The shift to electric fleet vehicles in logistics

The electrification of vehicles in logistics is progressing rapidly. Sales of electric trucks increased by 35% in 2023 compared to 2022, according to The International Energy Agency (IEA). It is only set to grow, due to ambitious environmental policies, cost reductions and company decarbonisation goals. But the difference between short and long-haul vehicle journeys is reflected in the progression of their electrification. With more frequent charging needed for long-haul, the expansion of charging infrastructure is crucial, prompting various industries to find new ways to meet rising demand. Yet delivering enough electric power to those charging stations and covering the cost is “the biggest barrier” to the electrification of fleets, as David Cebon, Professor of Mechanical Engineering at Cambridge University tells Logistics Insights.

Logistics industry’s EV readiness

Road transportation accounts for 12.2% of green house gas (GHG) emissions globally, which shows the impact vehicle electrification can have on decarbonisation. It is not surprising that many businesses are doing all they can to implement it. Vehicle electrification is ranked as the top 13th trend this year, in The Logistics Trend Map with 17% of logistics decision makers considering it relevant to their company. The fashion and lifestyle sector rank it highest, with 24% of logistics decision makers considering it relevant, compared to 10% in the perishables industry. “In general, where we can electrify at the moment is where loads are light and where distances are relatively short. Fashion is relatively light, perishables can be fairly heavy,” says Professor David Cebon, who is also Director of the Centre for Sustainable Road Freight.

With the average annual mileage of a truck approximately ten times that of a passenger vehicle, the process of decarbonising heavy-duty trucks remains complex. “It’s now quite clear that hydrogen trucks won’t be a thing because they are far more expensive to purchase and about three times more expensive to run than electric trucks, which are rapidly becoming lower in price and cost,” Cebon explains.

The Global EV Outlook 2024 report states that China is the market leader for electric trucks, accounting for 70% of global sales in 2023, although down from 85% in 2022. In Europe, electric truck sales nearly tripled in 2023, surpassing 10,000 units. The United States also saw a threefold increase in electric truck sales, although reaching only 1,200, which is less than 0.1% of all truck sales, showing there is still a way to go. This will be accelerated by the newly adopted heavy-duty emissions regulation in the US, which is expected to result in “zero emissions vehicles” (ZEV) sale shares of up to 60%, across different segments. The European Union’s CO2 standards for “heavy-duty vehicles” (HDVs), which targets a 90% CO2 emissions reduction by 2040, will also advance vehicle electrification in logistics.

Transition to electric fleets: Charging solutions

Recent EU legislation mandates public chargers for electric trucks at regular intervals along Europe’s motorways and in major cities by 2030. However, more infrastructure is needed for long-haul fleets.

“It is necessary to charge long-haul electric vehicles approximately every four hours and research indicates that fleets don't want to charge at public truck stops if they can help it. They would rather charge during scheduled breaks or during a logistics activity like loading or unloading. If you have to add a charging stop at a public charging location on a motorway, it will add an extra hour to the journey and you have to pay for that hour. If you need to do that for one hour out of every five hours, it could add an additional 20% to logistics costs and companies can’t afford to do that,” Cebon tells Logistics Insights.

Strategic charging is therefore key to progressing vehicle fleet electrification, where an hour of charging is enough to cover about 200-250km. There are three focus areas:

1. Overnight charging for distribution vehicles with predictable daily energy needs.
2. Destination charging at logistics facilities like warehouses and depots during activities like loading and unloading.
3. On-the-move charging during regulatory driver breaks at specific facilities.

Progress is being made, with company Milence launching its first electric truck charging facility in the UK in March and plans to expand across Europe. In California, regulations for electric drayage trucks by 2035 and electric heavy-duty trucks by 2045, are prompting investments in charging infrastructure. In May 2024, Southern California’s largest heavy-duty electric vehicle (EV) charging depot was launched, powered by the nation’s largest EV truck microgrid. This microgrid was built to speed up the process of getting EV trucks on the road, rather than waiting two years for a grid update.

Feasibility of electric fleet transition

Supplying charging points with electricity remains a significant challenge due to high costs and long waiting times for grid connections. Some logistics companies face costs so high that relocating warehouses closer to electricity sources becomes a consideration.

“Getting the necessary electricity to those locations is a huge challenge and is the biggest barrier to the electrification of trucking, in my opinion,” David Cebon says. “One of my industry partners in the UK told me that a quote for connecting all of their seven major warehouses was £120 million. It’s very hard for logistics companies to find that money. So this is a really major issue if electrification is going to happen.

“The number one priority, in my opinion is for businesses to engage with this issue of having to get large scale electricity connections into logistics facilities. That's the hardest thing. You need to do that quickly because there's a long waiting list and you can't afford to wait if you want it to happen for 2035 or 2040,” Cebon says.

Proactive engagement with distribution network operators (DNOs) and collaboration between governments, regulators, and private industries are essential to address these challenges and support the logistics industry’s transition to electric fleets.

The road ahead: Future outlook for electric logistics

Adopting electric fleets can contribute to reducing GHG emissions, improving air quality, and lowering noise pollution. While electric trucks currently excel in shorter journeys, advancements in battery technology and charging infrastructure are expected to enable their use in long-distance freight transportation over time.

“What we can expect to happen as we go forwards is that vehicles will become cheaper, batteries will become lighter and more energy dense and the amount of charging infrastructure available will increase. And we'll gradually be able to do more of the existing logistics journeys using electric vehicles,” Cebon says.

“I think that we'll see that the cost of electric vehicles come down significantly over the next five years and it’ll be easier for fleets to make them profitable and that’s very important. And we'll see the rolling out of electrification infrastructure. So I'm expecting over the next five years electrification will go from an exploratory phase to fairly significant implementations across a proportion the easier long haul journeys,” Cebon explains.

Maersk aims to reduce GHG emissions across all modes of transport and its logistics centres by 2030, with a net zero GHG emissions target by 2040. The journey towards vehicle electrification is ongoing, and Maersk continues to explore opportunities to support this transition. Maersk has recently partnered with local transportation provider Sotraser Chile to introduce electric trucks into its service offerings in Latin America.

*Maersk defines "reduced GHG emissions fuels" as fuels with at least 65% reductions in GHG emissions on a lifecycle basis compared to fossil of 94 g CO2e/MJ.

Be ready for decarbonising logistics to go all the way!  Discover more with Maersk Logistics Insights, learn about Maersk’s reduced emission logistics solutions or for more trends and insights, read and download The Logistics Trend Map.