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Electrification in the Supply Chain: From Forklifts to Last Mile
Everyone’s talking about heat pumps and electric semis, but there’s much more to electrification – and there are easy wins to be had, sometimes in unexpected places.
The supply chain has several natural applications for electric vehicles, from forklifts to drayage. Moreover, the cold chain is rapidly transitioning to electric Transport Refrigeration Units (eTRUs). The opportunities for value creation are vast – for facilities, for fleets, and for communities.
Electric forklifts
Electric forklifts are not new, but they are gaining in popularity thanks to:
- Lower operating costs
- Smoother, quieter, and more responsive operation
- Lower emissions and improved safety
Moreover, forklift battery chargers can easily be used as responsive assets to provide load flexibility to the power grid during peak events. This can help companies save money and earn revenue through efforts like peak avoidance and demand response.
One unusual requirement that has stymied electric forklift conversions is the need to have an eye wash station at each battery charger due to the battery chemicals, both lead acid and lithium ion. Certain companies (namely those with nearby green hydrogen suppliers) have opted to install hydrogen fueling stations inside their facilities instead.
Electric terminal tractors (yard goats)
Electric terminal tractors are being deployed at cold storage facilities to drive down emissions and operating costs. Given the heavy usage of these trucks at warehouses, switching from diesel to electric can eliminate more than 100 tons of CO2 per truck annually, along with related pollution.
Because their range is inherently limited, these trucks can switch to electric with no range anxiety whatsoever. Moreover, they can sometimes charge using Level 2 chargers, rather than the DC fast chargers typically needed for road-worthy electric trucks (depending on their duty cycle). This involves much less infrastructure investment.
Electric drayage trucks
Electric trucking makes the most sense over short, well-understood routes. Drayage is a perfect fit. These “first mile” trucks carry goods to and from seaports and intermodal rail yards over short and well-defined distances.
California’s recently adopted Advanced Clean Fleets Regulation requires drayage truck owners to start transitioning to zero-emissions technology effective immediately. Some existing diesel trucks may continue operating until 2035, but all new drayage trucks in the state must be emissions-free as of January 1, 2024.
Electrification appears to be outcompeting hydrogen for drayage as in most other applications, although chargers can be very difficult to site in these already congested areas. Drayage truck operators would be wise to invest in their own private charging networks – and to start the process extremely early, given transformer lead times and interconnection constraints.
Electric Transport Refrigeration Units (eTRUs)
In the cold chain, TRUs or “reefers” have been an often-overlooked source of costs and emissions. That is rapidly changing with the adoption of both hybrid and fully electric eTRUs.
Similar to drayage trucks, some diesel TRUs are being phased out by the California Air Resources Board – and the regulations apply to companies based anywhere in the world if they operate trucks in the state. Although CARB’s reefer trailer regulations were struck down, the regulations still apply to truck-mounted TRUs.
Effective this year, truck TRU owners must replace 15% of their California-bound fleet each year with Zero Emissions models. A dozen other states may follow suit, leading to 100% truck TRU electrification in these states by the end of the decade.
While these regulations may seem severe, the good news is there are savings to be had. One eTRU can save over $100 a day thanks to higher efficiency. That’s $15,000-$20,000 in added value each year, or roughly a 5-year payback for carriers, while also providing a new revenue opportunity for facilities. In California, there is also the value of Low-Carbon Fuel Standard incentives.
Last mile electrification
Delivery vehicles are another bright spot for electrification. One major reason is that they reduce driver fatigue and increase driver recruitment and retention. With frequent city driving and lots of stops, electric vans and delivery trucks are not only more efficient and sustainable, but much more pleasant to drive.
These fleet vehicles also often return to a central location at night where they can charge up during off-peak times. With proper planning and demand management, these depots are ideal early adopters of transport electrification. Many of the same constraints above still apply, but success stories are beginning to pile up anyway.
Considerations for facilities looking to electrify
Electrification brings up a number of questions for facility owners and operators, like how to manage charging and how to monetize the savings. To answer those questions, a new and more holistic energy management paradigm is needed – one that provides real-time visibility and suggestions for smart charging as well as automated billing.
To manage these large new loads, facilities will need to upgrade their electric infrastructure. Done right, however, the required investment in new infrastructure can be significantly reduced by implementing a managed charging program that monitors and controls loads in real time to prevent major demand spikes. This can also save operating costs by avoiding on-peak electric rates and excessive demand charges.
Facilities may also charge haulers for their on-site power consumption if they have the right technology. This includes revenue-grade submetering and a software system that integrates energy data with Warehouse Management Systems. This approach allows sites to track power consumption by customer, and to invoice each accordingly.
One other question is who can claim carbon credits for electrification projects, if anyone. This remains an open question, but it’s clear that highly granular carbon data will be needed to determine the real-life carbon impacts of these projects – specifically real-time data from each zip code rather than the annual, state-wide emissions factors that are traditionally used in carbon accounting.
Equity through electrification
It’s worth noting cold chain facilities are predominantly located in disadvantaged areas. These communities will benefit significantly from reduced particulate matter pollution from diesel-powered trucks and TRUs. In fact, this is one of California’s primary motivations for the regulations above.
The California Air Resources Board found that a cold chain facility with 8,000 TRU operating hours per week causes elevated cancer risk for nearly 1,800 people per million living within 25 miles downwind of the facility, with both risk and area of exposure increasing significantly when two or more warehouses operate near each other.
These risks are all too common in communities near ports, intermodal railyards, and drayage routes. This means that electrification in the cold chain not only saves money and reduces pollution, but also promotes equity. It’s a rare triple-bottom-line win – and we haven’t even mentioned electric semis.
