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The ‘last mile’ of goods delivery is especially carbon-intensive, but a new wave of zero-emission vehicles is on the horizon to help cut the climate impact of online commerce

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Gatik, a middle-mile delivery company based in Palo Alto and Toronto, recently introduced what it says are the industry’s first electric self-driving box trucks.Courtesy of manufacturer

Delivery vans rumbling down the street have become an increasingly common sight over the past 12 months. As people order more goods and services online, the vans have become something of a lifeline, bringing food and other necessities, some regrettable fashion purchases and, unfortunately, an increasing amount of climate-change-causing pollution.

More deliveries means more greenhouse gas (GHG) emissions. The “last mile,” the final step of delivery process that sees goods transported from a local store or nearby warehouse to your doorstep, is especially carbon-intensive.

A new wave of electric vans from Ford, General Motors, Rivian and others could be the answer. They’re well suited to short-haul last-mile deliveries and could simultaneously help Canada meet its 2030 climate targets and keep up with the boom in online shopping.

“By 2030, with deliveries on the rise, freight emissions are expected to surpass passenger-vehicle emissions in Canada,” according to a report released in December by the Pembina Institute, a clean-energy think tank based in Calgary. In other words, it’s just as important for delivery fleets to transition to zero-emissions vehicles (ZEVs) as it is for commuters and everyday drivers.

“The carbon-heavy component of delivery is the actual last mile, the delivery of the package,” said Mary de Guzman, head of corporate social responsibility and sustainability at Mississauga-based freight and courier company Purolator Inc. “We need to reduce our carbon footprint and ideally transition to zero-emission vehicles, so that’s our goal,” she added.

A report from the World Economic Forum last year predicted that, without intervention, urban last-mile delivery emissions would increase by more than 30 per cent in the top 100 cities globally by 2030 – and that was before pandemic lockdown measures forced even more people to shop online.

To what extent delivery-related emissions increased last year owing to the boom in e-commerce is difficult to quantify. “Anecdotally, we know [delivery-related emissions] have really exploded, but I’ve had trouble getting my hands on any hard data at the national or continental level,” said Ben Sharpe, senior researcher and Canada lead for the International Council on Clean Transportation (ICCT), an independent non-profit research organization. What is clear, he added, is that there’s no real way for Canada to meet its climate goals without aggressively looking to electrify the transportation sector – something we have so far failed to do.

Right tech, right time

Electric vans, like electric vehicles in general, have seemingly been just around the corner for a decade. Purolator first tried using electric vehicles in 2007, but decided they were too expensive, said Serge Viola, who is in charge of the company’s national fleet of 5,500 vehicles. Part of the problem, he said, was that you couldn’t buy a factory-built electric truck from a major automaker. In 2011, Canada Post found its then-new electric vans were frequently running out of juice. Since then, EV charging speeds and driving ranges have improved and costs have come down.

“Today, what you’re seeing is more and more [automakers] talking about introducing fully electric [commercial] vehicles, and that’s the world we want to be in,” said Viola. The industry is on the cusp of a big change, he added.

Last year, Ford Motor Co. unveiled a factory-built, all-electric version of its Transit cargo van. In January, General Motors Co. announced a $1-billion plan to build its new BrightDrop electric vans in Ontario. Amazon is already making deliveries using the first of its 100,000 electric vans being built by Rivian LLC. Gatik, a middle-mile business-to-business delivery company based in Palo Alto, Calif., and Toronto, recently announced what it says are the industry’s first electric self-driving box trucks. Tesla Inc.’s absence in the urban delivery space is notable – it is concentrating on producing a large electric semi-truck – but other auto industry startups like Canoo, Arrival, Via Motors and Bollinger Motors are working on getting electric vans and smaller trucks on the road.

The benefit for fleet operators is that electric vans won’t require as much maintenance as traditional gas- or diesel-powered vans, and recharging won’t be as expensive as refuelling. Mass production by Ford and GM should help drive costs down, too. Ultimately, despite higher initial purchase prices, electric vans could be cheaper over all for fleet operators to run. At least, that’s the theory.

