Deep Cover

Recent feats in battery electric commercial vehicles are starting to be felt, after an indomitable period of pre-awareness, on the frontlines of supply chains.

DHL in Australia, for its part, has been a forerunner in this area having made initial investments in different zero emission tailpipe commercial vehicle technologies over a cross-section of applications headlined by a new Volvo FM Electric prime mover late last year.

It joins a fleet of existing Euro 6 European cabovers from Mercedes-Benz, Scania and Volvo.

“Obviously, being a European-based business, a lot of our partnerships are sourced from Europe and that’s where our pricing is negotiated from a procurement perspective,” says Bill Rolfe, DHL Supply Chain Senior Vice President of Transport for Australia and New Zealand.

“We’re running a mixture of European brands. The bulk of the trailering fleet are Vawdreys or Freighters. We partner with OEMs for quality of product. That’s been the reason for our purchasing partners in the past.”

Compliant with Strategy 2030, a global DHL corporate roadmap, the company has set out a charter to be the ‘Green Logistics of Choice’ provider.

Over the next five years the stated ambition is to reduce its vehicle emissions across the last mile task by 66 per cent.

Naturally, this will require an adaptation in fleet management and asset expenditure when procuring vehicles not powered by internal combustion engines.

Future fleet updates will incorporate vehicles powered by electric, hybrid-electric or hydrogen drivetrains when they’re capable of performing the same duties as their diesel equivalent.

“The plan is in motion, and here at DHL, we will partner with customers on their green journey toward reduced emissions,” says Bill.

“As we move away from the traditional diesel units that have made up Australia’s truck fleets for many years, we’re going through a learning process together with our global teams and our OEM partners to best understand how we can integrate electric vehicles into our fleet in the most efficient and cost-effective manner.”

The role of the newest electric trucks in the fleet, which also includes a Volvo FL Electric and two SEA Electric rigids, is to shuttle cargo from its warehouses in Sydney and Melbourne to DHL’s transport hubs.

DHL recently introduced 20 Mercedes-Benz eSprinter vans that take consignments from the transport hubs directly to where its customers require them including retail stores or directly to their customers.

“These vehicles are fulfilling these duties while performing the role of reducing emissions from our fleet, while requiring less maintenance,” says Bill.

“Since its arrival in October, our electric prime mover has prevented over 100 metric tonnes of carbon emissions from entering the atmosphere compared to an equivalent diesel-engine vehicle.”

For DHL, the strongest gains that the BEVs provide are in the advantages it can offer customers while meeting its own sustainability goals.

“It’s important for us to start the journey toward less emissions,” says Bill.

“The arrival of our EV fleet means we can start to support our customers’ targeted transitions to net zero emissions with our end-to-end transport solutions while providing warehousing services that also use renewable energy fitted with other useful sustainability measures.”

The electric vehicle rollout over the next five years will honour the global commitments made by DHL including the goal of electrifying a majority of the last mile delivery vehicles by 2030.

The reporting for carbon emissions is self-created through Microsoft Power BI.

Data builds off a number of information sources from power bills, fuel consumption and vehicle configurations that is, in turn, fed back into the system which can be used to forecast transportation emissions.

The target will factor in an accumulation of data collected across divisions from many countries.

“It’s very much a global target which we will be supporting regionally,” says Bill. “All countries have been given the target of 66 per cent.”

Renewable fuels like Hydro Treated Vegetable Oil or HVO is another solution, increasingly being sought after by fleets who are looking to neutralise their emissions particularly in internal combustion platforms, that DHL is open to.

Much would depend on whether an initiative is led by industry, suppliers or government according to Bill.

“We would have a strong willingness to participate but it’s not provided at scale anywhere yet,” he says.

“We’ve got really good business cases and user-examples in the UK but there’s nothing available in Australia.”

Even so, before the year 2030 DHL Supply Chain will replace dozens of assets when their useful life would have already expired.

Bill is cognisant that the middle mile has not yet been solved in electrified truck transport. Using BEVs over long distances are, at least in the short-term, is restricted as a prospect.

