Travis Katz, CEO & President, BrightDrop.
Online shopping and instant deliveries have become an essential part of modern life. The on-demand economy has added more convenience than ever to our lives, allowing us to buy things from groceries to furniture with the swipe of a screen and have them delivered to our doorstep in days, if not hours.
The pandemic dramatically increased consumers’ dependence on online deliveries, and this behavioral shift shows no sign of letting up. Global e-commerce generated $4 trillion in 2020 and is expected to grow an additional 75% by 2025.
FedEx estimates that this year the U.S. market could reach 100 million packages each day. Demand for same-day and instant deliveries continues to surge, growing at rates of 36% and 17% per year, respectively.
While supply chain disruption, workforce shortages and late deliveries grab most of the headlines today, most people don’t realize that this exponential growth in e-commerce deliveries also comes with significant social and environmental costs. In particular, e-commerce is driving growing carbon emissions and worsening traffic congestion in urban areas. The World Economic Forum (WEF) estimates that emissions from urban last-mile delivery will increase by over 30% by 2030—reaching 25 million tons of CO2 emitted annually if there’s no change. The consequences of continued emissions growth are hard to understate and have already begun manifesting themselves in a series of “once-in-a-lifetime” weather-related disasters, from wildfires to flooding. The same study estimates that deliveries alone will add an additional 11 minutes on average to people’s daily commutes in the same period.
There is an urgent need for action, and the private sector is stepping up. Major delivery companies have put in place aggressive sustainability goals and are actively seeking ways to reduce their carbon footprint and impact on congestion. For example, e-commerce giants like Walmart, as well as delivery titans like FedEx, are targeting carbon-neutral operations by 2040.
Meeting these ambitious goals will require innovation across every part of the supply chain. How will they get there? Tackling carbon emissions from the transport of goods is an obvious priority, and there’s some good progress being made on that front. A recent report from the Department of Energy (DOE) projects that by 2030, many long-haul trucks will be “cheaper to buy, operate, and maintain as zero-emissions vehicles than traditional diesel-powered combustion engine vehicles.”
Electric vehicles for last-mile delivery are another big part of the answer and are on a similar trajectory toward zero emissions at a lower total cost of ownership. On average, fleet customers can save more than $7,000 per vehicle per year when moving from a traditional diesel step van to an electric vehicle, driven by dramatically lower fuel costs, as well as reduced maintenance, based on our estimates. These economic benefits mean fleets are ready to move now and are looking to move fast. The world is just beginning to understand the potential of electric light commercial vehicles (eLCV).
Advances in machine learning and artificial intelligence, connectivity and other innovations also offer critical ways to reduce the carbon footprint of e-commerce delivery without forfeiting convenience. With technologies available today, fleets can maximize productivity and efficiency by mapping seamless routes and designing delivery solutions with city streets in mind to avoid clogging our roadways and further polluting our planet. A new generation of solutions is emerging—from electrically propelled carts and sidewalk delivery robots to drones—that can ease urban congestion and reduce the physical strain on delivery workers.
Electrifying last-mile delivery will begin to have an impact on reducing greenhouse gas emissions and congestion in major, vehicle-dense cities like Los Angeles, which often ranks among the most congested urban areas in the U.S. The moment is now. We have an opportunity to redefine e-commerce for the better—delivering convenience at our fingertips while delivering a more livable planet for us all.
An all-electric future is a tall order, but it is achievable—that is, if we urge each other on as individuals and as businesses and focus on progress, not perfection. Some of the smartest people I know have shifted their career focus to companies where they can apply their talents to making a difference. In the race to net-zero, we all stand to win—and we can’t afford to lose. Follow along as I continue to address these topics and more in subsequent articles.