As complicated it may sounds, purchasing electric trucks was actually the easy part of making the switch, according to Jim O’Leary, NFI’s vice president of assets.
“When we first started, I just cared about the trucks,” he explains.
“Just give me a truck and we’ll plug it in and go. At least that’s what I thought! But what I and my team soon realised is that it’s all about the infrastructure. That’s where the rubber meets the road.”
NFI’s electric truck investment coincided with a decision to move its drayage team from Chino to Ontario, which is several miles north. It owns a warehouse in the area, which is where the new offices have been built. Meanwhile, a four-acre site next door was purchased, and earmarked for electric truck charging.
“We are installing 38 350kW dispensers with 19 power cabinets, and each one can support two chargers. These are capable of charging two trucks each, so the power will be split,” O’Leary tells us.
Now for the really clever bit. NFI has also installed a pair of batteries, giving it 7.7MWh of storage. This means it can draw from the grid off-peak, and avoid the expensive peak-load 4pm to 9pm period. It has also installed 1MWh of solar panels on the building’s roof next door.
O’Leary explains that the whole process was fraught with obstacles, and while it was initially supposed to have been completed by the end of 2022, in reality it won’t be fully up and running until this August. Instead it currently has 10 dispensers in operation, which are powered by a temporary service.
When all 38 dispensers are in operation, NFI will have the ability to bring in 7MW of power. To put that into perspective, it is about the same amount of electricity that’s needed to power the Empire State Building.
“Each truck will use 400kW to 600kW of power a day. So, two of them will use the same amount of power as a normal house for an entire month,” he reveals.
While this impressive set-up represents a significant six-figure investment, NFI’s cost has largely been limited to buying the trucks, the land, and preparing the facilities. In terms of putting in the chargers, batteries and solar panels, these have been the subject of external funding.
“In California, the infrastructure side is supported by multiple programmes,” says Brian Webb, NFI’s president of port services. In this instance the majority of the funding has come courtesy of CARB, CEC, and South Coast AQMD.
Despite financial assistance, electrifying the drayage fleet has not been a cheap process. In fact, the entire project, including the real estate acquisition, has cost in the region of $45m. O’Leary explains that while the financial incentives have certainly helped, and indeed have made the project viable, there is still a significant gap between the actual cost of operating electric trucks and the incentives provided. He confirms that where possible, NFI will strive to minimise any cost increase to its customers during the switch.
“And this is vital if we’re going to continue down this path,” he says.
“Now, more than ever, our customers are demanding that we do these things [run electric trucks], but they aren’t necessarily willing to pay for them. Customers have zero emission targets, but due to the cost, they are looking at other parts of their supply chain to reduce emissions ahead of transportation. If regulators heard this, perhaps they would apply the brake pedal a little.”
Jessica Cordero, NFI’s VP of drayage operations confirms that up until very recently it has been a struggle to get customers to pay extra to have their products transported in electric trucks.
“They have been willing to try it, but without any additional fees,” she says.
But she says this is starting to change, thanks to South Coast AQMD’s WAIRE (Warehouse Actions and Investments to Reduce Emissions) scheme. This complicated legislation financially penalises companies for the number of diesel truck visits to their warehouses.
“Now customers are realising that if they pay a little over here, they won’t pay as much over there.”
The whole project has certainly represented a steep learning curve for the entire NFI management team. “You have to hold the hand of the project all the way, whether you’re deploying two trucks or 50 trucks,” says O’Leary. “A lot of resources are being sucked up – lawyers, real estate group, financing, fleet, operations… Everybody needs to be all-in, and the partners too. It’s not for the faint of heart!”
That said, all involved are convinced that it’s been worth the effort, and are confident of reaping the rewards going forwards.
“Having had conversations with customers, we are in an absolutely great position to continue to grow our business,” says Webb.
“The work the team has done at the ground level is paying dividends for us. We have absolutely made the right choice.”
