Australia’s transition over to emission-free vehicles offers many exciting opportunities for industry and the country. What does this transition look like, and which problems are we likely to come up against along the way? ATN magazine sat down with two industry representatives to talk about the road ahead.
The future of the world’s transport industries is in clean energy and technologies such as battery electric and green hydrogen. Australia has been slower to adopt these new technologies compared to other parts of the world such as Europe and the U.S. but time is not up yet and it is smaller owner-operator businesses that will play a key role in shaping this future.
Now that the pressure to reduce emissions is gearing up and the transport sector is preparing to fully adopt these technologies many issues and complexities have become to materialise.
So far, the government has focused its policy efforts on supporting larger corporations in the transport industry, providing subsidies for their fleets for example. This policy makes sense by Australia is still in the early stages of its transition, but in the longer-term the roles of smaller operators that make up the bulk of the sector and contribute to most of its emissions will need to be addressed.
Matthew Marshall is the managing director of the Australian freight and logistics broker Freight People. Marshall says leadership needs to come from government while the industry is still in these early stages of the transition.
“In order to see significant and meaningful change in the EV space in this country we need to see effective policy from government,” says Marshall.
Started in 1987 Freight People says it helps organisations to choose the best freight carrier for the right goods at the best price.
Freight People also says it works with its clients to optimise their entire end-to-end freight process, introducing better technology and streamlining processes across multiple departments to save time and money.
Marshall says while interstate transport with clean heavy vehicles might not yet be fully viable, last mile delivery presents a great opportunity to implement electric vehicles on a large scale.
“Electric vehicles are proven technologies for last mile deliveries. And we should be using electric vehicles in our capital cities right now”.
Marshall says the current policies have left smaller owner-operators in the dark regarding.
“There are no incentives for owner-drivers and smaller ‘mum and dad’ businesses to adopt electric vehicles.
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Matt Marshall is the Managing Director of freight and logistics broker Freight People.
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“There’s no advantage for having an electric vehicle at the moment besides the feel-good factor,” says Marshall.
Indeed, being one of the most urbanised countries in the world, Australia’s capital would be well-suited to last-mile electric vehicle delivery.
Marshall says being such a low margin, competitive industry transport operators do not want to take on extra risk or make larger investments on their own.
“These smaller businesses to not have the extra budget available to pay extra for these electric vehicles,” says Marshall.
In the long term, operators would of course benefit from the cheaper operating costs of electric vehicles over their lifetime. And the vehicles would eventually pay for themselves with these savings.
Marshall also points out the government’s need to take a leading role in an education and communication campaign for electric vehicles.
“These vehicles are black boxes to a lot of people.
“People need to understand the practicalities around owning an electric vehicle. Things like charging points and charging times.
“The appetite to learn more about electric vehicles is out there,” says Marshall.
Marshall says it’s critical that government take the leading role now and begin helping the industry to move in the right direction. The first step, he says, would be to begin thorough consultations with industry.
“Strategy should come first from the federal level as opposed to state level to send a clear message to industry.
“Ultimately properly incentivising electric vehicle uptake will be a great result for the transport industry and for Australia,” says Marshall.
Marshall says consumers and businesses are increasingly taking carbon into account when making decisions to do with freight, which is why Freight people offers a carbon calculator as part of their transport management system to help their clints estimate the amount of carbon they are emitting as part of their freight activities.
“If businesses are able to measure their emissions, then they can better manage them,” says Marshall.
Operators themselves are also trying to take a leading role in the national conversation around electric vehicles.
Hi-Trans Express is a national provider of dynamic freight and logistics management services in Australia. It is also calling for more policy and leadership from government around electric vehicles.
Hi-Trans Express says it is absolutely committed to the Prevention of Pollution, and management of the Environment. The company is currently on a sustainability journey towards a net zero vision and is replenishing their fleet with low or zero emissions vehicles where feasible.
The company recently partnered with local electric vehicle manufacturer SEA electric to order several electric trucks.
CEO Tony Mellick says governments and industry so far have been heavily focused on the vehicles themselves when there are many more important aspects to the clean energy transition that need to be addressed.
“Buying the truck is the easy part now. When you work backwards from there, however, things become very complicated,” says Mellick.
Mellick also stresses that the real issue in the transition to clean energy is the situation with smaller operators.
“The current Government incentive programs for electric trucks are geared towards larger corporations.
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Hi-Trans Express’s “Green Trailers” only travel with Euro VI or better vehicles.
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“Small independent operators are the backbone of this industry,” says Mellick.
From a policy point of view, providing support and subsidies to these larger companies can be considered to provide the government with more bang for its buck as they will likely make large purchases and bring many EVs onto the roads.
As far as Mellick and Hi-Trans Express are concerned there are three main issues that will need to be addressed to allow owner-drivers to uptake EVS.
The first is helping them to make the upfront financial investment which is significantly larger than the investment required for the equivalent diesel truck.
“A new electric truck can cost an owner-driver up to $400,000 in capital. That’s versus $100,000 for a second-hand, older diesel truck.
“That’s a big ask for someone to invest in, especially when they do not know if they will be able to resell the truck after a few years if they need to,” says Mellick.
The second issue is building up a network of heavy vehicle charging infrastructure. Even if all truck drivers were able to switch over today, there would not be enough charging stations available for the trucks to work.
Finally, the third issue concerns negotiating with unions to understand what the legal landscape will look like for contractors that use EVs.
“The traditional transport contractor models have no concept of things such as reduced running costs and higher upfront investments.
“What is an appropriate renumeration model for the EV market? That conversation has not even begun yet,” says Mellick.
Because these policies have been neglected for so long in Australia and the industry has not gotten time to understand and become accustomed to electric vehicles there are many unknowns about them.
A key issue the industry is anxious about is resell value and the general lifespan of an electric truck.
“Owner-drivers are confident that if they buy a diesel truck today, they will be able to sell if for about fifty per cent of its value after five years. That same level of certainty does not exist with an electric truck,” says Mellick.
Overall, Mellick emphasises the need for a clear and balanced policy strategy from the government.
“We need a carrot and stick approach. Simply saying diesel trucks will not be able to drive on the roads in five years for example will not fix the issue”
“The consumer is demanding sustainability, but what they need to understand is they need to pay for it.
“Owner-drivers cannot afford to double their asset commitment. We need subsidies at purchase and financing options.
Whilst there are challenges to work around, electric trucks are available today and are well suited to metro pickup and deliveries. We are in the process of designing sustainable pathways for our contractors to join us on the decarbonisation journey.
“The stakes are very high if we get this wrong,” says Mellick.
The transport industry has been having something of a crisis for a long time, how to transition to electric vehicles is part of this crisis but it may also provide some solutions too.
Electric truck that are easier to drive, quieter and less taxing on the body could go a long way in attracting new drivers to the industry.
Moreover, quiet trucks may be able to circumvent noise curfews in residential areas, thus opening new economic opportunities for night-time delivers.
The transport industry wants and needs these changes it is up to government now to provide the guidance and incentives to allow smaller operatives to take that leap with confidence.