The roadmap to autonomous electric transport for the retail industry

Retailers are facing pressure from customers according to KPMG to act on their sustainability goals. The increasing awareness of sustainability throughout the entire supply chain, according to Forbes, extends to transport, but current solutions with diesel vehicles are not enough to meet emissions reduction goals. To achieve environmentally-friendly road freight that is cost-effective, autonomous electric transport (AET) is the only way forward.

In the coming years, the world will experience an increase in transport according to FAU as a result of expanding e-commerce, which has been further amplified by the COVID-19 pandemic, according to Forbes, where many consumers have transitioned to online shopping. In retailing, transport is already one of the main sources of CO₂e emissions according to a paper on carbon dioxide emissions, and in general, road freight accounts for 7% of the global total according to the ITF. The EU climate strategy aims for net-zero greenhouse gas emissions by 2050 according to the European Commission, but diesel transport alone is predicted to contribute to a 15% growth in total global emissions according to the ITF in the same period. The considerable gap between the target and predictions underscores the importance of rapid change for road freight.

Additionally, approximately half of all retail activities according to McKinsey could be automated with today's technology, significantly improving productivity and reducing cost. With high pressure on margins, it becomes harder for retailers to stay competitive. In response, retailers can use automation to boost these margins. The opportunity for automation reaches beyond in-store self-checkouts and digital shelves to the entire supply chain according to McKinsey.

Faster supply chains, increasing profits, and a lower climate impact is needed for retailers to stay competitive. Electric trucks reduce CO₂e emissions significantly, and automation results in cost-reductions and higher efficiency, making it a beneficial combination. However, a transition to a fully electric and autonomous fleet will not happen overnight. To scale up, the first step is to digitize, which allows for optimized planning of the coming electric and autonomous trucks.

Digitizing transport flows for flexibility and electrification readiness

Digitization is a prerequisite for the speed according to the International Journal of Retail & Distribution Management, flexibility, and efficiency needed to compete in the tough retail environment. An increasing interest in fast deliveries according to Blume in combination with unpredictable demand according to Capgemini enhances the risk of stockouts. Forecasting can provide some insights on future demand, but when the accuracy of the forecast reaches around 75-80 %, it is more valuable to rely on reactive capabilities according to McKinsey. A solution enabling flexibility through dynamic route planning is key to be able to handle last-minute orders and other unexpected events. Today, rudimentary software systems are often used to map the transportation routes, and transport solutions remain unsustainable because of diesel. With expectations of quick, last-minute deliveries being the standard, these methods are no longer adequate.

The transition from diesel freight to electric and autonomous requires an intelligent planning tool to be able to account for the increased complexity in the network. With extended data collection, companies can make more informed decisions and ensure successful implementation on a large scale. The weight of the goods, variations in topography, weather conditions, and the need for refrigerated goods are only a few of the aspects that can affect the range of the trucks, and may make electric vehicles seem like an unsuitable direct alternative to diesel trucks. However, a freight mobility operating system accounts for these variables, and not only matches diesel in terms of demand, but significantly reduces CO₂e emissions and other harmful pollutants. This is the only way to effectively plan for electric - and ultimately autonomous - transport solutions that will be both cost-effective and sustainable.

Electrification to improve your sustainability profile

The incremental advancements in diesel engine technology are insufficient to achieve a major reduction of CO₂e and NOx particles according to the ITF. Simply put: electric vehicles are the only way forward for sustainable freight. But electric vehicles cannot be treated as a direct replacement for diesel. With digital tools, the freight network can be analyzed to find where in the supply chain it would make the most impact to electrify, and how to implement and make use of charging infrastructure and scheduling.

Increasing environmental awareness according to KPMG among customers gives sustainable companies a chance to boost brand identity, and with retailers close consumer contact they can easily show their sustainability efforts. Moreover, imminent bans on diesel vehicles in major cities according to Bloomburg pose a distinct threat to the retail industry. Being emission-free and low-noise makes electric vehicles unaffected by these regulations, and are therefore well-suited for urban transport and deliveries to stores in city centers.

In general, the low weight of retail goods and ability to stack them in palettes make for a perfect use case for electric vehicles, since battery charging is required less frequently than in other applications. However, transporting temperature-controlled goods can strain the electric battery of the vehicle. To tackle the problem, a digital optimization platform can be used to organize the routes in which electric trucks have the most impact, while the rest of the network remains intact. A solution for the electric transport of refrigerated goods is already in place with businesses in Sweden. Electrification in combination with digitalization yields short-term sustainability benefits, but it also prepares for the transition to autonomy.

Autonomous freight for maximum efficiency and cost-effectiveness

Digitalization and electrification enable emission reductions at a cost-competitive price, but the benefits of electrified freight are amplified exponentially by automation. With autonomous electric transport (AET) coordinated by a freight mobility platform, CO₂e emissions can be reduced almost entirely, and operation costs can be cut in half. These cost reductions illustrate a competitive advantage for retailers as it could be used to lower product prices in stores or strengthen profit margins.

Automated systems are becoming more common in retail according to McKinsey, with self-checkout expanding rapidly and contactless stores popping up in cities around the world, but it is time for retailers to prepare for the adoption of autonomous freight as well. The introduction of driverless vehicles increases scheduling rates and improves optimization, ultimately enabling more efficient supply chains. Trucks drivers will transition to operators and work remotely, monitoring self-driving vehicles and only taking active control for unseen or complicated maneuvers, such as navigating complicated urban environments. With an AET solution, the average working day for a network of vehicles can be extended from 8 to 24 hours, and thus increase productivity by up to 200%.

How to get started

With constant pressure from customers, suppliers, and regulators, retailers must be adaptive and innovative, including when it comes to transport. But current diesel and pen-and-paper transport solutions do not offer sustainability or cost-competitiveness, and will not be able to keep up with demand. Einride’s three-step solution is already in practice today with major multinational companies in Sweden, and is designed to make the transition to sustainable, autonomous freight cost-effective and intelligent.

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