The Benefits Of Electric Vehicles In The Supply Chain

How electric trucks will revolutionize the supply chain

2Feb

According to estimations by PwC, by 2030 around 35% of US vehicles are going to be powered by electricity. This will have radical implications for supply chains across the board, revolutionizing current delivery systems. In November 2017, FedEx, along with rival DHL, announced they will order 10 Tesla Semis, the company's first battery-powered heavy-duty truck. Around a similar time, Fortigo Freight Services, one of Canada's largest fleet management companies, also claimed to have pre-ordered the Tesla electric truck to test on limited routes. To date, more than 200 orders have been placed by various companies to trial the effect this new tech will have on their delivery systems.

In an interview with Wall Street Journal, Jim Monkmeyer, President of Transportation in North America at DHL, stated 'this is the future and we want to be in on the ground floor.' Clearly, companies are beginning to understand the benefits of utilizing electric vehicles, but what are these benefits within supply chains?

Increased Sustainability

Electric cars are famously 'green' - the saintly alternative to the brutish, gas-guzzling vehicles of today. According to Tesla's own research, their vehicles have the potential to reduce CO2 emissions from automobiles by as much as 94%.

Chad Berndt, an Energy Manager at University Health Network, praises the introduction of electric trucks on TeslaRati. 'This broader commercialization will bring larger investments and even more rapid improvements,' he said. 'We are on the cusp of a paradigm shift in our transportation and energy sectors. A shift that will help reduce the effects of climate change, improve our air quality, and preserve our wonderful planet for future generations.'

Increasing sustainability within your supply chain is not only a brilliant goal to preserve the world we live in, it is also something consumers are increasingly demanding. A 2015 study by Nielson found that 66% of respondents would pay more for a product or a service if the company was committed to positive social and environmental change, and this number keeps rising as awareness grows. Additionally, several regulations have come into place that will in the future ban traditional vehicles, such as the European Parliaments aim for vehicles to be zero-emission by 2050. Tesla's electric trucks will likely trigger a revolution in trucking that will have a ripple effect throughout the industry, inspiring a lean towards using electric vehicles in the future. And using these electric trucks in your supply chain is a step in the right direction to hit sustainability goals, which can only have positive effects.

Safer Roads

Each year, around 4,000 Americans die in truck-related collisions, according to a Department of Transport survey. Trucking can be a very dangerous job, for both the workers and others on the road, with human error due to tiredness, distraction, intoxication, and other factors causing fatalities. Safety is a high priority for Tesla as they develop their vehicles and, in 2017, the National Highway Traffic Safety Administration awarded the Tesla Model X a 5-star rating. Travellers are predicted to walk away unharmed from 95% of crashes in Tesla vehicles.

Tesla's Semis boast an unparalleled cabin experience for drivers, with greatly enhanced on road safety. These safety features include automatic emergency braking, adaptive cruise control, automated lane guidance, and brake-by-wire and steer-by-wire with redundancy. These features have been found by the US government to successfully reduce crash rates by 40%, according to Sustainable Brands.

Cost-effectiveness

The initial costs of purchasing a Tesla truck currently stand at around $200,000, which is more expensive than a regular truck - the average Class 8 truck cost being $120,000, according to The Verge. After the initial increased expense, however, the costs of running the vehicle should be lower than with a regular truck. Tesla has estimated that it will cost just $1.26 a mile to run, compared to $1.51 for diesel which currently fuels most trucks. While it may take some time, overall changing to electric should prove to be significantly more cost-effective, and companies using trucks regularly should see their money earned back quickly.

Greater efficiency

The Semi truck, which is expected to be in production by 2019, will be more efficient than current trucks fuelled by petrol or diesel. Tesla claims it will go as far as 500 miles without needing to be charged and will hit speeds of 60 miles per hour - three times faster than a regular truck when fully loaded. As a result, an ICTT study recently suggested that using electric trucks could increase efficiency by as much as 43%, with huge potential to enhance supply chains.

More benefits will inevitably be uncovered as electric vehicles become more mainstream. However, as it stands, several hurdles will need to be dealt with before their use can be widespread. The biggest obstacle right now is setting up the infrastructure so that electric vehicles can travel with ease, this mostly comes down to providing enough charging points so that the technology doesn't grind to a halt. Once this issue has been solved, the potential could be vast. 


Join us at our S & OP Innovation summit in Las Vegas, July 17-18, to follow the debate on electric cars and more.


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