Making real progress in sustainability demands a keen sense of the issues, trends and topics.

UPS Horizons
Sustainability Insights and Updates | Special Edition | 2018
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Tamara Barker

What's Really Driving Fleet Electrification?

By Tamara Barker
UPS Chief Sustainability Officer and VP of Environmental Affairs


In a recent research study with GreenBiz we uncovered the barriers, motivators, and opportunities, when it comes to commercial vehicle fleet electrification… and we're sharing the results right here.

With more than 1,000 electric and hybrid electric vehicles in our growing fleet of approximately 9,300 alternative fuel and advanced technology vehicles, the UPS Rolling Laboratory continues to be a testing ground for emerging technology. So it was only natural for us to take an even deeper look at the forces pushing and pulling the electrification of commercial fleets.

As we've done for the past three years, we joined together with GreenBiz Group to conduct the study. In our previous research, we gained a deeper perspective on sustainable urban logistics, and the state of the circular economy. Our new study, released just prior to the GreenBiz VERGE conference in October, tapped into a topic that continues to generate interest from fleet owners, manufacturers, energy providers, and government officials.

The findings were straightforward – there's clear interest and a growing demand, but there's still much to do to shift commercial fleets to electric power.

Our research identified barriers – such as the need to prepare commercial facilities for the demands of charging vehicles. It's not as simple as plugging in, as the fleet energy requirements may exceed not only the facility, but potentially the local grid. So infrastructure is a top issue, as confirmed by 44 percent of our respondents. In fact 92 percent of survey respondents advised that their organizations were not ready for onsite fleet charging.

Vehicles are also barriers, with 55 percent of respondents reporting initial purchase price as a leading concern. Additionally, 35 percent cited the lack of product availability – with only a limited number of commercial electric vehicles on the market at the time of the survey earlier in 2018.

The good news is the demand – with 83 percent of respondents citing sustainability goals as the primary motivator for electrifying fleets. The 64 percent who cited lowering total cost of ownership as a motivator are helping to pave the way, as they implement and test that theory for others to follow.

In the spirit of collaboration, we've invited some of our colleagues who are part of the electric evolution to offer their perspectives on this topic, and we're thrilled to include their stories below. And, of course, we hope you’ll explore the research study.

Take a look, then share your thoughts: sustainability@ups.com.
UPS Hybrid Vehicle

PERSPECTIVE

Paul Carp

3 Trends Forecasting Fleet Electrification

By Paul Carp
GreenBiz VP of Business Development


For this special edition of UPS Horizons, we've excerpted a story written by Paul Carp of GreenBiz Group who led our recent research collaboration. The story first appeared on GreenBiz.com.

Fleet electrification has made significant progress, and that evolution was reinforced both during the latest VERGE event in Oakland, California, and by a recent GreenBiz research project conducted in partnership with UPS. Here are my top three takeaways:

1. Fleets will follow the path of renewables

I spoke to Peter Harris, director of sustainability at UPS Europe, about the logistics and delivery company's journey to expand its electric fleet in central London from 52 to 170 electric vehicles. He described the challenges, particularly regarding infrastructure upgrades to the local utility distribution network, and made a keen observation about the state of the fleet electrification market.

When asked if there was a turning point in the market for widespread fleet electrification, Harris said, "It's definitely coming — there's no question about the direction of travel. It's a similar trajectory to what we've seen over the past decade with renewable energy technologies like wind and solar."

Beyond the parallels in technology improvements, fleet electrification likely will happen in waves based on the favorableness of market conditions. The states and regions with more aggressive policymaking, incentives and utility offerings will shift the economics of fleet electrification to improve the business case across a range of use cases.

In the renewables industry, the battles initiated over federal tax credits and in a handful of state public utility commission proceedings. But now, the economics of renewables have won, and the floodgates are open. Most of the experts I interviewed anticipate a similar – if not even more expedient – shift across commercial fleets, largely based on battery technology improvements, subsequent vehicle cost declines and likely state and national policies worldwide.

2. Demand for electric trucks is rising

The market for electric fleets is still nascent, as it was with renewables a decade ago. However, a number of major OEMs, large buyers and some state policymakers have signaled a strong demand for electric vehicles and trucks. Call it the Elon Musk bump: A year ago, Tesla announced its all-electric semi-trailer, and dozens of companies immediately lined up to pre-purchase a truck that doesn't exist yet.

At VERGE 18, leaders from UPS, Walmart and companies such as Sysco shared lessons from their experiences in fleet electrification. The invite-only Fleet Electrification Summit during the event assembled 100 representatives from a diverse set of stakeholders including fleet managers, cities, utilities, OEMs, policymakers, service providers and NGOs.

Two factors that this group believe will be crucial for adoption: longer-term advocacy efforts and innovative financing to support the infrastructure investments required for the transition.

