Logistics Matters with DC VELOCITY

Guest: Darren Epps of Ryder on electrifying fleets; Returning office workers want parcel lockers for e-com deliveries; The main priorities of chief supply chain officers

July 30, 2021 AGiLE Business Media Season 2 Episode 29
Logistics Matters with DC VELOCITY
Guest: Darren Epps of Ryder on electrifying fleets; Returning office workers want parcel lockers for e-com deliveries; The main priorities of chief supply chain officers
Show Notes Transcript

In this episode, Darren Epps, senior director of advanced vehicle technology at Ryder, shares what it will take for freight companies to transition to electric fleets. It is more than just buying electric trucks. It involves decisions on infrastructure for charging them and determining which loads are best suited for currently available technologies.

Many workers spent the last year working remotely and ordering many, many things online. Now they are returning to offices. But what will they do about their e-com orders if they are not home to receive them? That's why some office complexes are considering installing electronic  parcel delivery lockers so that these workers can receive their e-commerce deliveries at work.

What keeps chief supply chain officers up at night? A new study reveals the priorities that will set their agendas moving forward.

Articles and resources mentioned in this episode:

Podcast sponsored by: Aptean

Other links

David Maloney, Editorial Director, DC Velocity  00:01

How do trucking companies transition to electric fleets? What's keeping chief supply chain officers up at night? And how will smart lockers be part of workers returning to the office? Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast.

Hi, I'm Dave Maloney. I'm the group editorial director at DC Velocity. Welcome.

Logistics Matters is sponsored by Aptean. Aptean is a global provider of mission-critical, industry-specific logistics and transportation management solutions. Aptean routing and scheduling delivers the most advanced transportation management systems to world-leading brands, helping to maximize operational fleet efficiencies, improve driver retention, optimize resources, and turn private fleets into profit engines. If you're ready to make savings of up to 30% and see ROI within 12 months, Aptean can help. For more information, visit Aptean.com and discover what's next now.

As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insight into the top stories of this week. But to begin today: We've all heard that electric vehicles are coming, both for commercial fleets and the cars that we drive, and that will all take place sometime in the future. For trucking companies converting to electric vehicles will be somewhat of a challenge. To find out what is going to take, here's Victoria with today's guest.

Victoria.

Victoria Kickham, Senior Editor, DC Velocity  01:37

Thank you, Dave. Yes, our guest today is Darren Epps. He's senior director of advanced vehicle technology for Ryder. Darren's here to talk to us about electric vehicle technology, and really the steps companies should consider when thinking about transitioning to an electric fleet. Welcome, Darren. 

Darren Epps, Senior Director of Advanced Vehicle Technology, Ryder System Inc.  01:55

Thanks for having me, Victoria. 

Victoria Kickham, Senior Editor, DC Velocity  01:57

There's a lot of talk, interest, and sort of R&D when it comes to electric vehicles for logistics fleets, but I wanted to ask, are companies making the switch? You know, can you share with us a little bit about what the market is like for this technology?

Darren Epps, Senior Director of Advanced Vehicle Technology, Ryder System Inc.  02:10

Yeah, certainly we have customers that are looking to make the switch. We are in the early days of this technology. I'd say right now almost all of the OEMs have an EV offering that they plan to deliver in the next, you know, one to three years. Minimal amounts on the roads right now, not really meaningful quantities at this time. I can say Ryder is testing all-electric yard tractors made by Orange EV and Lonestar at one of our SCS customer operations. We've also done demos on some all-electric Class 6 and Class 8 trucks, so we're getting our feet wet and building that muscle for when the trucks arrive. We also have two Workhorse electric vehicles available for short-term rentals through our mobile asset-sharing application, which is called COOP, and so those are little smaller, Class 3 vehicles. So, we're learning a lot in this space, which I think we're all trying to do. The really exciting part for me is to see the progression of the technology. So, it wasn't that long ago an EV battery was $1,000 per kilowatt hour, you know, an EV got 83 miles of range on a passenger car, and it took a long time to charge it. So, we can continue to see the evolution in batteries, the drive train, charging speeds, and that will support a more reliable experience going forward. So, the advancement in the technology is still there. I mean, think about how fast—relatively fast—we've moved from all horse-and-buggy to cars, or from home phones to cell phones. It's not an overnight sensation, but when you reflect back, it was a pretty quick advancement, relative to other big advancements. So I think you'll see the same thing with this technology.

