Wolt – creating incentives for the EV transition by delivery partners BOX 3 Wolt, a quick-commerce grocery delivery business, has introduced 17 sustainable vehicle types and is conducting pilot projects to gauge their suitability in different markets. The company has implemented a leasing and financing programme in partnership with financial institutions to help its courier partners access modern, zero-emission vehicles and reduce emissions from deliveries.21 Customer engagement As retailers look to improve the efficiency of deliveries, speed can sometimes be compromised to allow for greater consolidation. However, communicating the benefits of this to customers is crucial. Swiggy, a food delivery company in India, offers an eco-saver delivery option where orders are grouped. While the time to deliver the food increases marginally, customers are compensated via a discount and the company reduces the number of trips and increases delivery partner income.22 2.3 Delivery companies National postal operators are increasingly finding themselves competing with courier, express and parcel (CEP) businesses due to the decline in letter volumes and the surge in package deliveries. Companies such as the Royal Mail in the UK are also more involved in delivering larger, bulky items that customers previously purchased in traditional stores and transported themselves.23 IKEA’s new retail strategy, for example, involves inner-city showroom stores that hold less inventory. Home deliveries are then often conducted using bigger vehicles, which can face operational challenges due to local regulations.24 There are regional differences, but industry is already investing in technology to electrify, consolidate, re-time and optimize routing of delivery vehicles. Microhubs and PUDO networks are also part of this strategy. Investment in these areas is set to continue despite the high capital costs involved.25 Fleet electrification A key investment area is fleet electrification, particularly for last-mile deliveries. Although capital-intensive, it is easier to implement than solutions requiring extensive external collaboration. Legislation, where it exists, creates incentives for the shift from internal combustion engine (ICE) vehicles, simplifying compliance. Larger CEP businesses and new players typically have the capital for this transition, while smaller operators may need additional support. Despite some supply-side delays, CEP businesses such as DHL and retailers such as Ingka Group are working with OEMs, including Renault and MAN, to bring custom zero-emission fleets to market.26 Automotive manufacturer Hero MotoCorp and EV rental service Vammo support EV adoption by addressing high capital costs through financing options27 and range challenges with battery- swapping technology,28 while Evolectric converts existing ICE fleets to EVs at about 50% of the cost of new medium-duty EV trucks.29 A major barrier remains the availability of fast- charging infrastructure, but progress is evident in many cities. Amazon’s CHALET tool to identify suitable charging locations30 exemplifies industry collaboration. Hero MotoCorp is also collaborating with other OEMs to establish an interoperable fast- charging network for micromobility fleets, operating in more than 100 Indian cities. However, significant investment in zero-emission fleets and charging infrastructure is still required from both the private and public sectors. Hitachi ZeroCarbon – integrated and shared energy hubs BOX 4 There are regional differences, but industry is already investing in technology to electrify, consolidate, re-time and optimize routing of delivery vehicles. Hitachi ZeroCarbon is revolutionizing EV charging for fleet management by partnering with fleet operators to develop decarbonization strategies that transition traditional depots to efficient electric hubs. These hubs use data and AI to optimize charging schedules and reduce strain on local energy grids, substantially reducing the cost of grid upgrades. Depots that can generate and store energy efficiently can also generate additional revenue streams by making these spaces available to last-mile operators.31 Transforming Urban Logistics: Sustainable and Efficient Last-Mile Delivery in Cities 13

Transforming Urban Logistics 2024