Pressure is growing on operators to invest in electric HGV fleets but is this the right time? David Landy, head of fleet with parcel delivery firm Evri, discusses the key challenges and worrying cost implications
Q: For the moment, how much sense is there in any operator going electric?
A: If whatever we’re changing to isn’t affordable, and you'll lose your competitive edge, you’re probably going to hang on and step off at the last point. Then you’ve got manufacturers being penalised for not building the right balance of ICE trucks and electric trucks. When it comes to your buying round you’re pretty much going to be forced into this alternative. It may not be what you want but it might be as good as you’re going to get. With the technology changing at such a pace you might think I don’t want to buy something now when, in two years’ time, something comes out that’s superior. It’s hard.
Q: So what’s the best tactic for operators?
A: Take a breath and see. It feels like there’s been a huge amount of momentum in the last two years but it’s got to a point and it’s stayed there. It feels like it needs another push. Our clients want to know what we’re doing. We can showcase that and show the results in our journeys. But there’s only so long we can do that. We move parcels, we don’t make trucks. So we're dependant on the manufacturers coming out with a solid offer but they're being penalised because they make a truck that we can buy but we’ve got no way of charging it. Truck makers are being penalised for there being no charging infrastructure. So you’ll see manufacturers having more involvement in the charging.
Q: So truck manufacturers need to provide more funding?
A: That’s the way it’s feeling. We had DAF give us a 19-tonne electric truck to trial but we couldn’t charge it. That’s just one truck in the depot where we run 40. At the moment it’s not their problem, it’s our problem. But ultimately it’s DAF’s problem because they won’t be selling any trucks.
Q: Any plans to trial electrification on certain routes?
A: Yes, we’re working closely with a major international client and a manufacturer about how we can do a trial of electrifying a route from one of our hubs to their DC and then constantly running that route with electric trucks.
We’re having site surveys done now to charge that one truck. But then you think we’re running 200-plus trucks, nearly 300 in peak periods. This is just one. Even that manufacturer is saying if you come to us wanting 30 or 40 of these, we’ll put you off doing it because we don’t think you know enough about it to put your foot in the water that much. Even the manufacturers are nervous about what to sell you or how you would use it. They want to get close to us and see what the usage profiles would be like, what the distances are, and what the charging opportunities would be. So they’ve got an international relationship with their clients and want to work with someone.
Q: How far have you got with other ways of decarbonising your HGV fleet?
A: For a good five years we’ve been running on biomethane gas. We’ve been build, build, build on that fleet so we’ve made a big start. But it was affordable to do it. If you look at electrification there’s a big price premium both in the vehicle and the charging infrastructure. That’s a big move.
Q: But CNG isnt a good long-term solution?
A: No, but it’s a very good interim solution for us. We’re pushing that all the time. Availability is good. We have a network so we don’t need to deviate to fill up our vehicles and drivers are also used to it. So we’re used to thinking differently and that’s a good trait with what's coming down on us.
Q: How much of a problem is the limited range of long-haul electric HGVs?
A: Look at duty cycles. What we're used to doing is filling up with diesel or gas on site. Drivers have to get to the depot non-stop. So for us, with diesel you just do that. With gas, we can do a 400km journey and get back on one tank. With electric, you have to stop every four-and-a-half hours and charge every 45 mintues. We’re going to have put something in our depot or very close by as a shared user facility. At the moment, that’s a hard part to visualise.
Q: Operators sometimes tell us we're focusing too much on decarbonisation. Have they got more to worry about in such challenging times?
A: It’s a fair point. Especially the smaller operators who are putting it off. I don’t know what the impact wlll be. Can they afford a new generation truck?
Q: Are manufuactuers ignoring the SMEs, meaning they're being left behind?
A: I can imagine that happening but I’ve not seen it. I don’t know any smaller operators. They’re going to the bigger operators who may have the funding to put one of the trucks on the road and see how they get on with it.
Q: Roads minister Richard Holden rejects the idea that the government should be offering more incentives to switch and claims commercial partnerships are the answer?
