For Parcel Delivery The Future is Electric - ShipRx
Blog / Electrified Delivery
2 minutes read

For Parcel Delivery The Future is Electric

Over the past year, we’ve dedicated a lot of “digital ink” to the unprecedented impact on the supply chain and logistics stemming from a (hopefully) once-a-century pandemic..and with good reason. Whether some of these impacts are permanent is yet to be determined, but many will be with us for years to come at a minimum. We’ve written about the ship from store revolution, the end of service guarantees, and the impact of COVID-19 on residential and commercial parcel shipping. Each of these topics is a “look back”; this week, we’re going to look to the future and take a peek at how electric vehicles (EVs) are poised to change the industry. 

Top motivations for the transition to EVs

Samsara’s March 2020 “The Power of Data Transparency: Electric Vehicles” survey, conducted by Wakefield Research, queried 300 US fleet managers about the future of electric vehicles. The results: 90% of fleet managers responded that electric vehicles are the inevitable future of commercial fleets. The American Transportation Research Institute (ATRI) estimates that fuel costs make up 24% of all operating expenses, so it’s no surprise that fleet managers are looking toward a future that can cut fuel costs. It’s not just fuel costs driving the push for EV, though. 

Fleet managers predict the driving factors behind a switch to EV: 

  • 44% reduced fuel spend
  • 44% reducing maintenance costs
  • 37% reducing their environmental footprint.

Samsara’s survey revealed that 96% of EV owners feel prepared to weather a recession, compared to 72% of non-EV owners. As we’ve discovered this year, shipping conditions can change in an instant and a fleet of EVs is positioned to manage changes in a more sustainable manner.

Potential bumps in the road toward an electrified future

As a company whose reputation is built around their fast delivery times, changes had to be made quickly. In their Q4 2020 Results Earnings Call, Brian Olsavsky, Chief Financial Officer, reported that Amazon added 500,000 new jobs last year and currently employs 1.3 million people. While expanding the employee base to meet new demands in processing orders, packaging, and shipping, they also added buildings in their fulfillment and logistics network to increase their square footage by about 50% year-over-year.

Lesson for other online businesses

As trucking companies move full speed ahead toward the integration of electric vehicles, experts question the viability of the EV battery supply chain. DHL’s website notes, “There are many challenges facing the EV battery industry from the availability of raw materials to the dominance of global production centers. The relationship between producer countries and their own demand for electric vehicles impacting on world supply will be an increasingly important consideration.  For example, China is the largest producer of EV battery lithium hydroxide but has also seen the greatest growth in demand for electric vehicles.” As demand increases, timely and reliable supply may become an issue that causes companies to pause before committing fully.

How will FedEx and UPS incorporate EVs into their fleet?

In 2018, UPS announced that “For the first time, electric trucks are expected to cost UPS no more than regular diesel vehicles.”  More recently, UPS committed to purchasing 10,000 EVs from startup Arrival in the US and Europe for rollout by 2024. 

UPS isn’t alone. This March, FedEx released a statement announcing its plan to achieve carbon-neutral operations globally by 2040, replacing its entire FedEx parcel pickup and delivery (PUD) fleet with zero-emission electric vehicles.

We’ll keep you up to date with changes as they’re implemented, and you can count on ShipRx to be on your side when it comes to securing lower rates that reflect the lower operating costs of UPS and FedEx. 

Todd Partner
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