Analysis

UPS sustainability chief: How government can help with EV transition

UPS

Fossil fuel alternatives are becoming mainstream in ecommerce but action is needed from governments to encourage growth, says UPS’s head of sustainability in Europe.

Peter Harris tells eDelivery that of the company’s 120,000 vehicles over 10,000 are now using alternative fuels. Next year a full-quarter of all vehicles UPS buys will be alternative technology or alternative fuel.

“We are not just talking about small-scale experiments anymore.”

This is in the context of growing interest in the technology from retailer customers, who are increasingly requesting sustainable delivery options from carriers as a matter of course. By way of example, ASOS just renewed its delivery contract with DPD for five years with the condition that 50% of deliveries in London’s ultra low emissions zone be made via electric vehicles.

Carriers like UPS are in a bit of a bind. While end-consumers often claim to be concerned about sustainable deliveries, this is rarely borne out by a willingness to actually pay more for it.

Arguably the costs will be somewhat offset by the brand benefits of offering sustainability. However, when a carrier does introduce sustainable solutions at its own expense, the retailer is likely to get the credit as the owner of the customer relationship.

Overall, it is hard to see the outright business case for investing in reducing emissions in deliveries. Harris believes there is much governments should do to help the couriers with decarbonisation.

“The risk is without some intervention smaller fleet operators that don’t have the engineering resources of UPS will be scared off from electrification. This will derail [emission reduction] targets.”

He says governments must “work with industry to know how the market currently works.”

One area Harris singles out is the government’s emphasis on charging points; this was exemplified in the London EV Infrastructure Delivery Plan, announced in June, which aims to incentivise installation of rapid charge points.

Harris says that the government needs to recognise the back to base overnight recharge model, which will be more useful for companies like UPS whose vehicles don’t stop for long enough to recharge. Supporting the back-to-base model will involve the use of smart grids, for example.

He also hopes government will examine how electricity is sold, which he hopes will become more similar to how diesel is sold.

Diesel buyers “pay by the litre and have almost no involvement in infrastructure. They don’t buy their own road tankers to move diesel around.”

It needs to be the same with buying electricity, says Harris. Electricity users need to be provided with an invoice that charges for each unit of energy while factoring in infrastructure costs in the same way they are factored into diesel prices.

Harris called for a broad-ranging programme of innovation, funding and regulation from governments to bring this into being. He praised programmes such as Innovate UK for supporting investment into new technology solutions.

“These technologies need to get through the “valley of death” where they don’t have enough scale to stand on their own two feet.”

Comments from this interview will feature in the eDelivery Sustainability Deep Dive published later this year.

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