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In Last-Mile Electrification, Amazon Sees Another Opportunity To Dominate

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In Last-Mile Electrification, Amazon Sees Another Opportunity To Dominate

Already dominant in cloud computing and online delivery, Amazon.com, Inc. (NASDAQ: AMZN) is taking its market-moving mentality to another multibillion-dollar sector: commercial transportation electrification.

"Our approach is not to wait around and see what the [original equipment manufacturers] deliver but to share our vehicle requirements and influence product design to meet our needs," said Maria Carne Lee, senior product manager, Global Fleet and Products, Strategic Initiatives at Amazon.

The path to zero emissions

Lee's comment came during a panel discussion hosted by the ACT Virtual clean transportation conference this week. During the discussion, which focused on first-, last- and middle-mile electrification, she doubled down on the e-giant's green commitments, ticking off a list of investments the company has made to reduce its carbon footprint.

Its biggest initiative is the Climate Pledge Fund, a $2 billion sustainability fund launched in June, to be invested in technologies across industry sectors. Logistics was identified as a top priority. 

Amazon is also bringing more of its transportation management in-house, with a focus on renewable energy sources and a broader effort to make company operations carbon neutral by 2040.

To date the e-giant has ordered 100,000 delivery vans from electric truck company Rivian — the single-largest electric truck purchase on record. Amazon is also one of Rivian's major investors, raising speculation that it may eventually acquire the Michigan-based outfit.

In July, Amazon announced it was purchasing 6 million gallons of sustainable jet fuel in a one-year deal with Shell Aviation that Lee said will help build demand for sustainable aviation fuels. "Air cargo is an important part of our operation," she said, "but it is also a carbon-intensive part of the supply chain."

The company runs e-cargo bikes in Europe and North America, and one of its newer initiatives is an an e-rickshaw program in India, according to Lee.

Greening e-commerce

Amazon's electrification push follows years of criticism from environmental groups and its own employees, who cite the carbon-intensive nature of the company's businesses along with its donations to climate change-denying organizations.

Activists and regulators are also circling e-commerce operations, with penalties on fossil fuel transportation expected to be implemented in many cities over the next decade.

Referencing an in-house analysis, Lee claimed the company's core businesses of online shopping and cloud computing "are already inherently more carbon efficient than traditional models." The analysis found that shopping online generates less carbon than driving to a store, and that on average a single delivery route can eliminate 100 round-trip car journeys. 

Other studies have yielded mixed conclusions about the environmental impact of online shopping. But even assuming buying stuff online does have a smaller environmental footprint than individual shopping trips, much more can be done to reduce carbon emissions tied to e-commerce.

During the height of the pandemic this spring, Lee noted, passenger vehicle traffic declined dramatically, but air pollution wasn't reduced to the same extent. 

The reasons vary depending on the city, Lee said: coal burning in Pittsburgh, petrochemical use in Houston — and trucking in Los Angeles.

"So we see that last-mile electrification is going to be critical," Lee explained, "and as we reduce emissions from commercial transportation, we'll see that larger impact that we can enable with having fewer vehicles on the road."

Asked how the coronavirus is impacting the e-giant's carbon reduction initiatives, Lee rejected the implication behind the question. "Sustainability never has to take a back seat at Amazon," she said. "Last-mile electrification is moving forward."

A zero-emissions fleet, custom-made for Amazon

Elaborating on the company's approach to driving the zero-emissions market, Lee said Amazon first defines the duty cycle and vehicle requirements, along with specific ergonomic and safety features, package capacity, and the range to support delivery routes.

"We share these requirements with OEMs and look to see which companies can come the closest to meeting our needs," she said. In the Rivian case, Amazon brought in operations teams and drivers  to ensure the delivery van was "truly optimized."

Supplier diversity is critical to the company's success, Lee added, so Amazon "continues to test new vehicle types and seek out additional EV suppliers to meet our evolving transportation needs."

Related stories:

Amazon targets climate change with $2B VC fund

In Rivian, Amazon may have ‘bespoke automobile' at its service

Amid a pandemic, Amazon pivots — and profits

 

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Posted-In: electric vehicles FreightTech