DHL plans to roll out a new fleet of electric vehicles, starting with 30 cargo vans in the San Francisco Bay Area, the company announced in February.

The NGEN-1000 electric delivery cargo vans are designed for DHL and produced by Workhouse Group. Workhorse is building a fleet of 63 vans with “ultra-low floors to reduce physical stress on workers’ knees and backs, and a high roof design that maximizes cargo space in a small footprint,” DHL says.

The vans will be able to travel up to 100 miles on a single charge and have 1,008 cubic feet of cargo capacity.

While 63 vans might not seem like a lot, these new vehicles represent DHL’s ongoing commitment to electrifying its fleet. The company already has a “robust” alternative fuel vehicle fleet, including a hodgepodge of fully electric, hybrid, compressed natural gas and clean diesel vans and trucks.

It’s all part of a broader commitment: DHL aims to reach zero logistics-related emissions by 2050. On its way to that goal, DHL is aiming to use clean transport modes for 70 percent of its first- and last-mile delivery services by 2025.

“Throughout the United States, DHL has proactively sought opportunities in select markets where we can implement AFV fleets that will help us reach our clean transport goals while continuing to provide a superior service experience,” said Greg Hewitt, CEO of DHL Express U.S., in a Feb. 9 press release. “This year alone, nearly 30 percent of our new vehicles will be alternative fuel. We’re excited about the technologies that continue to emerge in this area and how they are benefiting the logistics industry.”

DHL isn’t the only company electrifying. UPS is planning to test the same vans produced by Workhorse in select U.S. markets, including Atlanta, Dallas and Los Angeles. In July 2018, reports said UPS had ordered 1,000 Workhorse vans, plus 125 electric trucks from Tesla and battery-powered light-duty trucks from Daimler AG.

And the U.S. Postal Service is testing seven electric vans in California to transport cargo, including one servicing routes in Fresno, according to a press release from one of the companies who helped manufacture those vans. With a fleet of 200,000 vehicles, the USPS could have a huge impact on the climate, and on its own bottom line, if even a fraction of those vehicles became electric.

Why are shipping carriers switching to electric vehicles?

DHL led its competitors in investing in electric vehicles. The company began doing so several years ago — and according to a report in Jalopnik, the carrier struggled to find auto manufacturers who were interested in producing electric cargo vans. At that time, in the summer of 2018, DHL’s Manhattan fleet included 87 hybrid or fully electric vehicles built by three different companies, with a fourth type of vehicle on the way.

In fact, Jalopnik reported, DHL was so far ahead of the game that its parent company actually purchased an EV startup called StreetScooter in 2014. It developed its own line of electric cargo vans and deployed them in Europe. In 2018, DHL was planning to introduce the StreetScooter in the U.S.

What led DHL to pursue electric vehicles so aggressively? The company may say it stems from a commitment to sustainability. In 2017, Deutsche Post DHL Group announced its commitment to next zero logistics-related emissions by 2050. To spur progress, the company announced four 2025 goals, under the banner “GoGreen.”

First, DHL promised to increase its carbon efficiency and that of its transportation subcontractors by 50 percent compared to 2007 levels. Second, it committed to operating 70 percent of first- and last-mile services with bicycles, electric vehicles, and other clean services. Third, DHL said it would train and certify 80 percent of its employees as “GoGreen specialists,” and invite them to do things like plant trees with partner organizations.

But for a company like DHL to invest in an initiative like this, it also has to be profitable. That was DHL’s fourth goal: to generate more than half of its 2025 sales from “products and services incorporating Green Solutions.”

That language might be vague, but the savings are not. DHL told Supply Chain Dive in February that EVs will cut monthly operating costs by 63 percent compared to fuel-powered vehicles. If they reach their goal of making 25 percent of their 1,800-vehicle fleet electric by 2025, that’s an 8.4 percent savings across the entire fleet.

A more general estimate from the Equinox Center said EVs could save as much as $1,136 over every 10,000 miles driven.

How will DHL, UPS and USPS implement electric vehicles?

One key challenge EVs face in the U.S. market is that infrastructure hasn’t yet been built to support them. DHL’s new cargo vans will have a range of 100 miles. Unless there are charging stations every 100 miles along major U.S. interstates — and there aren’t, at least not at present — these vans won’t be doing cross-country ground trips.

Instead, EVs are best suited to last-mile delivery service. That’s why DHL picked the San Francisco Bay Area as its test market, the company says: Distances are short enough and routes are dense enough that cargo vans can perform a number of deliveries on a single charge. The company plans to install charging infrastructure in the areas where those vehicles are based.

UPS has been aggressively investing in low-emissions vehicles too. UPS’s 119,000-vehicle fleet included 9,300 vehicles running on alternative fuels, 300 fully electric delivery trucks, and 700 hybrid trucks as of October 2018. Others ran on compressed natural gas. UPS said it wanted to have a quarter of its delivery fleet — somewhere around 30,000 vehicles — running on alternative fuels by 2020.

FedEx has been less robust in its pursuit of alternative fuels and carbon-neutral transportation. But as of last fall, FedEx was testing a zero-emission delivery van that ran on hydrogen fuel cells. If the pilot proved successful, FedEx planned to order 19 more vans, each with a range of 160 miles.

As for the U.S. Postal Service, executives say the company tested electric vehicles all the way back in 1899, before gas-powered cars became the norm. Some electric trucks began running in New York City in 2001. The fleet also has some vehicles that run on other alternative fuels, like ethanol, according to a February report in Fast Company.

“I think that if you look at kind of why is now maybe an inflection point for the USPS — and for other fleets in adoption of electric — it’s because battery prices are coming down so substantially and the reliability and quality is going up so quickly, thanks to passenger EV adoption,” Jim Castelaz, CEO of Motiv Power Systems, told Fast Company. Motiv Power Systems designed the electric chassis inside the seven new vehicles USPS is piloting in California.

That assessment applies to Motiv’s work, too. The company designed an all-electric chassis for USPS two-ton trucks, which are bigger than neighborhood mail trucks and common in cities, based on its designs for electric school buses and shuttles. Because Motiv already had that technology, designing for USPS was much easier.

Eventually, Castelaz told Fast Company, USPS plans to test 15 vehicles in Fresno and Stockton. They will install electric chargers in the garages where mail trucks are stored.

Each truck will reduce USPS’s greenhouse gas emissions by 37 metric tons per year. Electric charging will also be $4,000 to $6,000 cheaper than fuel each year. California Climate Investments, a state government fund that supported the purchase of the trucks, says that if all of California’s two-ton mail trucks switched from petroleum-based fuel to electric power, they could cut the state’s greenhouse gas emissions by 47,500 tons per year.

Electric vehicles aren’t just futuristic technologies anymore. They’re part of the delivery ecosystem for two of the world’s leading carriers, DHL and UPS, and are on their way to integration in U.S. Postal Service and FedEx fleets as well. EVs may even be moving your packages soon — if they aren’t doing so already.

 

Schedule a Consultation

Ready to leverage the power of Shipping Intelligence for your company? Contact us today to schedule a consultation.

Schedule Now