Zero Emission Mobility: The Sustainable Future of Urban Logistics

By Namit Jain, Founder & CEO, Zen Mobility

The world’s leading urban logistics companies have a new mission: to reduce all logistics-related emissions to zero by 2050. Their rich expertise, vast resources, and innovative ideas will help turn this bold vision into reality. To achieve this goal, green logistics solutions would need to be implemented and a majority (at least 70%) of the first and last mile services will need to operate with clean pick-up and delivery solutions, such as cargo bikes, e-cargo vans and MPEVs (Multi-Purpose EVs)

In 2021, the global Last Mile Delivery (LMD) market was valued at $40.5 billion with anticipation of it generating over $150 billion value by 2030; so the market is projected to grow at a CAGR of about 90% from 2021-2030.

Last Mile Delivery: An Unprecedented Growth Story

In the scope of supply chain management and transportation planning, LMD is the transit of goods from a central or last mile hub to the final delivery destination, typically to the doorstep of customers. Since the pandemic, the demand for parcel delivery has increased exponentially in an unprecedented fashion across the globe, as increasing numbers of people find online shopping safer and more convenient. There was, of course, a special thrust from the millennial crowd, who are happy to adapt to any situation promptly.

As per a study by McKinsey, within a quarter of the pandemic breaking out the LMD segment had expanded to match the approximate growth anticipation of over ten years. Since the aim of urban logistics must be to guarantee increased efficiency at minimal costs, a worldwide retail supply chain survey found that minimizing costs while simultaneously improving profit margins was the primary concern of LMD business owners.

The Transition to Green Logistics Solutions

Amidst all this news of the expansion, EV fleets are replacing ICE vehicles to keep up with the sudden growth spurt as a result of the pandemic; this is directly proportional to the rapid growth of the LMD segment among others in the transportation and logistics supply chain sector. This uptick in demand for LMD is as much about flourishing e-commerce business as it is about the increasing demand for capital investment and other factors. Recently a Niti Aayog report says that our gig economy may expand three-folds to reach 23.5 million by FY30 from 7.7 million in FY21. This directly translates as a future requirement for new fleets of cargo vehicles and a corresponding number of drivers/riders to ferry the same.

Why is EV the Most Sensible Choice

EVs seem the perfect choice for these anticipated LMD fleets, due to several reasons. Zero fuel consumption by EVs renders the excessive requirement of fuel meaningless as is also the case with high operating costs, thus making logistics comparatively more cost efficient than before. Over the lifecycle of the fleet, this adds up to substantial cost savings. Thus, this contributes directly to making fleets more convenient to operate and extremely easy to maintain. Charging is the only input required for EVs and, once charged, most EVs last up to 10 hours of operations while providing a range of 80-100 km which is more than sufficient for ‘Last Mile’ deliveries which are typically done within a radius of 15-20 km of the Last Mile hub and require a range of 50-60 km within Urban areas.

In addition, all that is required is battery maintenance or renewal in some years’ time. Thus EV fleets in LMD also offer huge savings in the time since there is no waiting required at gas stations and charging can be done at one’s own leisure, even at home. All these factors not only make EV fleets sustainable with nil to low carbon footprints, but they also significantly reduce the Total Cost of Ownership (TCO) of these vehicles. And that’s not all either.

There is always innovation happening all the time in fields delving into the new technology such as fuel cells in EVs. With these, ownership of EV fleets in LMD is only going to get more lucrative. To top off all these factors, in India there is excellent support from the government through helpful initiatives to make this transition that much more prized. This encouragement is not the global norm so the LMD and related sectors are really fortunate to have our government on the same side.

EVs are without doubt the future of urban logistics – the sooner the transition is made, the sooner all the related players will begin to accrue the benefits of it being not only efficient but also sustainable.