Greener on the other side of COVID-19 – commercial vehicles & electrification
- Before COVID-19 hit the world, electrification of commercial vehicles was taking place at a steady pace.
- Post pandemic, growing customer demand and incentives for electric vehicles may provide more sales growth than anticipated.
- Formula E Championship has been a unique testing ground for DHL to prepare tackling supply chain disruptions.
Amid all of the current uncertainty, one thing is for sure. The pandemic is propelling greener transport on our roads. Right now, governments around the world are committing vast sums of public money to struggling sectors of the economy, and commercial vehicles are not immune to this crisis. The market has plunged and so government stimulus is essential, and it comes at a time when there is widespread recognition of the environmental and health benefits of green transportation. To access public funds, governments are likely to insist that original equipment manufacturers (OEMs) switch from traditional power-trains to sophisticated electrification.
Before the crisis
Pre-COVID-19, the commercial vehicle industry was moving steadily towards electrification despite concerns about battery technology, range, recharge times and more. Entrants included Daimler, FCA, Ford, Iveco-Nikola, and Volkswagen to name just a few, along with several Chinese OEMs. With each new e-vehicle launch, it became obvious that mission determines design. To achieve long-range autonomy, trucks that connect point-to-point before the last mile feature more batteries than those on a strictly last-mile mission.
Post-COVID-19, it will get greener once supply chains are designed to cope. Toby Groom, EV Logistics Program Lead, DHL Commercial Operations, says:
“Due to the increase in customer demand and incentives for electric vehicles post pandemic, anticipated sales growth could well prove to be an underestimation.”
But at this level alone, battery volumes and logistics complexity will greatly exceed current capabilities. Additionally, there are challenges that are intrinsic to batteries themselves:
- Batteries can fail – Technology will improve but this will take a couple of years. Meanwhile OEMs must deal with certain battery characteristics; when one module fails, the entire battery must come out. If a company uses one million batteries, for example, a defect rate as low as 1% represents a substantial replacement overhead.
- Multiple varieties – At one point in time, the battery pack in a commercial e-vehicle could have weighed from just 300 kg but, in the next generation of vehicles with similar battery technology, this weight will skyrocket. OEMs will need to manage batteries of differing weights and shapes. And this will extend beyond effective transportation and warehousing to also necessitate excellence in reverse logistics for repairs, reconditioning and recycling.
- Real dangers – Batteries are hazardous as they pack so much power. There are strict national and regional regulations about handling and storing dangerous goods, and the final word about battery safety is with the local fire brigade chief. This can be hugely problematic; imagine receiving a last-minute instruction to provide extra battery quarantine space. Now is not a good time for dealers or OEMs to invest in Accord Dangereux Routier (ADR) warehouses, so the only solution is tighter drop off/pick up scheduling in a well-synchronized logistics network.
Challenges like this can cause significant disruption unless they are anticipated and planned for. As the global logistics partner for the Formula E Championship, DHL has experienced all of these issues. This annual global event takes place in some of the world’s biggest cities, including Shanghai and Mexico City, providing DHL with a unique test bed on a vast scale.
According to Fabio Sacchi, head of DHL Commercial Vehicles EMEA, “The foundations of our experience have roots back in Formula E. This championship has pushed us to develop sophisticated and highly effective battery handling, storage, and transportation procedures – moving batteries between multiple cities to a rigid schedule. In every location, we rely on forward planning, process consistency, effective time management, and our structured logistics network to achieve successful delivery and full compliance. All this knowledge is now ready to benefit the commercial vehicle supply chain, this time in the race to win customer satisfaction.”
Published: August 2020