Electronic vehicle
Electric commercial vehicles make as much if not more sense than EVs in any other market segment.

Fleet managers have a difficult job. Beyond managing a network of tens, hundreds, even thousands of trucks, they must balance regulatory compliance and corporate mandates to save money with a demand for speed of delivery and the need for powerful, durable vehicles. As the transportation and distribution segment continues to evolve, shipping and distribution companies must devise clever ways to keep up while maintaining the delicate balance between efficiency, environmental and regulatory pressures, and the ultimate goal of increasing profits. Here are a few ways distribution companies are staying ahead.

On-Demand Transportation Services

Many are probably familiar with the concept of on-demand passenger transportation. Popularized by companies like Uber and Lyft, on-demand passenger transportation services are becoming more and more the norm. This popular trend in passenger transportation is moving into the commercial realm, and it is delivering with it a number of unique benefits.

On-demand commercial transport works much the same way its passenger counterpart works. Uber’s version of on-demand commercial transportation, called Uber Freight, matches commercial shippers with drivers who are looking for a job. One benefit of Uber’s commercial transportation solution is that rates are predetermined and guaranteed. This removes the hassle of negotiating with shippers – an inconvenience that independent drivers have become accustomed to in the past.

According to an Uber spokesperson, Uber Freight is configured very similarly to the company’s passenger service. Uber Freight takes into consideration factors such as distance, location, and marketplace dynamics. Uber Freight also factors in the cargo type to determine prices. Uber Freight drivers are given freight and destination information via their phone, but unlike Uber’s passenger drivers, freight drivers may choose which load(s) they want to book.

Uber Freight is not alone in the on-demand freight transportation space. Convoy, Uber Freight’s primary competitor, actually jumped into the commercial transport ring nearly two years ahead of Uber Freight. Backed by Amazon founder, chairman, and CEO, Jeff Bezos, and former Microsoft CEO, Bill Gates, Convoy has ready cash and is poised to capture a formidable slice of the US on-demand truck brokerage market.

Electric and Hybrid Vehicles

While electric and hybrid passenger cars have been around for years, the technology is relatively new to medium- and heavy-duty trucking. Current growth is due in large part to the demand for vehicles that comply with strict air quality regulations, and particularly those intended to reduce exposure to diesel exhaust. But beyond merely wanting to avoid the punitive side of the issue, fleet managers today are taking a proactive stance on electric and hybrid medium- and heavy-duty trucks, for a few reasons.

In an interview with trucks.com, Bill Van Amburg, executive vice president of Calstart, noted that:

Electric medium-duty commercial vehicles make as much if not more sense than EVs in any other market segment…For one thing, fleet vehicles, and particularly medium-duty fleet vehicles, maintain usage patterns that lend themselves to electrification. Medium-duty commercial vehicles are not traversing the country in single efforts, but instead deliver within a somewhat limited range, which makes it easy to get back to its charging base.

Van Amburg continues, noting that electric medium-duty commercial vehicles are “part of a centrally based fleet that can be charged overnight in a single location, minimizing the fleet operator’s investment in battery charging infrastructure.” And as commercial electric vehicles (EVs) become more ubiquitous on the roads in years to come, medium-duty commercial vehicles may be able to take advantage of the slew of charging stations that will pop up at gas stations and convenience stores as a result.

Another benefit of electrifying medium-duty vehicles, according to Michael Held, a director at AlixPartners, is that commercial EVs may possibly receive “preferential treatment,” and will be better poised to deal with the vexing routing and parking challenges currently faced by many commercial drivers.

Of course, there are drawbacks to investing in commercial EVs, the primary one being expense. The electrified chassis alone can raise the acquisition cost of a commercial vehicle up to 30% more than a comparable diesel version, and while commercial EVs boast up to 85% fuel savings and a 66% reduction in maintenance costs, some fleet owners simply do not want to deal with the initial sticker shock.

Clean and Renewable Fuels

Beyond hybrid and electric vehicles, the transportation industry is trying out other forms of “clean fuels” for their distribution networks. Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) vehicles are becoming more and more popular in the medium- and even heavy-duty transportation space, with CNG and LNG stations popping up all over the place both domestically and internationally.

A 2015 UC Davis whitepaper entitled, “Exploring the Role of Natural Gas in U.S. Trucking” identified three regions – California, the Great Lakes, and the Mid-Atlantic – that are particularly “well-positioned to launch small, initial natural gas transportation networks for heavy trucking due to their proximity to high-volume travel corridors.” Researchers suggest that natural gas-based heavy trucking would boost energy security, increase resilience to weather-related events, and lower freight costs, all from an LNG network that could be launched for less than $100 million.

Moving beyond fossil fuels altogether, Norway’s largest food wholesaler, ASKO, is planning to utilize hydrogen-powered delivery trucks this year. If ASKO executes its plan successfully, it will be the first hauler in Europe with a fleet of heavy-duty vehicles powered exclusively by hydrogen.

While levels of feasibility vary greatly, alternative distribution models are being researched and funded now, and the supply chain is evolving as a result. From dispatch to inventory management to regulatory compliance, PDI is poised to meet your changing and evolving supply and distribution needs. Contact us today to find out how our solutions can help your fleet remain safe, current, and compliant.