For fleets who have invested heavily in battery electric vehicles, many of the myths around EV viability, at least in commercial applications, are fast being dispelled.
Companies such as All Purpose Transport and ANC have progressed past the early adopter stage with significant advances in operations and expertise to represent edge cases that don’t so much evolve the current market but redefine it when it comes to the traditional role of investment, partner role and points of difference for customers.
ANC is closing in on a milestone. Only 18 months ago they had just three battery electric vehicles in the fleet. The technology was first generation and had been acquired through a direct investment to test and learn.
But after receiving ARENA funding to support their mission to create a sustainable delivery model for customers in the last mile, they accelerated deployment.
Today, the business has nearly 100 electric vehicles in its integrated fleet. ANC, according to Chief Growth & Sustainability Officer Mo Abbas, doesn’t own a single one of them.
“Our delivery drivers own them,” he says. “We create the right incentives for them to buy them outright and own them.”
Notwithstanding the elimination of fuel combustion emissions, BEVs are one vector for helping to bring a new class of professionals into the industry.
ANC and other carriers are now recognising this as a potential outcome. This future demographic is mostly blue-collar workers, migrants to Australia, and young people trying to forge new small business enterprises.
For the contractors making a commitment to buy a battery electric vehicle, ANC will prioritise them work over drivers with internal combustion engines.
Mo likens it to how Uber operates with five-star rated drivers being assigned fares over four-star drivers.
“In our case, if you make the purchase and you own the green vehicle, we’ll give you more work and more incentive to earn more over anyone else who has a diesel equivalent,” he says.
“So, we prioritise a green vehicle over a brown vehicle. We give them first right of refusal on new scopes of work that might be easier or might be more financially lucrative.”
Some funds from ARENA are redirected to subsidise their capital purchase for subcontractors to make asset acquisition cheaper. That can be achieved through bulk purchasing.
“They can purchase the vehicles substantially cheaper than they can secure the vehicle from the market,” says Mo.
“We get deep discounts on the upfront capital cost, and we’ve got partnerships with energy providers and charging providers, which makes it easier for them to charge anywhere they like at a much lower cost than anyone else.”
The platform business model, synonymous with e-commerce, is a feature of the early adopter model in the battery electric fleet domain.
In Brisbane, All Purpose Transport is rolling out something similar. Its fleet has grown to 40 electric vehicles in little more than 12 months.
“What we’ve got now is some stability in the EV space whereas the equipment we bought back in 2019 is now end of life,” says Paul Kahlert, Chief Executive Officer.
“The big learnings we got there was while the equipment was hellishly expensive the end of life is the end of life. There’s not a market there for second-hand Frankenstein machines.”
One of the few benefits to arise from COVID was the instant asset write-off scheme which allowed businesses to eliminate those first generation EV purchases off the balance sheet.
With subsequent generations the BEV vehicles are becoming more reliable as All Purpose, which presently runs JAC and Hyundai light electric trucks and Ford and LDV electric vans, has found.
Having OEM adjacent product helps.
“They are not modified vehicles and that’s been a big advantage to us,” says Paul.
“We’ve now got good quality, reliability and dealer support.”
Previously, dealer support was limited. Now they can take a Ford eTransit to any Ford dealer in Australia where it can get fixed and repaired and put back on the road.
“Also, if there is a fault with the equipment, Ford is very good a providing a replacement vehicle while the other equipment is repaired,” says Paul.
“Beforehand it was on us to go out and get hire equipment and it was another cost to the whole operation as well.”
All Purpose Transport initially outlaid ten charging points at their depot in Berrinba. They’ve also got charging options at pickup points at IKEA stores and warehouses.
“What we’ve found, of the ten charging points we’ve put in, probably 60-70 per cent of them are used overnight,” says Paul.
“Now because of their size, the vehicles are going back to our owner drivers’ homes where they have set up charging.”
Some of these drivers have installed solar and batteries. During the day they fill up the battery before emptying it into the van overnight. From a running perspective, according to Paul, it’s reducing their vehicle’s running costs.
“From a commercial point of view, it’s a good thing for them because they can offset those costs against their tax,” he says.
“Setting up charging infrastructure for their business which is what they’re doing at home is all tax deductible as well.”
