Small transport companies who want to go electric? They’ll never succeed. But should we want them to? That was an exciting question at a workshop on grid congestion with companies offering renewable energy.
The Dutch National Charging Infrastructure Agenda has found numerous solutions to grid congestion. But, those measures cost money and take up scarce materials and people for construction.
Small transport companies have a structural cost disadvantage
About 80% of companies in the Dutch transportation sector have fewer than 20 employees and more than 5,000 carriers. Those SME haulers have 20% of the trucks. Smaller operators have higher costs for their charging infrastructure, with the high initial investment and annual costs for operating that charging infrastructure.
Power costs those small business owners 13 to 18 cents more per kWh than large business owners. That structural cost disadvantage puts you as a small business owner immediately 1:0 behind in the transportation market. More giant haulers spend a quarter to half as much per kWh. And those energy costs are a quarter of your total costs as a hauler….
Small business owners are slowing down the transition
Building charging infrastructure requires engineering and mechanics (including maintenance). The larger the installation, the less engineering and mechanics you need per charge point. For small operators, it is as much as twice as much. Solving grid congestion and charging infrastructure will take too long; bigger is better!
Should it be done differently?
Small transport companies want to go electric? The hurdles to finance vehicles are high, grid congestion is almost insoluble for individual companies, and the cost of charging infrastructure is high. And they have a structural cost disadvantage. So should we want to?
From the standpoint of challenging, ambitious climate goals, aren’t we better off going with the big transportation companies and shippers with large distribution centers? Can we not achieve 80% of the climate goals for road transport with 20% of the effort?
Should the small transport entrepreneurs then disappear with a cold clean-up? Government support offers temporary relief. But is that support a ‘no regret’ measure? The cost of electricity is structurally too high for small entrepreneurs who want to manage it themselves.
From A-location to E-location
There is only one message for SME carriers (and smaller shippers with their own transport). You have to work together. Maybe your current A-location will no longer fit, and you must choose an E-location now. The logistics hubs of the future are shared facilities: bundling transportation with other entrepreneurs, sharing capacities and loading infrastructure together, and innovating to serve the customer better and better. Forget that you can manage it yourself. Electric driving requires much more than just buying an electric truck.
The logistics hubs of the future are shared facilities: bundling transportation with other entrepreneurs, sharing capacities and charging infrastructure, and innovating together to provide ever-better customer service. Forget that you can manage it yourself. Electric driving requires much more than just buying an electric truck.
Level playing field?
The proposed climate measures are going to disrupt the transportation market. The level playing field based on familiar diesel technology is disappearing. Instead, there will be an uneven playing field with selective access for entrepreneurs (small and large) to scarce logistics space for hubs, personnel, data, energy, and, not least, financing. I am curious how the sector views this.
Walther Ploos van Amstel