Small transport companies that want to transition to electric vehicles will never succeed. But should we want them to? That was an exciting question at a workshop on grid congestion, where companies offering renewable energy were present.
The Dutch National Charging Infrastructure Agenda has found numerous solutions to grid congestion. However, those measures come at a cost and require scarce materials and personnel for construction.
Small transport companies have a structural cost disadvantage
Approximately 80% of companies in the Dutch transportation sector have fewer than 20 employees, and there are more than 5,000 carriers. Those SME haulers have 20% of the trucks. Smaller operators incur higher costs for their charging infrastructure due to the high initial investment and annual operating costs associated with it.
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 at a 1:0 disadvantage 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 fewer engineering and mechanical resources you need per charge point. For small operators, it is 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. However, financing vehicles is challenging, grid congestion is almost insoluble for individual companies, and charging infrastructure is expensive. They also have a structural cost disadvantage. So, should we?
From the standpoint of challenging and ambitious climate goals, aren’t we better off partnering with the large transportation companies and shippers that have extensive 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. Perhaps your current A-location will no longer be suitable, and you must now choose an E-location. The logistics hubs of the future are shared facilities that bundle transportation with other entrepreneurs, share capacities and loading infrastructure, and innovate to serve customers 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 that bundle transportation with other entrepreneurs, share capacities and charging infrastructure, and innovate 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