Accelerating clean deliveriesEthical Transport News & Features
This article first appeared in our Health Revolution issue of My Green Pod Magazine, distributed with The Guardian on 24 July 2020. Click here to subscribe to our digital edition and get each issue delivered straight to your inbox
DPD is a company in a hurry. In 2008, when Dwain McDonald became UK CEO, DPD was a middle-of-the-pack, B2B parcel delivery company. It handled 54 million packages a year, with annual sales of £393m.
Today it’s a £1.4bn company with 15,000 people, delivering over 250 million parcels a year for the likes of ASOS, John Lewis and Nike.
Transforming an industry
DPD has also been vocal about the need to transform the parcel delivery industry by reducing emissions and becoming more sustainable. It is currently building the UK’s largest all-electric delivery fleet – in double-quick time.
By the end of the year DPD will have over 700 electric vehicles (EVs) on the road, which will equate to 10% of its total van fleet.
In January, DPD signed off on what was at the time the UK’s largest single commercial electric van order, taking possession of 300 new Nissan e-NV200 vans.
‘The greenest delivery company’
While it’s no surprise that a delivery company would need a lot of vans, DPD is also using a range of very different electric vehicles – including a micro-EV, an e-cargo bike and an electric 7.5 tonne truck. It all suggests a much broader strategic shift.
Dwain McDonald’s aim isn’t simply to take a diesel van off the road and replace it with an electric one; ‘We want to be the greenest delivery company on the planet by transforming every aspect of our operation’, he tells us.
The key challenge for delivery companies is to try to reduce emissions and congestion in our towns and cities while still meeting the growing demand from online delivery customers. The switch to EVs helps on the emissions front, but it doesn’t ease congestion.
DPD has developed a Smart Urban Delivery Strategy based on three key principles: investing in clean, green vehicles, creating a smarter urban delivery model and finally, ensuring drivers can operate as efficiently as possible, with the best technology available. ‘By completely changing the way we work, we can make fewer, shorter journeys’, Dwain says.
A network of micro-sites
The centrepiece of the strategy will be a network of all-electric micro-depots, the first of which, in the heart of Westminster, opened in 2018.
The 5,000 sq ft micro-site acts as a satellite for DPD’s London City depot in Southwark. Before the new site opened, a fleet of 3.5t diesel vehicles travelled into central London every day from Southwark, averaging 614 miles in total.
The company is developing a network of these micro-depots across central London, meaning that its electric fleet will be based much closer to DPD’s end customers.
Micro-EVs and E-bikes
Parcels are fed into the micro-depots by electric 7.5t trucks, and the final mile deliveries are then made by a fleet of innovative all-electric vehicles including the Paxster, a micro-EV from Norway and a unique e-cargo bike, which DPD helped to design.
DPD partnered with Oxford-based manufacturer EAV to create the British-built e-cargo bike, the P1. The bio-mechanical hybrid electric-assisted pedal bikes have a range of 60 miles; with a 120kg payload they can cover 100 parcel stops in a day and then be recharged using a normal 13amp, 240V plug socket.
‘Previously, we had a fleet of diesel vans travelling hundreds of miles across central London every day, just to get to the start of their route’, Dwain explains. ‘The Westminster depot was a real game-changer for us: it is smart and it delivers tangible benefits in terms of reduced mileage and CO2. It is also great to be able to say our electric vehicles deliver to Her Majesty the Queen and the Prime Minister!’
The final piece of the Smart Urban Delivery jigsaw addresses the way DPD’s drivers work. ‘We’ve been looking at every aspect of our operation and challenging ourselves to do better’, Dwain says.
Drivers have been given handheld units to guide them to every address using the shortest possible route. These units have been another massive investment – both financially and in terms of the work required to integrate them into the operation in the most effective possible way.
Avoiding return journeys
The other technology helping DPD’s drivers work smarter is Predict – the company’s market-leading one-hour delivery notification service.
DPD sends a quarter of a billion Predict notifications each year to let customers know when to expect their delivery.
Over 7 million customers now use the DPD app to micro-manage their delivery preferences and tell DPD exactly how they want their parcel to be delivered if they aren’t going to be in – whether to leave it in a special safe place, with a specific neighbour or to drop it in to a convenient DPD Pickup parcel shop.
The end result is that DPD is now delivering 99.8% of all parcels ‘right first time’. That’s a massive 4.5 million extra return journeys avoided – or 3.5 million fewer miles travelled and tonnes of CO2 saved.
‘Our drivers are very efficient on their routes every single day’, Dwain tells us. ‘On the scale we operate on, small changes like these can have massive benefits. Each driver travelling fewer miles, every day, helps to reduce overall congestion and emissions.’
Barriers to zero emissions
DPD is leading the way in EV investment; it has won awards and been lauded as a future model for city-centre logistics. But Dwain has been brutally honest about the barriers blocking the ‘Road to Zero Emissions’.
In October, DPD issued a white paper with an eight-point action plan; it called on vehicle manufacturers, energy providers and national and local governments to start working together to create an infrastructure that makes large-scale EV deployment feasible.
‘We are a very fast-moving operation with a track record of investing millions in innovation and infrastructure in the last 10 years’, Dwain explains, ‘but this is a very different challenge. Personally, I would like things to be done a lot, lot quicker – but there are significant challenges and we rely on a lot of third parties.’
EVs for UK companies
One of the main challenges at the moment is getting hold of enough commercial EVs.
While the number of ultra-low emission vehicles on UK roads is growing rapidly, there remains a significant issue in the UK around the availability of all-electric 3.5t commercial vans – the workhorse of the parcel delivery sector.
Manufacturers have focused much of their early, and therefore expensive, research and development on the larger European left-hand drive market, meaning UK companies are struggling to get hold of the vehicles they need.
In recent years, DPD has bought around 1,000 new 3.5t delivery vans. But until very recently, right-hand drive electric versions just weren’t available. DPD managed to secure the first 100 MAN eTGE 3.5t vans in the UK, but the company would buy far more if they were available.
‘We are talking to all the major vehicle manufacturers’, Dwain says, ‘but it could still be years before we have the kind of availability we would like.’
Historically, the commercial vehicle market has been dominated by a small number of traditional manufacturers – but the new technology inherent to electric vehicles has seen a shift towards startup companies developing small and micro vehicles for final mile delivery.
However, regulators often find it difficult to keep up with innovation, and these new vehicle types challenge the norm. As a result, they present issues for regulators and government agencies.
No plans to slow down
The registration of the DPD Paxsters was a tough process for the company. If the government is going to achieve its ‘Road to Zero’ ambition, it must find a way to speed up the registration process of small-batch vehicles for use in the UK.
One of the other challenges facing DPD is around finding sites in inner-city areas for parcel depots.
‘Warehouse and distribution spaces have been priced out of city centres and sites are often prioritised for residential purposes’, Dwain reveals. ‘We are being creative in our thinking – repurposing under-utilised and unoccupied buildings – but even then, the legal process to get approval is ridiculously arduous and time consuming.’
Despite these issues, DPD is rising to the challenge of decarbonising its fleet. It’s currently rolling out a nationwide EV fleet, which means getting the vehicles and charging infrastructure into nearly 70 different locations and helping drivers transition to EV driving and micro-vehicles.
DPD has also just launched its Green website, which explains everything the company is up to – from recycling the shrink wrap used across the business to creating a new, 100% recyclable parcel bag, strong enough to protect customers’ goods.
Next, the micro-depot model will be rolled out to other cities across the UK. As Dwain sums up: ‘We’re not about to slow down any time soon!’