DHL has set itself some ambitious sustainability targets, which could have a positive impact on reducing CO2 emissions in the transport sector, if achieved.
The logistics company employs about 600,000 people across more than 220 countries and territories. It offers a whole range of logistics services, including international express services, air, ocean and road freight, and warehouse logistics services. To provide all these services, DHL operates over 300 aircraft, 119,000 road vehicles, and 160 million square feet of warehouse space worldwide.
DHL began its decarbonization journey back in 2015 with a shift to electric vehicles. Of the 119,000 road vehicles it currently operates, 29,000 are now electric. So far, the company has invested €179 million into electrification, and it ensures that the electricity used to charge the vehicles batteries comes from renewable sources.
The firm is also investing in sustainable fuels like renewable diesel and renewable natural gas, spending €66 million so far.
However, DHL operates in a sector that doesn’t have a great record for sustainability. The transport sector is responsible for 34% of CO2 emissions in the UK, making it the largest emitting sector – and it’s been increasing year on year. Transport sector emissions rose by an estimated 4% (4.2 Mt) in 2022 compared to 2021.
There is some positive news when it comes to fleet vehicles, which could help halt emissions growth in the transport sector at the very least. Half of organizations plan to purchase or lease EVs in 2023 to reduce emissions, while 58% predict their fleet will be at least 50% electric or hybrid by 2025.
Operating such a large fleet of its own vehicles and aircraft, DHL has the potential to make a real difference to overall emissions, and this is something the firm is keen to achieve. By 2030, it’s aiming to reduce its Scope 1 & 2 emissions by 42%, and Scope 3 by 25%. This would bring its total to below 29 million tons of CO2e in 2030, in line with the Science Based Targets Initiative; the long-term target is to reach zero emissions by 2050.
In order to achieve these targets, electrification plays a very important role for DHL, especially around road transport. The firm has set itself two distinct targets in this area: one relates to last mile deliveries, aiming for 60% of its vehicles to be electric by 2030; the second is 60% of heavy goods vehicles to run on sustainable fuels in the same timeframe, either renewable natural gas, renewable diesel or electric.
But these targets are not as straightforward to achieve compared to the age of the diesel-based fleet, according to Stephan Schablinski, VP of Operations Excellence - Go Green at DHL Supply Chain. Speaking at a recent roundtable event, hosted by Samsara, he explained:
Back then, we used data to optimize our fleet to make sure that we avoid unnecessary trips, increase the payload, and essentially optimize the use of the vehicles to the point where we reduce fuel consumption and reduce CO2 emissions. Now, we are in an era where we realize this is not enough to reach our sustainability goals. We need to do more than this.
We still continue to optimize, but we need to make a step change from diesel to another technology that will help us reduce the carbon to where it needs to be and to meet our commitment.
In the meantime, most of the fleets companies are trying to decarbonize are using multiple fuels, a mix of diesel, electric and any other technology available that fits the purpose of the transport operations. Schablinski says:
That adds a lot of complexity to the transport managers, to the asset managers. We need to be able to manage a very diverse fleet, as each of these assets has a very distinct operational profile and capabilities. Not all the vehicles operate like a diesel vehicle. There is a constraint to range or fueling capabilities or fueling capacity.
To manage such a diverse fleet requires data and intelligence to help understand which vehicle is best to deploy for a given operation, so that it does the necessary job.
Data is also crucial to understand some of the constraints of an electric vehicle over range, recharge times, specific training requirements and the lack of available infrastructure compared to refueling a diesel vehicle. Schablinski says:
That means the electric vehicle reacts very differently to operational changes. If you change the route, a diesel vehicle would do the same job on a different route, on a different day and a different climate with a different driver with a different payload.
All of this is very easy for a diesel vehicle to work with. But for an electric vehicle, all these changes may mean that the electric vehicle cannot do the job the next day or with a different driver because even the driver has a big impact on whether or not the electric vehicle can make the route, and that's different to a diesel vehicle.
Too much for a human
Another key difference is that while you try to reduce the fuel consumption of a diesel vehicle, with an electric vehicle, you try to squeeze as much range out of the vehicle as possible, meaning drivers need to be trained in these different parameters.
To understand where it can replace a diesel vehicle with an electric model, DHL needs a broad range of data, assessing not only a specific day with specific weather, the perfect driver and a lightweight load on the truck. Instead, it needs to analyze the history of 365 days over 24 hours to understand how a diesel vehicle works under different climatic conditions, driver changes, different routes and payloads; and then take these hundreds of thousands of data records and find whether the pattern meets the current capabilities of an electric vehicle. Schablinski adds:
That's almost too much for a human to do this equation on a piece of paper. But this is where we need first of all the data, that Samsara helps us collect, and then use a logic and an algorithm to understand whether or not for a given route for a given vehicle for the given operation, there's a good chance to deploy a non-diesel vehicle, which in our case is primarily an electric vehicle.
This is the current situation at DHL, and while the firm’s long-term objective is running all vehicles off a single fuel technology, and that eventually there’s a technology that behaves just like diesel but with zero emissions, the world isn’t there yet. Schablinski says:
The question is, how many decades does it take between now and then? Is it just one decade, two or three decades? We need this data to not only optimize, but also find the sweet spots in each of the operations for the equipment that helps us eventually reduce emissions.
This is an area where AI tools prove invaluable, according to Samsara CEO Sanjit Biswas. For companies operating large fleets with thousands of vehicles, the amount of data would be too much for any person to make sense of. With a wealth of route data on file, and suitability tools to help with the transition to EVs, Samsara technology helps identify which vehicles to switch first. Biswas adds:
It takes into account what technology you're currently using; if it's a diesel truck how many miles per gallon is it getting; how many miles has it been run because that may relate to asset age and whether it makes sense to remarket or buy a new one; the average and max range; and then how much dwell time does it have for rechargeability.
These are all the practical factors that once you put them into an algorithm, you can get a list of let's go after these.
Getting more intelligence from its data will be vital as DHL moves to the next stage of its decarbonization strategy: on-road heavy-duty vehicles.
When DHL started its transition away from diesel back in 2015, it began with the light-duty (as in lower weight capacity) segment. At that time, most of the OEMs weren’t able to provide electric vans, so DHL started its own company, producing around 20,000 of its own EVs.
These light-duty electric vans are still in operation, and DHL used the learnings to figure out how to design its facilities to make them ready for EVs, how to provide sufficient power to those facilities to charge the vehicles, and how to train drivers, facility managers and asset managers.
But light-duty and heavy-duty are two very different markets when it comes to electric vehicles, Schablinski notes, especially as most of the ecosystem to support the transition from gas or diesel to electric has been developed for light-duty models. So while DHL’s previous sustainability efforts have required some major investments and operational changes, the next challenge of tackling the heavy-duty segment is going to prove even more complex. We’ll be delving into DHL’s shift to heavy-duty EVs in a follow-up article later this week, along with what measures are needed to decarbonize the transport sector as a whole.