In Western Australia, Goldstar Transport were the first carrier to introduce an electric truck into operations with the first-generation Fuso eCanter.
The business sent a cohort including Managing Director Sean Carren to the United States and Europe to get a better understanding of what was happening at the time in battery electric vehicles.
Sean views it as an opportunity to engage with the 25 and under demographic that road transport has struggled to attract in recent years.
“It’s about appealing to a different demographic in the transport realm and bringing them into the transport industry,” he says.
“One of the challenges that you have with this is getting people on board. That younger demographic is really enthusiastic about the EV journey.”
Range anxiety, as it was at Goldstar Transport, is often a concern prone to a battery electric debutant in a fleet. They were determined not to get caught out for lack of curiosity.
A test, early on in deployment, was undertaken to drain the battery just to see how far the truck could travel under load and what would happen when it did and how to deal with such a scenario.
“It met with significant resistance through the process of rolling out that vehicle,” says Sean.
“By the time we finished the trial everybody wanted to keep it.”
But it remains up to the transport provider to find customers willing to share the commercial burden of early adoption.
Capital expenditure can be daunting. Solutions need to be built that can recover the cost of these investments which are almost three times that of an equivalent diesel truck.
Though prices are slowly moving towards parity, there must be integration of many operational parts.
“Getting the right EV with the right person for the right task and you’ll end up with a successful outcome,” says Sean.
“You’ll make a difference to the environment.”
He adds, “Without the people you won’t make it work.” Infrastructure is no less a critical consideration for BEV integration.
Mo acknowledges there are many barriers to the commercial application of battery electric vehicles in the country but believes the edge cases, of which ANC is one, can, all the same, empower momentum within the market.
It’s for this reason he doesn’t attend electric vehicle summits any longer with much of the dialogue at the events circumventing around the one theme: it’s hard. Whether it be infrastructure, charging outlets or the barriers of insurance.
“It’s absolutely true and we’ve faced into all of those complexities,” he says.
“How do we solve some of those? How do we turn barriers into opportunities? Public access charging for large format vehicles like vans and trucks, absolutely that’s challenging but we’re making do with what we have and we’re continuing to agitate at a local government level and at an ARENA level to solve some of those remaining barriers.”
While the bulk of their volume is on the eastern seaboard between New South Wales and Victoria, the fleet has BEVs operating in all the major markets.
For the month of May, ANC reported it had moved 1.9 million kilograms of freight emissions free. That equates to ten per cent of all client deliveries. Broken down even further, the data reveals that they delivered 37,000 parcels on the BEV fleet which travelled over 160,000 kilometres.
“For the month of June, we trended up from that with 13.3 per cent of consignments EV deliveries,” says Mo.
“We deployed a few more vehicles in Victoria. I’m confident at the other end of the scale we’ll get north of 15 per cent in deliveries.”
Measured against inhouse targets, these are, at the very least, encouraging signs of gradual scale with plans in place to pivot where needed.
The first three vehicles in the ANC EV fleet provided key discoveries of which they could put to use.
For one, they didn’t have the right vehicle configuration for the freight profile of the client. The LDV electric vans they were using were reconfigured for last mile needs.
Originally, the van had a 12-cubic-metre capacity featuring a 1.3-tonne payload with single rear ground tyres on a standard car licence.
At that stage it was really just a van that didn’t have an internal combustion engine. ANC modified the cab chassis so it would have dual rear tyres, additional traction stability, increased to an 88kWh battery for added range and 1.5 tonne payload then put a lightweight pantech body on it.
That increased the 12-cubic-metre capacity to 20 cubic metres.
“In last mile, efficiency and scale are paramount so you can do more product deliveries, take more vehicles off the road, and give clients the ability to shrink their fleet size, making the economics of going green easier for them,” explains Mo.
“That’s an ideal vehicle for us now. We’ll make another modification based on what we’ve learnt now to give us even more payload and cubic capacity. We’ve standardised this vehicle now across our fleet.”
ANC also runs 27 JAC N90 trucks with a payload of up to 9-tonnes. These are the latest generation in the series and arrived late last year.
At ANC, the customer solution is approached in a three-act structure — learn, plan and execute.
For existing clients who want to pursue a BEV strategy, customers are advised to put a toe in the water according to Mo.