Victoria Kickham, Senior Editor, DC Velocity  04:05

Yeah, it certainly seems to be coming along here. What are some first steps companies should take when transitioning or sort of considering transitioning to electric vehicle technology? It's not just flicking a switch, I imagine. There's a lot you need to plan for. Can you talk about that a bit? 

Darren Epps, Senior Director of Advanced Vehicle Technology, Ryder System Inc.  04:24

Yeah, of course. There's really two main tenets that you really need to look at when transitioning to EVs. One is really the route. If you're interested in early adoption, that's where I would start. If you have a route with the appropriate amount of range, the payload. You know, the climate has an impact. A very cold day, when you're running the heater, can have a big impact on the range. And then city versus highway driving. Faster speeds tend to drain the battery faster. So, it's really taking a look at all your routes and seeing which one makes sense compared to the truck you're looking to purchase. Then I would start with charging. So everyone gets very, very excited about the trucks. The trucks are the focus. But the charging consideration, the fact that you charge at your facility, is often overlooked. So, I really can't stress the importance of evaluating the charging capacity at your site and understanding the cost, the timing and the charging needs, because it can be a lengthy process, and it's, of course, not something many people have ever done before.

Victoria Kickham, Senior Editor, DC Velocity  05:36

Right, of course. What about cost considerations? You know, what kind of investment should firms be prepared to make, really from a general perspective, if you can talk about that a bit?

Darren Epps, Senior Director of Advanced Vehicle Technology, Ryder System Inc.  05:49

Yeah, so there is a premium for new technology, no question. That's true for this technology. We are starting to see, though, a lot more incentives and grant opportunities for both the vehicle and the infrastructure. We're seeing, of course, there's a lot of infrastructure discussion happening at the federal level, but there's also dollars of state and local levels, and then electric utilities have really gotten into the game with offering EV charging rebates or, you know, build out the infrastructure for you, so they're coming out with programs as well. So, yeah. That's one of the main things we do here is we monitor grants for all of our customers who are interested in this space as part of the turnkey solution.

Victoria Kickham, Senior Editor, DC Velocity  06:38

So when, you know, transitioning to this technology, how do you—how do companies know if it's the right decision for them? We've talked about a few different things here. But are there any kind of best practices or advice that you give to sort of help them figure that out?

Darren Epps, Senior Director of Advanced Vehicle Technology, Ryder System Inc.  06:51

Yeah, I would factor in, sort of encapsulate what I've mentioned, the last couple of questions: Look at your routes, look at the timing of when you want to implement this technology, understand the the premium that's going to be out there, the grants and incentives landscape. And, you know, if you want to be on the front end of a potential transformation in transportation, you know, there's there's a risk involved with that, but we still have a lot of interest from our large shippers. They have sustainability goals they're trying to achieve. I don't think the supply has caught up to the demand yet. So, going back to the charging piece, that's where we're starting: Okay, what's going to be required on the infrastructure space? What grants do you qualify for? Can you work with your local utility? So, really, we work out, with our customers, sort of a mapping-out of how they can reach their sustainability goals, and, you know, not lose sleep at night wondering if different routes are going to work.

Victoria Kickham, Senior Editor, DC Velocity  07:54

Does that include kind of taking a look at the timeframe for making the switch, you know, what they should realistically plan for in terms of, you know, making a full transition if that's what their goal is?

Darren Epps, Senior Director of Advanced Vehicle Technology, Ryder System Inc.  08:07

Absolutely. And that's a great question on the time. I think it's a lot longer of a process than maybe most customers realize. I mean, depending on the charging you need and the availability of the truck, I mean, we're talking year, year and a half, two years. That's why we like to have the infrastructure conversations as early as possible. Utility upgrades at a facility can take time. Charger procurement can take time. Then there's driver training. If there's a grant or incentive involved, that takes time to award the winners and work through contracting. So, that's why we, we're just constantly monitoring this space and working with the different technology providers—the OEMs, as I mentioned, the charging companies—to really map out a plan for a customer. But you know, the advice for customers is, you know, patience is good in this field.

Victoria Kickham, Senior Editor, DC Velocity  09:04

Absolutely. What about success metrics—and I know, it's really new, you're still working through all this—but have you, you know, sort of thought that far out, like how you'll kind of help customers realize that they're, you know, they've made the right decision, and they're making progress toward their sustainability goals?

Darren Epps, Senior Director of Advanced Vehicle Technology, Ryder System Inc.  09:19

Yeah, so I think success is sort of, when you find that sweet spot of the right route, the right payload, the appropriate amount of charging where, again, you're not up at night wondering if it's gonna charge in time. I think once you figure out that sweet spot, that's success, and that's really what we're able to do, is sort of develop these strategies to deploy electric vehicles to improve the environment, but also drive value for our customers. So, success is making this work, and there's a lot of factors that go into that, but talking to the early, early, early adopters, it's a good feeling when we're able to get it right.

