prices of a full tank of gasoline, various government incentives and grant schemes for electrifying your fleet, and it's clear that the TCO parity can be reached.

EV charging means easiness

One thing we need for a successful conversion to a 100% electric fleet is an always accessible charging infrastructure. Your drivers can charge on the public charging network, at their own homes, but mainly directly at the depot centre.

E-mobility makes it possible to integrate energy distribution systems within your company’s premises. This involves installing charging points, making electrical connections, and dealing with their maintenance.

Once a qualified service provider takes care of the technical phase, you can continue using your usual fleet management tools to manage assignments, maintenance and insurance; simply add a software overlay to integrate the EV charging management system.

Monitoring your KPIs just became easier

Fleet management KPIs are often measured by monitoring fuel consumption and expenses by keeping up with receipts and manual data entry. By going electric, the process becomes much more convenient and precise.

With an EV fleet, it’s easy to stay on top of all the data, thanks to a cloud-based management platform.

You can track, for example:

  • Duration of a charging event
  • Amount of kWh charged
  • Battery charge level of individual vehicles

VIN or Vehicle Identification Number, is a unique number assigned to each vehicle. Thanks to this number, fleet managers can collect data from the EV remotely, tracking the location of the vehicle as well as its mileage and already mentioned battery charge level.

Pro tip: When starting a charging session at the end of the day, the driver who plugs the vehicle in is often not the same one as who unplugs it the following day to start their round. That means that to get the correct data, the RFID tag used to activate the charging session must be attached to the vehicle and not to the individual driver.

MAKE A LONG-TERM INVESTMENT WITHOUT STRAINING TODAY’S FINANCIAL CAPACITY

Making the switch to electric requires a significant investment. Virta designed a financing programme with BNP Paribas to make the switch less intimidating. The purchase and installation of charging stations can be financed with a loan over 36 to 60 months. Plus, you don’t have to purchase the electric vehicles either, but lease them instead.

Logistics companies are determined to change their business models by last-mile delivery electrification. In fact, 85% of fleet managers say that decarbonisation is their top priority. But they are often discouraged by heavy operational management and high launch costs.

At Virta, we can support you with a tailor-made fleet solution that automates invoicing, collects data, and allows employees to be reimbursed for their home charging.

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