April 4, 2023 | Product Management Solutions

Electric vehicles (EVs) have been the focus of a great deal of attention in recent years. EVs have existed for a while but have seen a huge surge in popularity and demand in the last five years. No doubt, EVs are the future, since they are environmentally friendly, aimed at lowering fuel consumption and pollution levels, and are the perfect choice for the country’s upcoming 100 smart cities. In a report by NITI Aayog and Rocky Mountain Institute, India can reduce logistics costs by 4% of its GDP and save 10 GT of CO2 by 2030 by implementing clean technologies, including electric vehicles.

It appears that these numbers are achievable since logistics companies throughout the country are placing high stakes on the adoption of sustainability in transportation.The logistics industry is investing heavily in electric vehicles (EVs) to make their operations cost-effective and sustainable. Due to the increasing link between the logistics industry and electric mobility, EVs have proven to be a worthwhile investment. The government’s subsidy program and various economic factors have greatly influenced the use of sustainable vehicles for freight, goods, and packages

However, most logistics companies today are using EVs, but only for last-mile deliveries given that it is challenging to deliver long distances on a single charge, so it will take some time for EVs to become a cost-effective mode of transportation for logistics companies. The high manoeuvrability and small carbon footprint of EVs make them ideal for last-mile delivery. Additionally, they promote pollution-free circulation, reduce carbon emissions significantly, and are beneficial to compact city centres, urban spaces, and indoor areas.

In addition to providing ongoing savings in operation and maintenance, improving delivery services, routing efficiencies, and increasing brand value, electric vehicles can also promote significant additional value for companies. In their quest for more efficient, effective, and reliable delivery services, logistics companies are learning that electric vehicles are both innovative and sustainable long-term investments. Moreover, their offerings have the potential to disrupt the entire logistics and transportation industry. Here are some of the impacts of electric vehicles on India’s logistics industry:

  • Reduced Cost of Ownership: With new government policies and new technologies being adopted in the electric vehicle industry, TCO (Total Cost of Ownership) is declining significantly. Battery swapping is a new technique that considers batteries as separate entities; therefore, energy operators can own them. This method also reduces the upfront cost of EV usage, particularly for intra-city logistics.
  • Environment-friendly: ICE road transport contributes majorly towards polluting the environment with toxic gases. Electric mobility in the logistics sector will have a major role to play in effectively dealing with the environmental issues created by ICE vehicles.
  • Reduced fuel and maintenance costs: One of the significant impacts of electric vehicles on the logistics industry is a reduction in fuel and maintenance costs. The cost of charging an electric vehicle is much lower than the cost of filling a tank of diesel or petrol. Also, electric vehicles have fewer moving parts than conventional vehicles, which means that maintenance costs are lower.
  • Reduced Last Mile Logistics Costs: EVs are more economical alternatives for last-mile logistics for supply chain companies. Due to the simple structure of EVs, fleet tracking and optimization can be easily integrated with modern technologies. A proper tracking system and optimization can reduce costs associated with last-minute logistics.
  • Support From Government Initiatives: The Indian government has introduced several incentives to promote electric vehicles, including subsidies and tax breaks. These incentives could help logistics companies offset the higher initial cost of purchasing electric vehicles.
  • Scope Of Retro-fitment In Intra City Logistics: In India, many states in consultation with the Government have planned an easier mechanism for an exit strategy for EV enterprises. To support logistics players and drivers, with seamless transition solutions companies providing EV conversion systems with an aim to provide affordable electric mobility in all segments of society.
  • Focus On End User and Operator Benefit: With the asset-light options springing up in relation to intra-city transport vehicles like three-wheelers, two-wheelers, and LCVs, the total cost benefits are appreciated not only by the operator but by the passengers/end users also.

    As a result of the above discussion about the impact of EVs on logistics, it was concluded that fuel-driven vehicles will eventually become a thing of the past and companies must switch to EVs as soon as possible. Due to its advantages over its counterparts, electric vehicles are the future. Electric vehicle use in the logistics sector has various benefits, including reduced costs, more efficiency, and sustainability. However, there are certain issues that still need to be addressed, like

  • Technology Adaptability: Although using electric vehicles for last-mile logistics is a good alternative, customers are still not entirely at ease with the technology. Indian transport mix is still dominated by conventional vehicles.
  • Higher initial cost of EVs with roughly half the expense of these accumulating to batteries. Many supply chain enterprises are aiming to replace their conventional vehicles with electric vehicles for last-mile logistics. The high acquisition costs of these cars make it an economically unviable proposition to replace the whole fleet of conventional vehicles.
  • Limited charging infrastructure is another major constraint in the adoption of electric vehicles for the logistics sector. With the increasing demand for electric vehicles, more charging infrastructure is required. Because of the lack of charging infrastructure, the acceptability of electric mobility logistics is restricted.
  • Range anxiety: Another obstacle to the logistics of electric mobility is range anxiety. The restricted amount of energy stored in their batteries determines their limited driving range, which results in inadequate mileage for a trip. Moreover, it takes longer to charge batteries again.

These challenges must be addressed in order to encourage the widespread use of electric vehicles in India. In this regard, battery changing is a fantastic option for making electric vehicles more economical. For the logistics sector to completely utilize electric vehicles for a range of transportation purposes, innovation, and technological advancements must be made continuously.

TVS Supply Chain Solution delivery provides trusted delivery services across pan India. We have the access to a global distribution fleet, working with some of the best and most proficient carriers in the marketplace which mean we can ship your product however and whenever you or your customer needs it, at whatever time of day. TVS SCS offers various secondary transportation models, including In-city, full truckload, reverse Milk run, Storage & redelivery, etc., as per customer requirements. We use a Dynamic routing-based In-city model for effective time-bound delivery at an optimal cost within the city—full truckload & consolidation model for scattered long-distance delivery points.

TVS SCS offers a unique range of supply chain services that touch multiple points throughout the supply chain, providing an innovative distribution network, transport resources, and IT Support Services. This approach allows our clients to hold their goods closer to their customers and satisfy the most demanding delivery requirements. Our transactional pricing model also provides a safe harbor given the unpredictability that has entered the demand stream. We have seen that the more services our clients use the greater the cost and saving efficiencies they are able to realize for their business.

POSTED ON April 4, 2023