Why small road carriers are a big part of the solution to decarbonise freight
What are some questions or concerns our carrier partners specifically struggle with?
A common challenge for SME carriers is access to financing to be able to bring in low-emission vehicles and infrastructure. An electric heavy-duty vehicle can currently cost between two and three times that of a diesel equivalent and needs investment into charging infrastructure to support it. The UK’s Green Finance Institute estimates that around £100bn is required to transition the UK’s half a million HDVs to zero-tailpipe-emissions (which includes new vehicles, plus charging infrastructure requirements). Looking at ways to help SMEs navigate the total cost of ownership of electric trucks, and to access support to finance them, is incredibly important.
Our SME partners can also struggle with the complexity associated with a change of this scale. Moving from diesel to zero-tailpipe-emission trucks isn’t just a straight swap–it requires new ways of working, new skills, new operating and financial models. In the near term, this complexity of change means it’s likely that large companies like Kuehne+Nagel will move first, and SMEs will follow our lead, and will require specific and sustained support to do so.
The direction is clear though–the UK Government has already set end-of-sale dates for new HDVs that have tailpipe emissions. Sales of those trucks up to 26 tonnes will end in the UK from 2035, and then all new HDVs sold will have to be zero-tailpipe-emission vehicles from 2040.
What specific actions have you taken already?
Kate: About two years ago, the UK Government started exploring a road freight decarbonisation grant initiative called the ‘Zero Emission HGV and Infrastructure Demonstrator Programme’ (ZEHID). Even ahead of its launch, we engaged with policymakers and industry partners to make the case for shaping the scheme in a way that would support small and medium-sized carriers and not just the bigger players.[1]
Within our own supply chain, we launched workshops, calls and meetings with a selection of around 30 of our carriers to tell them about the ZEHID initiative. We’ve tried to act as a gateway for those carriers to join the programme.
What has been the outcome of those efforts?
Kate: Late last year, we were thrilled to see the ZEHID programme officially launch, with over £200m in UK Government funding awarded via Innovate UK. In total four consortiums were successful, securing this grant funding to deploy around 370 zero-tailpipe-emission HDVs and infrastructure across the UK.
The exciting thing about ZEHID is that it is specifically aimed at the hardest to decarbonise end of trucking, so 40 tonne+ HDVs, and over long-distance routes.
We are in two out of the four consortiums on the programme, along with about a dozen of our SME haulier partners. Together we will be part of the deployment of a new network of public chargers for electric trucks, we’ll be exploring innovative Megawatt Charging technology, and running heavy-duty electric vehicles in real-world operational environments, thanks to this UK Government grant funding.
The programme will run until 2030, with electric HDVs hitting the roads over the next 18 months. Our East Midlands Gateway site, in Derby, is likely to be our main hub for charging infrastructure, with work already underway to develop our solution.
What are you expecting to learn from this programme?
We’re excited about the knowledge that will come out of ZEHID. We’ll be deploying these electric HDVs across different duty cycles and in different environments to find out how they perform under real-world conditions.
We’ll also gain great insights into how we can support our small and medium-sized carriers to come on this journey with us, ready to scale up our learning across our supply chain.
This unique project will be a great step forward for them, for us and for the entire industry. This initiative shows once again that collaboration between industry, government and policy makers is a vital part of the solution for decarbonising logistics.
Which other actions is Kuehne+Nagel taking to support road carriers’ transition?
Kate: As I said, we want to use our voice to drive change in our sector. So as of late last year, Kuehne+Nagel was invited to represent the logistics sector on the UK Government’s Net Zero Council. This forum brings together government, business, and finance to help identify and unlock barriers to decarbonisation across all sectors of the economy, with a strong focus on the needs of SMEs. We’re proud to represent our sector. [2]
Outside of the UK, Kuehne+Nagel colleagues are active in similar initiatives, representing the needs of our SME carriers, for example in the World Economic Forum’s Road Freight Zero coalition.
And of course, our customers are what drive us to all of this. So whether on our electric trucks in France, or our electric vans and HDVs in the UK, we’re excited to continue to bring solutions to market and to help drive progress to a more sustainable future together. [3]
Thank you Kate for the insights, and keep inspiring change!
*Source: https://www.klu.org/fileadmin/klu.org/media/landingpages/SMEstudy/SFC-KLU_report_v5i.pdf
References
- ^ Zero Emission HGV and Infrastructure Demonstrator Programme (uk.kuehne-nagel.com)
- ^ Net Zero Council (www.gov.uk)
- ^ electric trucks in France (newsroom.kuehne-nagel.com)