Victoria Kickham, Senior Editor, DC Velocity  10:02

Anything else about this topic you'd like to mention? You know, we've talked about a lot here, but any any other, any things, thoughts you'd like to leave our audience with?

Darren Epps, Senior Director of Advanced Vehicle Technology, Ryder System Inc.  10:11

Yeah, sure. I think, right now, I think in the next, probably, one to two years, you're gonna see a lot of movement in this space. I think the technology is constantly going to evolve. I think there's going to be some really interesting charging solutions that come along. There's a standard being worked on now that we're involved with looking at higher-power charging. I mean we're talking about a megawatt and beyond. So, that's really exciting for the space, because that's really one of the holdups as far as charging en route is, you know, the charging takes a little bit too long now, and so it really behooves you to do it at the facility. But there's some really cool technologies that are going to be able to charge vehicles really fast here in the next four or five years. Really excited to watch that progress.

Victoria Kickham, Senior Editor, DC Velocity  11:04

Yeah, it certainly is an interesting thing to be watching, for sure. Darren, thanks so much for being with us today. We appreciate it. 

Darren Epps, Senior Director of Advanced Vehicle Technology, Ryder System Inc.  11:11

Yeah. Thanks for having me, Victoria. 

Victoria Kickham, Senior Editor, DC Velocity  11:13

We've been talking with Darren Epps, senior director of advanced vehicle technology for Ryder. And back to you, Dave.

David Maloney, Editorial Director, DC Velocity  11:21

Thank you, Darren and Victoria. Now let's take a look at some of the other supply chain news from the week. Ben, you reported this week about what the post-pandemic office might look like, and how it might be very different. Can you tell us more?

Ben Ames, Senior News Editor, DC Velocity  11:35

Absolutely, Dave. We've been covering some of the trends that have become very clear through the pandemic and, you know, a lot of those things, especially the enormous jump in e-commerce volumes and ordering, is not going to turn on a dime, and it's not going to come to a screeching halt, most experts in the field say. So, looking at that as context, you know, we're in a time when some companies are inviting workers back to their offices now, under slowly easing pandemic conditions and rising vaccination rates so they can all do it safely. No one knows exactly what it'll look like, because many people got used to working from home during Covid lockdowns, and in many cases that worked well, for businesses, too. Some of them didn't have to rent as much space, for example, with fewer workers present at their desks. So it's unclear whether the American workplace will just snap back to the old normal, or whether we'll have some kind of a hybrid version. But we did learn some details about a possible scenario this week, and that was to a survey that was done by Pitney Bowes, the shipping technology firm. It was a survey of 2,200 U.S. workers, and a lot of them, it turns out, plan, in the future, to sort of blend their work and home lives. So, specifically, the survey was looking at a growing demand and popularity for what they call smart lockers. And those, our listeners may have seen those, for example, in Whole Foods Markets. Amazon was delivering some parcels so when people could, you know, pick up their groceries, they could also scan their smartphone with a QR code, and it would automatically unlock a little metal box where their package was. So, the survey indicated that those might start popping up in a lot more places, both in neighborhoods or buildings and also at office spaces. And again, that would be significant, because there's just so much more volume now with those parcels, that it could make a big impact on the patterns that people follow when they pick up those deliveries. 

David Maloney, Editorial Director, DC Velocity  13:40

Yeah, it certainly could. Did the survey have any details about exactly which consumers are asking for this service?

Ben Ames, Senior News Editor, DC Velocity  13:48

Good question. It did. It found that the greatest support for this concept came from three particular demographics, and that's millennials, urban dwellers, and office workers. So, those groups had various reasons for this new preference, but some general themes stood out. One is familiarity. As we mentioned, a growing number of people have seen these lockers around, and among millennials, one in three said that they either currently use or have used one before. Another one is environmental impact, because about three quarters of people said that they felt good about using smart lockers because it cuts down the carbon footprint. That's by reducing the emissions of multiple carrier journeys to a whole lot of different homes, if they can just drop all those packages in one place. A third reason is security. More than half of the respondents said they were nervous their packages might get stolen from their doorstep, for instance, if they were off at the office for the day. And the fourth reason was privacy, actually. Just about half said they really wouldn't like other people to see which packages they order. So, kind of an interesting approach. But Pitney Bowes said that the lockers could see growing use for more day-to-day applications also, for instance, the exchange of business items and equipment, and that would really be relevant, again, in the scenario where people were sort of merging the home and office space, so if they had to move some of those business equipment items back and forth between two different places.