“Pickup and Delivery fleet obviously does a lot of regional work based on the footprint of the country we’re in,” he notes.

“Without solving middle mile, we still have a long PUD model where drivers are out in heavy vehicles for ten, 12 or even 14-hour days under BFM accreditation and so the reality is we need to be able to carry the payload and work the hours.”

Upon reviewing DHL’s customer satisfaction scores, which have trended upwards for sustainability in recent years, Bill and his team can see that customers believe these fleet upgrades are important and recognise the inherent challenges.

The CXM NPS program was first introduced locally in 2016. It gives a net promoter score which is monitored globally by the organisation and covers everything from service innovation, continuous improvement (CI), systems and more. DHL Supply Chain conducts the program three times a year.

“Customer satisfaction is one of our key pillars in terms of ultimate deliverables across the organisation,” says Bill.

“We see this as part of our partnership with our customers.”

Joining the organisation two-and-half years ago, Bill came on board following the high-profile acquisition of the Glen Cameron Group, a period of heightened activity.

“It’s been a very exciting time but also integrations present lots of challenges and opportunities as you work your way through two businesses and what’s the best way to bring them together and support your growth aspirations,” Bill says.

“The teams from both organisations have been incredibly supportive and they’ve gelled together really well. It’s gone to plan from a systems, safety and people perspective. Now we’re focused on moving forward and delivering on our growth aspirations.”

The size, scale, and reach of DHL’s Australian operations provides it with several advantages in fleet management and vehicle additions.

These include significant buying power and the development of strong relationships with suppliers.

DHL now operates over 36,000 electric vehicles globally, and every major DHL region operates electric vehicles in the last mile.

To anticipate growth in this area in Australia, DHL has optimised its access to the energy grid with use of solar panels, onsite batteries and zero-emissions offset electricity, an initiative managed by its Property and Infrastructure teams.

“All sites will feature provisions to manage vehicle charging, as more of our truck and van fleet is transitioned to electric vehicles,” says Bill.

These Transport Hubs incorporate sustainability features including building management systems, LED lighting and water capture.

Energy comes from either rooftop solar arrays or from carbon neutral sources. To enable rapid and accurate distribution of large volumes of a variety of package types, DHL is planning to roll out advanced automated sortation systems at the Melbourne and Sydney sites.

Last December DHL Supply Chain broke ground on a new transport hub in Derrimut where a substantial double-sided loading area will be incorporated to increase throughput capacity when compared to its current transport facility.

“This will allow us to better serve customers in the retail, technology, automotive, life science, and healthcare sectors,” says Bill.

“The Sydney and Adelaide sites will feature the same to help streamline local deliveries and interstate linehaul freight and keep up with the growth expected in the sectors we serve.”

Due for completion next month, the new Derrimut site will help facilitate the ongoing growth of DHL’s Transport sector, with 16,600m² of additional warehouse and office space. A recent expansion in Tasmania through direct investment in its own premises, vehicles and team, now gives DHL an employee base in every state.

Having a presence in the Apple Isle furthers opportunities to build upon their revenue base according to Bill.

“We have certainly seen it as a delivering state as opposed to a sending state,” he says. “So, it’s another addition that allows for us to grow. It then gives us greater control over that last mile performance.”

Considered a gateway for expanding and integrating DHL global initiatives, Tasmania, insofar as the confines of Australia’s smallest state might offer European-like short haul replication suitable for committing to a commercial electric vehicle network, Bill regards most metro areas ideal for BEV application.

“The biggest challenge is where we will have infrastructure to support the EV journey,” he says.

“It’s making sure that you have the infrastructure attached to a building that you know you’re going to be in for the next ten plus years for obvious reasons. If you think your lifespan is only five years than it doesn’t necessarily make sense to invest in all that infrastructure to only leave it behind.”

Directly operating pallet and carton transport services in Tasmania, DHL covers all traditional retail consumer goods from life science, healthcare and beverages.

“DHL is unique in that we offer a national carton and pallet solution, dedicated 3PL transport and warehousing,” he says. “We feel as though we’ve got all those markets covered and we just want to grow deeper into those markets.”