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Singapore, April 2: The Singapore government had recently announced in its 2022 budget that it would be accelerating the adoption of electric vehicles (EVs) in its tiny nation and gradually phase out combustion vehicles by 2040.
As more EVs are manufactured and distributed within the region, industry players will need to fulfil the demand for more charging infrastructure, batteries, and other parts which are also complex to move and distribute.
Naturally, the transportation of clean vehicles and the necessary infrastructure must be done via equally green logistics solutions, making the whole supply chain journey cleaner.
What are logistics players doing to ensure that the drive towards EVs stays green, efficient and timely?
With demand and production expected to increase in the coming years, what are the challenges in moving EVs in Singapore or the region, and how will logistics companies go about achieving success?
To answer all these questions in-depth and give us more perspective on the matter, we recently interviewed transport company Kuehne+Nagel Asia Pacific Region SVP Sales and Marketing Senior Vice President Marcus Balzereit for some insights. Without further ado let’s read the interview below.
What does the EV logistics sector look like in the region at the moment?
The EV logistics sector in APAC has been growing – as many EV parts are manufactured in Asian countries such as China, Japan and South Korea. Market size is expected to reach 3.8 million EV cars being sold in APAC in 2030 which would be around 10-15 per cent of the market by then.
This adoption of EVs is driven by three factors such as government environmental goals, the willingness of consumers and businesses to buy electric vehicles and the ability to build and charge batteries sustainably.
The overall EV demand has increased amongst consumers due to changing government regulations and increasing desire for sustainable mobility solutions, as countries continue to increase their support for fighting climate change and working to improve air quality.
Just as consumers and regulators are demanding more sustainable cars, they are also paying attention to how these cars are developed and transported. Companies have started to measure their carbon emissions for each leg transported and place an emphasis on offsetting carbon emissions by investing in various environmental projects. Zero-emission transportation solutions are also in high demand, and logistics players are being increasingly challenged to offer solutions there.
Finally, supply chain disruptions have also caused a ripple effect in sustainable logistics. With efforts are being made to decarbonise the supply chains, it is no longer acceptable to ship semi-finished products three times around the world before eventually arriving at the point of sale because today’s consumers pay more attention to where the vehicles are made and prefer to purchase regional products to reduce the risk of supply chain disruptions and unwanted production downtime. This also impacts how we think about transporting EVs to end-consumers in an environmentally friendly, cost-efficient, and time-sensitive manner.
What are you expecting to see in the future of EV logistics?
The EV market is a rapidly growing one, as more people begin to see the importance of reducing fuel emissions, and as EVs become more accessible. With this growing adoption, however, industry players will need to fulfil the demand for more charging infrastructure, batteries, and other parts which are also complex to move and distribute. Shipping of these vehicles, parts and EV infrastructure will typically require huge shipments and a lot of fuel and energy, and EV suppliers, manufacturers, and logistics providers need to look for greener and more sustainable solutions.
To overcome these challenges, Kuehne+Nagel has invested heavily in new systems and technologies to make our customer’s supply chain management more efficient – with load and route optimisation, multi-modal solutions, and full visibility of the entire supply chain process. When customers have the visual and quantitative tools to measure their environmental impact, they are more conscious of it and are more empowered to make a change.
How can logistics providers explore cleaner methods of transporting electric vehicles for their customers?
For many EV carmakers and distributors, even though they are aware of the effects of their shipments on the environment, it can be difficult for the retailer to reduce these emissions and impact them on their own, without affecting their productivity and shipment volumes. Thus, logistics providers need to provide the necessary resources to help their customers. Sustainability is no longer a luxury, but rather already a determinant of the way the supply chain should move.
Kuehne+Nagel’s myKN platform and app provide customers with information regarding multi-modal options for their shipments and allows them to select more sustainable transport routes and modes, effectively cutting the environmental impact of their logistics activities. Kuehne+Nagel was also the first air logistics provider to offer customers the option to purchase Sustainable Aviation Fuel (SAF) instead of fossil fuel for air transport and thus benefit from net-zero carbon emissions air freight services. The option to use Biofuel is also being offered for sea freight shipments, specifically the second generation of Biofuel, also known as “Used Cooking Oil Methyl Ester” (UCOME), which reduces CO2 emissions by 90-100 per cent. Such initiatives are all part of the company’s efforts to support customers in reducing their carbon footprint and address carbon emissions reduction in the transport and logistics sector.
Will companies adopt electric vehicles to transport electric vehicles?
Kuehne+Nagel has been exploring the use of EVs in our logistics solutions – in 2018 we rolled out a fleet of 100 per cent zero-emission electric vehicles in Singapore for island-wide deliveries, providing our customers with an environmentally responsible transportation option while reducing carbon footprint. Of course, the transport of EVs and other related parts and infrastructure will be a far larger undertaking, and we are continuing to explore how we might be able to achieve this.
What are some obstacles that the industry would need to overcome before taking full advantage of clean technologies?
Right now, there is still a trade-off between clean logistics and flexibility. While there is more demand than supply for more environmentally friendly transport solutions such as biodiesel, SAF or deploying hydrogen trucks for dealer deliveries with warranty parts, carmakers and tier-one suppliers must accept longer transit times or the increase of buffer stock.
Additionally, going green does not necessarily come cheap. Efforts to reduce waste, cut emissions, and change different parts of the supply chain will come with additional costs. With the competitive nature of the market today, even a small difference in price matters to customers. Companies are thus inclined to prioritise customer prices over the greater good of sustainability. The biggest challenge for logistics companies and their customers remains competitiveness while transforming production and supply chains into more eco-friendly solutions.
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