Not too long ago, we talked about electric vehicles and the “last mile” part of delivery services and logistics. FedEx Ground adoption of electric vehicles seems well underway.
What’s happened so far? Well, Initially, the company received five vans from GM subsidiary BrightDrop for testing purposes. But now, they’ve moved beyond testing and taken delivery of the first 150 of many shipments of electric vans with the aim of reducing the carbon footprint overall and reaching NetZero emissions as soon as possible.
It’s a giant step forward and an encouraging sign for FedEx Ground drivers and route owners.
From Testing to Adoption
GM and FedEx announced their collaboration with an initial plan of the company purchasing 2500 electric vans with the intent of purchasing 20,000 in a deal that is still being negotiated. While Tesla is sitting this one out, for now, many automakers have entered the competition for creating the best electric delivery van.
Such companies include Ford, GM, Stellantis (maker of Ram vans), and Rivian. For delivery companies like FedEx, UPS, Amazon, and even Walmart, these vans make more sense than ever. While fuel costs rise and the climate changes, the demand for delivery continues to increase.
There are a lot of factors that make now the time for adoption and increase the push to make changes sooner rather than later.
The Push for Renewable Energy
First, there is a huge push for renewable energy in a number of spaces. Data centers are building solar and wind farms to power the servers that house and enable the internet. Warehouse roofs are dotted with solar panels to offset energy demands. And at the same time, transportation is going green.
“What better way to make meaningful change than to charge your electric vans with solar?” one delivery route owner told us. “I’m ready for the electric revolution to take delivery by storm.”
And it’s happening. More delivery companies are adopting electric vehicles, especially in places where vans run short routes and can return to a facility every night to be recharged. It’s an ideal situation and real-world application.
The Price of Fuel
The FedEx Ground adoption of electric vehicles started before the recent spike in fuel prices, but that spike is also fueling change (no pun intended). The cost of oil and the cost of diesel has risen to prohibitive levels for many delivery services, and while FedEx offers some help, prices for delivery will have to rise to make up for this cost.
And the crisis has no end in sight. With the war in Ukraine and unrest elsewhere, fuel prices continue to rise. Even in areas where tax relief and fuel credits are being implemented filling a tank now costs more than it ever has.
For route owners, this can be especially challenging. When a large part of your costs goes up 20-30%, profit margins fall, and relief can’t come soon enough. For some, they are finding that relief in electric vehicles.
Innovation and the Future of FedEx Ground
The truth is, routes are more efficient than they ever have been, and there are fuel-efficient vans out there. But FedEx Ground has never been a place to rest on doing things exactly like we have done them before. To be profitable means embracing innovation and new technology.
Just one of these areas is where electric vehicles become a part of everyday operations. For delivery drivers and route owners, there’s likely no technology that holds more promise or will impact their business more over the next five to ten years.
The future of FedEx ground, and all “last mile” delivery depends largely on electric vehicles and what comes next with them. So what does this mean if you are looking to buy a FedEx Ground route?
Buying a FedEx Ground Route Now
The FedEx Ground adoption of electric vehicles will come quickly on the heels of corporate adoption, and what that means for FedEx Ground route owners is greater profits.
Think of it this way. If you have to get a new truck, you are spending money anyway. For the same or nearly the same amount of money, you can get an electric van instead of an internal combustion-powered vehicle. Even if it costs more, the fuel and maintenance savings alone will be huge.
If you are thinking of buying a FedEx Ground route now, there is no better time to join the electric revolution. Your customers will take notice, and your bottom line will thank you. It’s a good way to start your business off on the right foot.
The next thing you know, your route and your business can be a part of achieving NetZero emissions goals.
Ready to take the plunge and buy a route of your own? Contact us at Route Advisors today. We’re with you every step of the way.