As the market for electric trucks matures, we can expect similar industry groups to mature while helping to advocate and provide valuable resources. At VERGE, we heard from leaders of organizations such as the North American Council for Freight Efficiency (NACFE), BSR, CALSTART and others at the forefront of electric vehicle advocacy and policy. I also interviewed leaders from the Edison Electric Institute (EEI) and the Low Carbon Vehicle Partnership, a United Kingdom-based public/private partnership that convenes 200 leading businesses focused on clean vehicle deployment.

3. Utilities should (and will) be willing partners

One major difference between the adoption of renewables and the fleet electrification will be the role of the utility – many are already positioning themselves as key stakeholders in achieving scale for electric vehicles. In contrast, most utilities initially saw renewable energy as a threat to their business model.

From the perspective of most electric utilities, tangible benefits are associated with promoting electrification. With the proper regulatory structures in place, utilities can fund and potentially capitalize investments made in upgrading electric charging infrastructure. Furthermore, some utilities are advocating for "make ready" equipment installations that support plug-and-play models where customers more easily and affordably can connect to the power grid.

Effectively, utilities see fleet electrification in their best interest and even more so when they are able to make a solid rate of return on their investments. At VERGE 18, utilities including PG&E, ConEd and several smaller players said they're hopeful that electric vehicles will help them increase grid reliability while offering valuable services to their customers.

How long will it take until we reach the tipping point in fleet electrification? What are the current use cases that make sense? What steps will be necessary to accelerate fleet electrification?

For answers to those questions and more, download the GreenBiz and UPS "Curve Ahead: The Future of Commercial Fleet Electrification" report.
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Featured Stories
We chose a few favorites from our Longitudes blog for you

The On Ramp to Fleet Electrification

An Interview with Peter Harris, Director of Sustainability, UPS Europe
At UPS, we’ve learned many lessons on our journey to building the fleet of tomorrow… Read more

Collaboration Fuels the Fleet Strategy of Tomorrow

Dakota Semler, CEO and Co-Founder, Thor Trucks
Time is of the essence for developing electric vehicles. Luckily, you don't have to go it alone… Read more

Building the Business Case for Fleet Electrification

Scott Phillippi, Senior Director of Maintenance and Engineering, UPS
A shift to electric vehicles can drive business value. Here's how… Read more

Sustainable City Innovation on the Global and Local Stage

Article and Video featuring Patrick Browne, Director of Global Sustainability, UPS
Collaborative planning is bringing transformational solutions to environmental challenges in cities… Read more
Seattle ebike

News
Here are a few highlights to keep you up-to-date

UPS To Launch First-Of-Its-Kind U.S. Urban Delivery Solution in Seattle

The new eBike "plug and play" design has removable cargo containers that will provide greater flexibility to meet varying delivery needs… Read more

UPS Recognized By EPA with Smartway Excellence Award

The U.S. Environmental Protection Agency (EPA) presented UPS with a SmartWay Excellence award, which recognizes leading carriers who have made significant contributions to reducing the impact of freight transportation on air quality… Read more

5th Annual "Wishes Delivered"

Take a moment to be inspired. We’re delivering a few special wishes to individuals in the communities we serve… Watch the Videos
Trends
Innovations and Collaborations

Conversation Starter: New Research on Fleet Electrification

You've read about the findings – now see them for yourself. Explore our new white paper, Curve Ahead: The Future of Commercial Fleet Electrification.
EVENTS
Here's Where You'll Find Us

JAN
16
 

WEBINAR | How Circular Thinking is Transforming Sustainable E-Commerce

Join Crystal Lassiter, UPS Senior Director of Global Sustainability, and our reverse logistics partner Optoro as they discuss the link between circular thinking and sustainable e-commerce. Register here today!

FEB
26–28
 

PHOENIX | GreenBiz19

Join Crystal Lassiter in a workshop exploring "the electrification of everything," and Quint Marini, UPS Package Engineering Manager, as he unpacks packaging innovations that are changing the market.

MAR
21
 

LONDON | Economist Sustainability Summit

Join Peter Harris, UPS Europe Director of Sustainability, as he shares the latest in UPS's efforts to collaborate with cities and curb emissions.

In Case You Missed It

Here are two interviews from the GreenBiz VERGE conference that will bring you up to speed on smart grid technology and the value of partnership.

Scott Phillippi on strategic fleet electrification and smart grid technology

UPS Senior Director of Maintenance and Engineering, Scott Phillippi, knows that the opportunities for electrification are endless. "We're on the cusp of getting to where there are solutions that are affordable and make sense, and that can tie into good business reasons."

Tom Madrecki on driving the transition to alternative-fuel fleets

UPS Director of Urban Innovation and Mobility, Tom Madrecki, confirms the value of partnership among OEMs, fleet owners and manufacturers, and cities – and addresses the opportunities still awaiting action.
This publication was created to bring you sustainability insights and stories that we hope will inspire you. A new issue will be provided every few months. We welcome your comments and ideas. Drop us a line: sustainability@ups.com.
"Our horizon is as distant as our mind's eye wishes it to be."
~ Jim Casey, UPS Founder and CEO, 1954
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