Right vehicle for the right application: The challenges of decarbonising the van sector
What's the future for low carbon Light Commercial Vehicles (LCVs) and last mile logistics? James Courtenay-Evans, Managing Director Transport, Lloyds Bank and Chris Chandler, Principal Consultant, Fleet Consultancy, Lex Autolease explore the issues
Van traffic has been consistently the highest growth segment in UK road use over the past 25 years and accounted for 51bn vehicle miles in 2018, up 19.7% over the past 5 years. In contrast car miles have increased by 6.3% and HGV miles by 9% over the same period (DfT Road Traffic Estimates 2018; 14 May 2019).
The growth in van miles has been mirrored by the number of additional vans on the road, with van registrations up 13.5% in 12 months to June 2019 (SMMT figures, July 2019), while average miles per van have remained fairly stable.
One of the key drivers for this trend is the growth in internet shopping and home deliveries.
Internet sales as a percentage of total retail sales in the UK has grown from 8.3% in August 2012 to 18.2% in August 2019 (ONS figures at 19/09/19) indicating both the strength of growth in the segment but also how much potential further growth there is to come.
In addition, more demanding consumers are driving same-day and next day deliveries, and higher levels of product returns increase the pressure on the market to grow.
The number of vans on the road in UK cities represents a significant challenge to congestion and air quality which is likely to continue without changes both to fleet makeup and vehicle utilisation models.
While van traffic has been growing faster than any other segment the adoption of low carbon vehicles has lagged behind both private car and buses.
This has been driven by a fragmented industry, less effective tax incentives and the cost, availability and capabilities (mainly payload) of electric vehicles and charging infrastructure.
At present full electric vans are focused on smaller sized models but there are new, larger models becoming available in both BEV and PHEV models.
Low Emission Zones pose a particular challenge and opportunity for last mile logistics providers.
Big hill to climb
At present it is estimated that 80% of UK vans are pre-Euro 6, with that figure expected to fall to 50% by the time the Greater London Ultra Low Emissions Zone (ULEZ) comes into force in 2021.
While there is a natural progression to LCVs that will be ULEZ compliant there will be a large proportion of the total fleet that is not.
Euro 6 vans are not the perfect solution either, with AdBlue and DPF issues for vans used in urban environments and of course no guarantee that traditionally fuelled vehicles meeting Euro 6 will be exempt in the longer term.
LEZs have the potential to offer operators of ULEV fleets a competitive advantage in operating costs as well as sustainability credentials.
Implementing bespoke fleet charging infrastructure, sophisticated fleet planning and optimisation and end-to-end multi modal solutions are likely to favour larger, specialist operators, providing an opportunity to consolidate the market.
Data presents opportunities
On the subject of fleet optimisation and multi-modal solutions, the increasing use of data for route planning, parcel consolidation, shift between different motorised and cycle/ foot solutions and pricing models to incentivise transport-efficient consumer behaviour presents a further opportunity for last mile operators to differentiate their operations.
The the use of consolidation centres in land-restricted urban environments and asset sharing across transport modes create potential innovative partnerships between companies in very different segments.
ITT Hub will bring together a wealth of expertise in the low carbon LCV and last mile logistics segments including;
- LCV OEMs
- Logistics operators
- Policy makers and City and CAZ planners
- Charging infrastructure providers
- Public transport providers
- Transport data experts
- Finance providers
Future developments in sustainable, low carbon solutions to urban traffic and last mile deliveries is a critical area for Lloyds and many of our customers across multiple sectors. These challenges and opportunities are fundamentally linked to our goals to support transport decarbonisation by 2030 and helping Britain prosper.
Lex Autolease is the leading provider of financing for ULEV van fleets with a current fleet of nearly 3,000 zero emission pure electric vehicles of which over 600 are light commercial vans.
Our focus is to identify where electric vehicles are best suited to operate and ensure that those vehicles available, are matched to the operational requirements of the business. Understanding how and where electric vehicles are most effective allows Lex Autolease to maximise the environmental benefits and cost savings that can be delivered from the latest zero emission vehicles.
Using this 'right vehicle for the right application' approach we have award winning fleets such as BAE Systems in Portsmouth Naval Base and The University of Birmingham who have light commercial vehicle fleets where over 40% of the vehicles are zero emission.
By using Contract Hire, the often higher purchase cost of electric vehicles can be amortised over the lease term, whilst the operational cost savings from tax and fuel can make these vehicles very affordable on a daily basis, with many of our customers finding electric vehicles much cheaper to operate than diesel equivalents.
Focusing on urban applications ensures the environmental benefits of these vehicles are maximised and the customer’s business can continue without restrictions or charges when entering any major UK city both now and into the foreseeable future.
For more information, visit Lex Autolease's support pages: https://www.lexautolease.co.uk/business/quotes-offers/vans/electric-vans
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