David Maloney, Editorial Director, DC Velocity  15:20

Yeah, very interesting. It definitely will be more convenient for a lot of people and another change from what we had before the pandemic. Thanks, Ben. 

Ben Ames, Senior News Editor, DC Velocity  15:28

You got it. 

David Maloney, Editorial Director, DC Velocity  15:29

And Victoria, you reported on the major concerns that chief supply chain officers are focusing on in the near term. What did you find out?

Victoria Kickham, Senior Editor, DC Velocity  15:37

That's right, Dave, yeah, and this is continuing on the theme that Ben was just talking about. So, the focus on managing disruption and creating more resilient supply chains that we've seen over the past year is really continuing as the second half of 2021 gets underway. A Gartner report released this week showed that supply chain leaders—specifically chief supply chain officers, or CSCOs, should really be prepared to stay the course and navigate ongoing disruptions to ensure business continuity as the economic recovery from the pandemic continues. Gartner surveyed close to 200 CEOs and senior business executives about what they're asking of their CSCOs in the wake of the pandemic, and the top two concerns revolve around cost and resilience. Seventeen percent of the business leaders ranked cost optimization as the number-one issue that their CSCO should focus on in the near term, and it was followed by supply chain resilience.

David Maloney, Editorial Director, DC Velocity  16:34

Victoria, did the research gauge optimism among CEOs? What's the business outlook look like?

Victoria Kickham, Senior Editor, DC Velocity  16:40

Yeah, well, 60% of them, of those surveyed, said that they expect an economic boom by the end of 2022, so that's certainly optimistic. and they also pointed to digital transformation and business restructuring as important issues to focus on as companies prepare for that expansion. And just to give you a couple of examples, according to the survey, most of the respondents say they want to focus on technology—another thing we've heard a lot about in the last year or so—and they plan to increase their year-on-year investments in digital capabilities—that was 80% said they plan to do that. And the trend appears to be shifting from a general undefined ambition for you know, this digital business transformation we keep hearing about to more targeted initiatives. And popular areas for that include e-commerce or e-business, customer interactions, data analytics, and the customer experience. So those are the things companies are really going to focus their technology on. Another example: more than two-thirds of the survey respondents said they plan to use the pandemic as an opportunity to—or pandemic recovery—as an opportunity to focus on redesigning their businesses. It was close to 80% of the CEOs said they expect to see really significant and enduring behavioral changes in society, in their organization, and in individuals that are a direct result of what we've all experienced over the last year or so. And this means that supply chain leaders should prepare for their, not only their business, but all the business partners they work with, their competitors, to undergo sort of organizational, sort of behavioral shifts. Much of this will revolve around social responsibility and sustainability. These are issues we've discussed here on the podcast in the past. So, it was interesting and just provides more evidence that, you know, the trends we've seen over this past year really look like they'll be here with us for quite a while.

David Maloney, Editorial Director, DC Velocity  18:31

Yeah. It certainly seems that way. Thanks, Victoria. 

Victoria Kickham, Senior Editor, DC Velocity  18:34

You're welcome. 

David Maloney, Editorial Director, DC Velocity  18:35

And we encourage our listeners to go to DCVelocity.com for more on these and other supply chain stories. And check out the podcast Notes section for some direct links on the topics that we discussed today. Thanks, Ben and Victoria, for sharing highlights from the news this week. 

Ben Ames, Senior News Editor, DC Velocity  18:51

Glad to do it. 

Victoria Kickham, Senior Editor, DC Velocity  18:52

You're welcome. 

David Maloney, Editorial Director, DC Velocity  18:54

And again, our thanks to Darren Epps of Ryder for being our guest today. We encourage your comments on this topic and our other stories. You can email us at [email protected].

We also encourage you to subscribe to Logistics Matters at your favorite podcast platform. The new episodes of Logistics Matters are uploaded each Friday.

And a reminder: Logistics Matters is sponsored by Aptean. Forged from decades of industry experience, Aptean routing and scheduling supports logistics and delivery fulfillment operations with the tools needed to optimize resources, automate route planning, and drive savings of up to 30%. Your fleet operation holds the key to enhanced profit. Aptean routing and scheduling can help you find it. Visit Aptean.com and discover how, now.

We'll be back again next week with another edition of Logistics Matters, when we will talk about reshoring. It may not happen as soon as you think. So be sure to join us. Until then, please stay safe and have a great week.