What’s Driving the Electric Delivery Revolution?

When we look at EV transition, we often tend to focus on big themes like net zero and government legislation. In reality, the impact of electrification is much closer to home – literally. Retailers are increasingly integrating EVs into their last mile delivery fleets. What makes for good CSR credentials also meets demands from consumers whose decisions are being driven by factors like cost and environmental concerns. These trends are reflected in a report from Retail Economics, The Ecommerce Delivery Benchmark Report 2023 which identified delivery priorities and sustainability as two of the key trends facing retailers. The very trends that are driving customer decisions.  

Delivery Cost Is a Priority 

The cost-of-living crisis is putting retailers under pressure to lower costs wherever they can. As household budgets are pushed to the limit, consumers want to get the best value for money. Often this means scouring the internet for the lowest prices and delivery options.  

Retail customers have a tendency to prioritise cost over convenience. In the Retail Economics report, 32% of consumers surveyed said that the cost of delivery was the most important factor when shopping for products online, up from 27% in 2022. The cost of delivery is an important conversion factor.  

For retailers, EV delivery is ultimately cheaper (and less harmful) than petrol or diesel vans. We say ‘ultimately’ as there is an inevitable cost of new vehicles and installing the charging infrastructure – fleets tend to be upgraded every 3-5 years, depending on whether the asset is leased, contract hired, or owned. Once the chargers are installed, however, retailers and delivery fleet operators will see cost savings as EVs are more efficient and the cost of charging at a depot is cheaper than the price of a full tank of petrol or diesel.   

The average Internal Combustion Engine (ICE) loses around 60% of the energy available from fuel through heat and friction, which makes it only 40% efficient. In short, ICE engines consume more energy to travel the same distance as an EV. EVs are also cheaper to maintain due to fewer moving parts. Obviously, no vehicle is maintenance-free, but service schedules tend to be less frequent than ICEs, and EVs are lighter on tires and brakes, thanks to regenerative braking. We cover a cost comparison between EVs and ICE vehicles in another of our blogs.  

For last mile deliveries within low-emission zones (LEZ and ULEZ), EVs have an obvious advantage cost-wise as well, being exempt from charges. All of this means that retailers who opt to electrify their last mile deliveries can pass the cost savings onto customers and improve their competitiveness.   

Championing Sustainability and the Environment  

Consumers are increasingly embracing sustainability. According to Deloitte’s annual survey of consumer attitudes and behaviours, 30% of people surveyed have opted for low carbon emissions and/or shared modes of transport. This is a big jump up from 19% in 2021 and is likely to grow more as we all become more aware of the impact climate change is having.   

The focus on environmental priorities is certainly reflected in the Retail Economics survey where sustainability is top of mind for many shoppers. In the UK, 79% said they would consider options to make the delivery of their online orders more sustainable. 

However green deliveries are not seen as a main priority for many retailers. Only 18% considered sustainability and lowering environmental impact in their deliveries was very important. We think this is going to change. At Mer, we’re seeing this change in attitude among retailers play out in real time.  

Making Delivery Services Electric  

That’s a lot of talk, let’s look at electric last mile deliveries in action.  

We have recently worked with DX Freight which provides logistics and delivery services to B&Q, Timpson’s, and IKEA. DX Freight has shared its EV last-mile delivery story with us. And IKEA itself also recently announced a major EV infrastructure investment with Mer. 

 Meanwhile, milk delivery companies must be congratulating themselves for getting in on the act early. Really, really early! Milk floats have been powered by electricity since the 1800s. In 2018, Mer (then Elmtronics) was on hand to upgrade Milk and More’s charging infrastructure for its modernised fleet.  

Trust in Mer 

Mer is very much at the forefront of last-mile delivery electrification. We’re helping retailers use data from Mer charge points, retailers, and delivery operators to get a better view of how their last-mile fleets are working, and how they can be improved to ensure better delivery processes, deliver cost efficiencies and improve the customer experience.   

With that in mind, we have produced a guide for retailers and delivery operators who are looking to transition their last mile delivery fleets to electric vehicles. Why not check it out?