“Let’s not go crazy on day one and poach the whole fleet,” he says.
“Let’s take a percentage of your fleet, let’s learn about your ESG goals, let’s understand what it is you want to achieve, and let’s understand your current carbon footprint and your emissions. Let’s plan to grow.”
There’s always a jumping off point. For a business with say, five per cent Scope 3 emissions, they would look to deploy five battery electric vehicles.
“Let’s prove to you that some of your deeply held assumptions might not be correct,” he says.
“Then you scale up from there.”
Part of it is about finding ways to make the EV delivery relevant to the customer.
“All of our EVs carry a badge. It’s significant in size. You can’t miss it. It says I’m an EV. We thank the customer and thank them for trying to make a difference. So that makes them feel good about the purchase. That in turn makes it relevant for the drive who we call a delivery professional. The driver gets treated well and that puts further incentive on them because it’s a virtuous circle, the more sales we can create for the merchant, the more deliveries we get, the more work the driver gets, the better the customer feels and the better for the environment and local community.”
All Purpose now has EVs travelling as far south as Byron Bay, as far west as Toowoomba and as far north as Noosa on a regular basis.
Of its 40 EVs only eight are trucks. The rest are high cube vans which have similar volume capacity to the small trucks.
“What we’re finding now is you can charge those at shopping centres or at bp or at Ampol and you can get access because they’re very narrow spaces when it comes to charging,” says Paul.
“The trucks can’t necessarily get into charge because of their width but the vans don’t have an issue with the space provided.”
To service Byron Bay, the driver on that route, will drive down to Coolangatta.
At the airport there is a fast charge. From there, the driver proceeds to Byron Bay and returns via Coolangatta for a fast charge and then onto Brisbane to preload for the next day.
All Purpose have been working on a target of 59 days to get 93 per cent of deliveries done for IKEA via their battery electric vehicles. As the vehicles are managed under fatigue management top-up charging works within the parameters of rest breaks.
“Because you’re operating under these rules anyway, the allocators are actually building the runs, dropping them near a charging point and therefore the driver is then taking his mandatory rest while he’s doing it [charging]”, says Paul.
“In the case of 15 minutes that’s a fast charge. He bangs in 20kW of electricity in those 15 minutes and what it gets him is another 50 or 100 kilometres. He can then sit down and get a full battery in that half hour on a fast charge. Then in the afternoon he tops it up on the way back.”
As a result, fleet managers are now scheduling the charging with the rest breaks. The driver, in turn, looks to find the closest charge point. All Purpose Transport’s operations including its 18,000m² warehouse all run independently ‘off-grid’ during daylight hours.
That reduces their emissions by 56 tonne C0₂ a month. While it’s not on par with what they produce in total as a fleet it’s a good start.
In the last 12 months a big shift has taken place in the reporting of ESG requirements for large global companies. IKEA is one of them.
Their carrier partners are required to report their C0₂ usage downstream of that. Power capture such as solar, commercial battery, recycled water, are now the rule rather than the exception at most depots and warehouses.
One of All Purpose’s customers have opened a new warehouse and involved it in the decision-making process of where to locate the EV charging station.
“A lot of people make the mistake of putting the EV chargers in the carpark,” says Paul.
“That’s completely useless for us. So logically, the best place for an EV charger is to be at the loading point. Therefore, what they’ve done is put three-phase plugs in all of the loading points. It’s not dock height but level floor, but they’ve put three-phase plugs along the wall there in preparation to retrofit a charger.”
While vehicles are sitting there being loaded, which takes about 45 minutes, it permits an opportunistic charge for the driver.
Staff, under this model, can utilise the chargers for Teslas and other EV passenger cars during the day but at nighttime the trucks can benefit from access by having two different types of charging scenarios.
All Purpose is already in conversations to replicate something similar with another customer on the south side with a view of swinging a truck in there and paying a fee for service.
Charge Fox, for instance, uses an RFID card. IKEA has installed charge station in a third-party warehouse.
The chargers, however, are charge as you go. That encourages third parties to come into the warehouse to use the charging facilities.
“They then get a commercial return on that as well,” says Paul.
“What you’re starting to see is when people are designing warehouses they’re thinking where do I put the EV plugs.”
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