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Purolator is aiming to gradually shift its delivery fleet to ZEVs.Courtesy of manufacturer

Over the next two years, Ben Sharpe of the ICCT expects commercial electric vans will begin to hit the road in large numbers. Major industry players such as Amazon, FedEx Corp. and United Parcel Service Inc. are making very significant investments in electric vehicles, he said. “City driving is the place where it makes the most sense to electrify [delivery vehicles], given that you typically have a back-to-base type of operation where you can charge [the vehicle’s batteries],” he explained.

That’s exactly the idea behind Gatik’s new electric self-driving box trucks. They are based on Ford Transit F-350s, fitted with an electric powertrain developed by Utah-based Via Motors Inc., and Gatik’s own self-driving system. (Most of Gatik’s trucks have a “safety driver” behind the wheel who can take over if needed.)

The trucks have a range of nearly 200 kilometres and can quickly recharge while being loaded and unloaded. They’ll be on the road this month, making deliveries for Walmart Inc. in New Orleans.

“The upfront cost is slightly higher, but in the long term – if you look at the life of these trucks – it’s cheaper to own and operate an electric vehicle compared to regular [internal-combustion engine] vehicles,” said Gatik co-founder and chief executive officer Gautam Narang. He would eventually like to make the company’s entire fleet electric. “It will be possible in the next few years,” he said. The savings could potentially be passed on to consumers, making deliveries more affordable while also reducing emissions.

Purolator says it plans on keeping human drivers at the wheel of its trucks for the foreseeable future, but the shift to EVs could happen relatively quickly. Purolator operates 3,500 curbside delivery vans, 320 of which are hybrids. At the moment, none are fully electric, although the company is testing several different ZEVs, fleet director Viola said. Every year 10 to 15 per cent of Purolator’s vans are replaced with new ones. “The opportunity is to take that 10 or 15 per cent and turn that into a green fleet, as much as we can, year over year,” he said.

Faster, cheaper

Understandably, most people clicking the “buy now” button online probably won’t be thinking about what type of vehicle delivers their package or how it contributes to climate change. Amazon made fast, free delivery the norm, and now we simply expect it.

The challenge of reducing emissions from last-mile and middle-mile delivery is likely to become more difficult as people continue to do more of their shopping online, even after the pandemic.

Last year’s total e-commerce sales are expected to surpass 2019′s total of $305-billion, according to Statistics Canada. General Motors estimates the market for parcel and food delivery in the United States alone will climb to more than $850-billion by 2025.

Since April, Gatik’s self-driving trucks – which make “middle-mile” deliveries along predetermined routes from local distribution centres to neighbourhood stores – have been carrying roughly 33 per cent more orders daily for companies including Loblaw and Walmart, according to Gatik’s Gautam Narang.

“Market penetration for online groceries was 2 or 3 per cent in 2016; now it’s close to 20 per cent,” Narang said. “Customers are not going back.

“There are delivery companies that are thinking about how can we enable one- or two-hour delivery,” he added.

For smaller companies, the higher up-front costs of EVs still present a significant barrier to adoption. Chen Goel, chief logistics officer for the Toronto area grocery chain Fresh City Farms, said every time they’ve looked at adopting EVs, the No. 1 barrier has been the high purchase price.

Federal government rebates for zero-emission vehicles only apply to light-duty vehicles, not larger commercial vehicles, but the government does offer a 100-per-cent tax writeoff for commercial ZEVs. B.C. and Quebec offer additional provincial incentives.

The World Economic Forum report concluded that more should be done to encourage faster adoption of commercial ZEVs and other last-mile solutions, such as drones, load-pooling, nighttime delivery and multi-brand parcel lockers, in order to avoid significant increases in pollution and traffic congestion.

The first big wave of electric vans and trucks is not going to replace every gas and diesel truck out there. But ICCT’s Ben Sharpe said it will show that these early commercial ZEVs can do the job, encouraging more businesses to make the switch. And that means a little less guilt when you click the “buy now” button online.

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