Kuehne+Nagel’s electrification journey to decarbonise its fleet

In urban areas, electric vans have become ubiquitous for last-mile, short-distance deliveries. Heavy-duty trucks, on the contrary, still have a longer electrification road ahead of them. However, truck manufacturers, logistics companies and policy makers are shifting quickly to accelerate the move to zero-emission transport. At Kuehne+Nagel, we believe that the time is now to start phasing out combustion engines. Read on to learn more about Kuehne+Nagel’s electrification journey to decarbonise its fleet.

60% zero-emission vehicles (ZEVs) by 2030

More and more companies are tackling their emissions, and come to our road logistics team with the same question: can I soon rely on electric vehicles (EVs) for my road freight transport? Hansjörg Rodi, member of the Management Board at Kuehne+Nagel International AG, responsible for Road Logistics, answers that query with affirmative optimism, along with a few side notes to manage expectations.

The explanation for that nuanced answer is that, on the one hand, Kuehne+Nagel already operates several heavy-duty EVs in its fleet and intends to expand fast as of 2023. On the other hand, there will be a few steps in between today’s status quo in the global road freight scene which also reflects Kuehne+Nagel’s reality and the best possible scenario for the planet (i.e. a zero emission fleet).

For Kuehne+Nagel, one intermediate milestone is a 60% representation of ZEVs in their own fleet by 2030. To reach that goal, the availability of EVs for purchase no longer pose a hurdle. After all, with the arrival of major technology advancements and government policy pushing for better air quality and carbon reductions, OEMs (the producers of trucks) now have the readiness and willingness to produce more electric trucks.

This will trigger swift change in the next few years. In 2021, the global electric heavy-duty truck stock was 66 000, which represents about 0.1%. However, beyond 2025, the forecasted market penetration for heavy-duty electric vehicles in Germany is 43%. Clearly, we find ourselves at a tipping point. The time is now. 

But what are the side notes, then?

Short-haul solutions powered by EVs

For the past two and a half years, Kuehne+Nagel has already been piloting the use of electric trucks. Over this time, the team has gained insights on how to best optimise their usage. They concluded that short-haul journeys (up to 250km) can easily be done by a medium-sized battery electric vehicle (BEV) of up to 18 tons. Longer charging times, a shorter distance range and a lower payload (more on that later) are parameters that put a limit on the deployability of heavy duty battery electric vehicles.

“These are the side notes we need to make now when customers ask us about EVs,” Hansjörg comments. “In the years to come, we cannot yet service them with heavy-duty electric vehicles for long distances. On the bright side, short-haul transports constitute a large part of road freight journeys. The key take-away is that the transition to a zero-emission fleet will be a journey with several intermediate steps, that also include bridging technologies such as HVO fuel which we have introduced for several customers in Europe already. But as we are transitioning, we plan to shift quickly when the promising technologies of the future, such as fuel cell electric vehicles, become available on the market.”

Solution for long-haul trucking

For long-haul trucking (>250km), we see fuel cell electric vehicles (FCEVs) that are powered by hydrogen,  to be the dominant solution. This advanced technology is still under development with many OEMs not having trucks available thus far. The expectation is that they will become more widely available by 2027-2028, while the earliest FCEVs are expected to be on the road by 2025. What is exciting about this technology, is that in the future hydrogen will be as readily available as diesel is today. This will allow drivers to fuel up at a station just as they do today for diesel. Once the technology has been developed, the mass uptake will be easier. 

Hansjörg comments: “That is not so say that battery electric vehicles won’t be used for long-haul journeys. We see the future as a combination of BEVs and FCEVs, where the advantages of both technologies will be leveraged and planned to achieve the most cost-effective and energy efficient zero-emission road transport. The advantage of BEVs remains its relatively low cost compared to hydrogen, while the range and payload advantages for FCEVs provide more flexibility.”

Cooperation with the World Economic Forum

Some changes that need to happen for faster electrification, are a matter of policy. They are related to first and foremost the charging infrastructure, and secondly, payload allowance.  Kuehne+Nagel engages actively with the World Economic Forum’s Road Freight Zero project, a coalition of stakeholders (logistics and automotive companies, policymakers) that come together to fast-track zero emission fleets and infrastructure. “Developments in charging infrastructure are crucial to pave the way for more heavy-duty EVs on our roads,” says Hansjörg. “And at Kuehne+Nagel we raise our voice to accelerate the required change – not only for our customers but also for the carriers that we partner with to enable a fair and sound transition.”

In addition, payload (or maximum permissible weight allowance) is another topic to consider by policymakers. In Europe, zero emission trucks can carry an additional two tons to compensate for the heavier battery that powers it. Other countries and regions should follow suit to make sure that the transportation cost using EVs remains economically interesting.

The road ahead

As mentioned at the onset, there will be a few steps in between today’s status quo and a zero-emission fleet. At Kuehne+Nagel, we see a combination of electric (short-term) and FCEV trucks (medium-turn) in our own fleet. We also engage with our carriers to see where we can support and incentivise them to adopt and to jointly decarbonise road freight.

Our teams welcome the high interest among customers for ZEVs, while pointing out the importance of educating them on realistic decarbonisation solutions in the short, medium and long term.