The Future of Commercial Transportation

October 03, 2018

I recently attended the IAA Commercial Vehicle tradeshow in Hannover, Germany, to see the latest trends in transportation, logistics and mobility. There is one word that defines what I saw – Electrification. While electric vehicles (EV) and plug-in hybrids have become a mainstay in personal vehicles, it seems like the commercial truck and bus industries are all in on electric. Volvo, Mercedes, Renault, Ford, Iveco and BYD all had pure electric vehicles on display at the show.

As batteries have become lighter and more efficient, larger vehicles that run on fixed routes, such as buses, shuttles, pickup & delivery and refuse trucks, are looking beyond hybrid and CNG power trains to all electric models. This is especially true for the European markets, where fuel prices are higher and environmental and noise regulations can be stricter than in the United States. Electrification will also impact the last mile for companies in the logistics and distribution industry, where smaller loads and frequent stops make sense for all electric or hybrid vehicles.

One of the OEMs at the show was BYD, a Chinese bus manufacturer, who is providing the all-electric buses for IndyGo’s Red Line. Every week, Chinese manufacturers are producing a quantity of electric buses that is equivalent to the entire London bus fleet. This has had a significant impact on fuel consumption in China, with some sources estimating a 3-5% drop in overall fuel consumption in China as a result of electric buses deployed around their country. The New York Transit Authority has said it will move to make its fleet of 5,400 buses all electric by 2040. It already has 60 on order and 10 in a pilot test.

So, while the U.S. may be slower in adopting electric vehicles in commercial-duty applications than EMEA or Asia Pacific, we have to be prepared for infrastructure advancements and competitive influences that may dramatically change the distribution and transportation markets in the very near future. While many people are talking about or are focused on autonomous vehicles, I believe electrification will be the first wave long before autonomous vehicles make it to U.S. highways and city streets. Our legislators, city planners and logistics professions need to get up to speed quickly on the electrification of their fleets.

CVR has extensive experience in the commercial transportation industry with clients in the engine, transmission, trailer & truck body, logistics and airline industries operating throughout the U.S. and around the globe. If you need help making sure your transportation brand is staying ahead of the competition, give us a shout. We would be happy to help.