Carriers invest in challenging road to decarbonisation

Delivery companies in Europe are investing heavily in fleet decarbonisation and alternative transportation modes but still face a long and challenging road to net zero operations, many speakers made clear at the Leaders in Logistics Summit 2024.

Diverse retailers, postal operators, major parcel carriers, technology companies and other stakeholders all discussed the urgent but complex topics of sustainability, reducing emissions, and transforming the fleet in a number of sessions at last week’s event in Barcelona.

Big ambitions at Amazon

Amazon has no lack of ambitious targets to reduce its impact on the environment and is investing substantially in many different areas, Marina Lussich, Principal Programme Manager, Operations Sustainability Policy & Partnerships, told conference participants.

On the retailing side, the e-commerce giant is shipping more and more parcels in retailer packaging without any additional packaging while it is now using 100% recyclable packaging in Europe, she said.

For linehaul transportation in Europe, Amazon is switching substantial volumes to long-distance rail services and short-sea shipping, while for last-mile deliveries it has set up micro-mobility depots in 40 cities, Lussich continued.

In terms of its fleet, Amazon will add more electric trucks in the UK this year and continue its participation in the British government’s Electric Freightway project, which involves about 140 trucks from different companies. Meanwhile, for last-mile deliveries, the company is now using 300 Rivian electric delivery vans in Germany, with more to follow, and in operations, 90% of energy comes from renewable sources.

Appealing to the audience of industry managers, Lussich declared: “We are all in this game together and we have to collaborate.”

Sustainability wins customers

In a panel discussion on ‘Progressing towards a greener future’, Garret Bridgeman, An Post’s Mail & Parcels chief, stressed that sustainability is also a “positive commercial case” and pointed out that An Post had won business due to its ability to provide reporting data for customers.

He said the Irish postal operator had invested in electric vans and planned to switch its linehaul fleet to HVO fuel but stressed that “the big industry challenge is trucks”. In terms of final-mile deliveries, he described sharing parcel locker capacity as “absolutely the way forward”.

Decarbonising the postal fleet

Postal operators, with large legacy fleets of diesel-fuelled vehicles, face diverse challenges as they invest in more environmentally-friendly vehicles for linehaul transportation and last-mile deliveries, a separate panel discussion made clear.

Jacob Senger, PostNord’s Head of Fleet and Material, said the Nordic postal operator expects to have an all-electric fleet of 10,000 vehicles by the end of 2027 but faces the challenge of ensuring sufficient power charging infrastructure across the large and thinly-populated countries. Ideally, competitors should collaborate in this area but “this will only happen through regulatory action”, he predicted.

Paul Janacek, Austrian Post’s Head of Group Fleet and responsible for about 10,000 vehicles, stressed that there is now a good business case for investing in electric vehicles. In general, posts needed to focus on “permanent innovation for the next decade”, with continuous testing and then implementation, he stressed.

Finally, Edelmiro Castro, Director of Assets and Facilities at Correos, which has a fleet of about 14,000 vehicles, said the Spanish postal operator will invest in more electric trolleys for manual final-mile delivery but not so much in electric vans. Similarly, he said the lack of a sizeable electric charging infrastructure in Spain is “a big challenge”.

Calculating the CO2 footprint

One Asian postal operator transforming its fleet is Pos Malaysia. In another panel discussion, Sumesh Rahavendra, Chief Strategy and Technology Leader, stressed that the cost of electric vehicles had now fallen to similar levels as for traditional vehicles, meaning that fleet investments were now operating costs rather than capital investments.

Angad Abrol, VP Growth for technology provider FarEye, highlighted the increasing number of regulatory deadlines facing the industry regarding sustainability as well as the need for more circular supply chains and questioned whether parcel lockers “are really green or are just shifting emissions”.

Both speakers agreed that carriers are currently not always able to calculate their full emissions due to a lack of data or different calculation methods, although Rahavendra was optimistic that new solutions would become available in this field.

Lower social costs

Meanwhile, in a keynote presentation on ‘city-led blueprints for the future of urban logistics’, Johan Peeters, sustainable city logistics advisor to Belgian authorities, stressed the broader benefits of sustainable deliveries.

Citing examples from Belgium, he said that collaboration between operators could reduce the overall CO2 footprint by 45% while also reducing the social costs of issues such as environmental impacts and traffic congestion.

Peeters stressed: “It’s difficult to get everyone involved. You have to proactively involve cities and the regulator. But the proof is that you can make sustainable profits.” He has now created a freely available ‘toolkit’ of urban logistics measures for cities to adopt.