A: That seems to be what’s happening. They’re looking for people to put their own charging infrastructure into their own networks. So for our depots we would need to invest and make that happen, and that is a massive challenge in terms of the amount of power required from the grid. Look at one of our hub operations. We’ve got say 200-plus tractor units running up to a quarter of a million kilometres a year. The charging for the electric version of the vehicle is massive.
Q: Are the goverment being realistic with their plans?
A: We need help is the best way of putting it. Funding and help. There’s a massive cliff face coming at us as operators. At the moment a lot of people have done a lot of things early on. But there’s a lot of trying things rather than actually taking that deep dive and saying, 'I’m going to completely do all my fleet in the next couple of years.' I don’t think it’s affordable yet. Given the capital prices of the investment of the truck and the infrastucture I don’t think early adoption is truly affordable.
Q: What do you make of Holden's claims that prices in the car and bus sector are coming down and will be for trucks?
A: A truck is a very different proposition to a car. With vans and cars I absolutely get it. But for a heavy truck, a 4x2 tractor unit, imagine the amount of batteries to give you a decent range. For anything that’s remotely usable you’re talking 12 tonnes by comparison to less than eight now.
Q: Does the government understand the concerns of operators?
A: Yes I think they do get it. They’re all very straightforward to understand. It’s translating that into an action plan to help us. They would rather bat it back into our court. But the danger of them not doing anything is that people will hang on to older technology for longer. Euro-6 is very clean so why change?
The price of new equipment and resources has gone up hugely in the last couple of years. Already you could argue that some operators are thinking, why would I buy a new truck when I can just run my old one for a couple of years longer? If you extrapolate that as we get through to 2035, it will be interesting to see how it pans out with residual values on equipment.
Q: What’s your best guess on where we'll ultimately end up with decarbonising HGV fleets?
A: For the long distance we’ve got a really keen eye on hydrogen. Forget the costs for a minute - operationally it works just like diesel. Going away from diesel operationally is really, really hard. We’re quite efficient in running diesel for long duty cycles, big mileages. Anything that you try to do that impacts on that is a real pain for those guys. So if you put an electric vehicle into the mix, how many more of those would you need to replicate that efficiency? Whereas with hydrogen if you run out you put some more in it and off you go again.
Q: But for a higher price?
A: Yes, it’s a lot more expensive than battery electric. But when the volume comes along, that could make the technology more accessible. There’s also the efficiency of powering the vehicle along. Hydrogen is not as efficient as battery electric. So operationally it’s a trade off between how much does that matter against something that actually works? There’s no silver bullet and it’s not a case of one size fits all.
Q: What’s the hardest part of your job?
A: The hard part is managing the fleet in and out and how you manage damage. It’s an issue and one we manage closely.
There weren’t enough assets in the market during Covid. We had to invest heavily in getting cross trailers in. We’ve done that with the big manufacturers. We have to be creative in how we hold those assets. We’ve got trailers now that are on flexible arrangements, we can turn them on and off and it works well. The downside is we’ve got to park them. But the trailers are effectively our warehouses, we don’t store anything so we need them.
Q: How’s business more generally for Evri?
A: Our business pretty much doubled in size during Covid. Recently retail spend and volumes are down but in our market we’re bucking the trend a bit. Our parcel volumes haven’t declined in the way retail spend has. We’re the more affordable end of the market but people are tightening their belts.
We’re seeing different clients come aboard. It’s more C2C, it’s a new marketplace. We invariably do the collection as well as delivery so that’s more transactions for us. We do more with Vinted and e-bay. Someone drops something off, we collect it, process it and deliver it.
The business has new strands to it now – we’re building international work, also e-fulfilment and targeting the SMEs. We’re going after markets that aren’t necessarily new but there’s more focus on building business up.
Q: But you're reducing fleet size?
A: Like-for-like yes but underneath it there’s growth. What makes it hard is we have more truck downtime than we would like. We’re short of technicians, parts supply and availability. That’s quite a drain. Dealers are under pressure in their own areas.
We pick our core fleet and flex up and use spot hire. We give rental providers work all year round and they support us when we need them. So we’re not carrying excess fleet when we don’t need it. We do track our fleet size very closely.
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