The Pandemic has transformed consumer shopping habits. And most people now consider online shopping as their default option. Quicker delivery methods and hyperlocal shopping have expanded mainly in the past two years to satisfy the demand for online shopping worldwide.
Nowadays, the majority of customer satisfaction depends on convenience. So, the value of convenience for customers has become the top priority. It is a vital aspect that drives the most reliable, faster, and successful last-mile performance.
The increase in online shopping has also contributed to the growing number of vehicles working for last-mile functions. The logistics cost can quickly determine how the last-mile delivery firms are performing. Analysts expect more and more companies to use electric vehicles for last-mile delivery. It is due to the total cost of vehicle ownership; the savings electric vehicles provide in the long run, and the growing environmental concerns.
Opting for electric vehicles in last-mile delivery operations
Because of green supply chains, many companies are now switching to electric vehicles instead of conventional ones for last-mile delivery. This is because they must remain competitive with sustainability trends. This transition will have multiple positive impacts on society and the retailers involved.
The main benefits of using electric vehicles for last-mile delivery are lower pollutants and low fuel consumption. There is a direct connection between the entire logistics cost and gasoline consumption. Electric vehicles reduce operating costs because they consume less fuel.
Last-mile operations switching to sustainable delivery
Electric vehicles have been trending for a long time. However, their sustainability and efficiency recently attracted last-mile delivery companies.
Below are some latest examples mentioned :
- Domino’s announced the incorporation of 800 Chevy Bolt EVs across all US stores.
- Walmart is purchasing more than 4000 EVs for delivery.
- Amazon includes hundreds of custom EVs from Rivian.
Electric vehicles offer several benefits for delivery companies. However, their limited fixed range primarily benefits last-mile delivery operations.
Examples of last-mile delivery operations include grocery, milk, home service delivery, e-commerce, and retail store delivery.
Using artificial intelligence to optimize delivery routes and daily deliveries can help businesses lower mileage and improve last-mile visibility. Companies’ strategies for electric vehicles can influence other organizations with similar missions. It will also help analyze their benefits and switch to electric vehicles to achieve a brighter and greener future.
Complete analysis of the cost-benefit in last-mile operations
Fleet operators may get more electric vehicles into their fleets in the upcoming years. Because the total ownership cost of EVs is lower than that of internal combustion engine vehicles (ICE).
Total Cost of Ownership is a way for commercial users to calculate their vehicle fleet’s total cost of ownership (TCO). TCO accounts for all costs associated with owning and managing a vehicle. It includes initial purchase costs, maintenance, insurance, fuel, and residual value.
Government subsidies and the falling cost of li-on batteries are the main drivers of this cost parity. Lithium-ion batteries are standard for energy storage. Due to its long life, large supply base, and economies of scale, lithium-ion battery manufacturing methods and technologies are mass-produced.
EVs are very economical in terms of running costs when compared to ICE vehicles. The electric vehicle cost is much lower than the cost of a conventional internal combustion engine after constant usage.
Approximately 50% of the overall cost of owning electric vehicles was estimated to be spent on batters alone in 2016. So, when batteries only cost around 20% of the overall cost of owning electric vehicles by 2023, that number will decline by approximately 14% annually.
Forecasts of the electric vehicle market
The Custom Market Insights report, Global Electric Vehicle Market, clearly depicts that the market of EVs or electric vehicles will get an excellent hike at a compound annual growth rate (CAGR) of 23%. It will reach around $1105 billion in 2032 due to several subsidies, government policies, and emerging concerns about several environmental problems.