Enabling sustainable last mile delivery by using electric vehicles

Abstract

Abstract: Although it covers relatively short transport distances, last mile delivery (LMD)accounts for 53% of total shipping costs and it is also the least energy efficient part of transportin the supply chain. Advantages of electric vehicles over conventional vehicles with internalcombustion engines mainly refer to the environmental and mechanical aspects, while theirmain disadvantage, limited operational range, is not a problem in the LMD, as most of theelectric delivery vehicles have sufficient range for this purpose. It makes them a suitablealternative to the conventional delivery vehicles, which may direct the LMD towardssustainable transport. With reference to that, we conducted a case study of the company thatprovides parcel distribution service, to outline the practical implications of using electricvehicles in terms of the LMD sustainability.

1. INTRODUCTION
The last mile delivery (LMD) is performed in the final stage of the supply chain, via dedicateddistribution centers or cross dock terminals, mostly within the urban area, affecting lead timesand customer satisfaction in a direct way. Although it covers relatively short transportdistances, studies (Jacobsen, 2022) have shown this part of the supply chain accounted for 53%of total shipping costs and this percentage is expected to increase in the future. The LMD isalso the least energy efficient part of transport in the supply chain (Afshari, Parsaee, Sharifabadand Sorooshian, 2022).Advantages of electric vehicles over conventional vehicles with internal combustion enginemainly refer to the environmental and mechanical aspects, such as zero emission of harmfulgreenhouse gases, higher energy efficiency of the electric engine itself, and lower noise level.It is that due to their potential to lower greenhouse gas emissions and reliance on fossil fuels,electric vehicles are a growingly well-liked form of transport because an electric vehicle drawspower from rechargeable batteries which has been shown as their main disadvantage becauseit makes them inferior in terms of operative range. However, this is not a problem in the LMD,as most of the electric delivery vehicles have sufficient range for this purpose, which makesthem suitable alternative to the conventional delivery vehicles, which may direct the LMDtowards sustainable transport (Đurđ, 2018) and (Alanazi, 2023).Transportation activities involve side effects (externalities), such as noise pollution, pollution,and traffic congestion, which affect city development strategies. Given that the transport sectoris accounted for more than 25% of the world energy consumption, and that energy productionincreases air pollution, these externalities must be considered to ensure a sustainable growth oftransportation systems worldwide (De Armas, Faulin, Grasman, Juan and Mendez, 2016).
2. METHODOLOGY
This paper outlines the benefits and disadvantages of using electric vehicles in LMD, bycomparative analysis of the relevant features of both conventional vehicles with internalcombustion engines and their electric counterparts.For this purpose, we conducted a case study of the company that provides parcel distributionservice in LMD, which operates 20 regional warehouses and one central warehouse in Croatia,more than 210 parcel machines and the fleet of 550 delivery vehicles. Within the case study,we observed the regional warehouse in Sesvete (Zagreb) which uses a fleet of 19 conventionalvehicles and nine electric vehicles for its daily operations. On average, electric vehicles make60 km daily, while conventional vehicles make 110 km daily.The comparative analysis covered financial indicators (purchase price with and withoutgovernment incentives, leasing costs, fuel/power costs, maintenance costs, infrastructurecosts), as well as performance and ecological indicators (fuel/power consumption, autonomy,operative availability, noise, and CO2 emissions). The option of self-produced electric energywas considered, as the Company uses solar panels to power their charging stations.
3. RESULTS AND CONCLUSIONS
The procurement costs of electric vehicles are initially higher than the costs of conventionalvehicles with internal combustion engines, although the difference decreases in case thegovernment incentives are granted.The infrastructure costs for electric vehicle fleet vary depending on location, type of charger,and required capacity, which also affect operative availability.Power consumption of electric vehicles varies from around 24,3 kWh/100 km to around 32,1kWh/100 km depending on speed, weather conditions, driving style of driving and routecharacteristics.The direct costs of charging electric vehicles are significantly lower than the costs of dieselvehicles, even if 100% power comes from public network. The average weekly cost of chargingelectric version of Renault Kangoo (dominant vehicle of that category in the Company fleet)is 5,12 € while refueling diesel version costs 174,00 € per week, on average. This difference iseven greater when utilizing power produced by solar panels, so it should be sufficient tocompensate the costs of infrastructure (charging stations and solar panels) over the designatedinvestment period.In general, the maintenance costs of electric vehicles are lower compared to conventionalvehicles, since electric vehicles have fewer moving components, they face less temperaturestress and do not need consumables such as oil and filters. Also, due to the possibility torecuperate energy whilst braking, the braking pads last longer (Lebeau, Lebeau, Macharis, VanMierlo, 2013).As for the operative autonomy (range), electric vehicles are suitable for LMD because thedeliveries are performed over short distances (no more than 100 km daily in total), which is nota problem in terms of the battery capacity.From an ecological standpoint, the full lifetime difference in overall carbon footprint of anelectric delivery vehicle is almost 34% lower than its diesel counterpart (Rantamäki, 2022).Also, there is a significant reduction in noise pollution, during idle time the difference isapproximately 15 dB, at speed between 15 km/h and 50 km/h the difference is between 5 dBand 6 dB, while at higher speed there is no significant difference (Jabben, Potma, Verheijen,2012).Using electric delivery vehicles as an alternative to the conventional vehicles in the LMD goesin line with the principles of sustainable transport. Although substantial investments in thevehicle fleet and infrastructure are required initially, it pays of within the designated investmentperiod of no more than five years (or shorter if the government incentives are granted) andraises profitability of transport operations on the long term