In major U.S. and Canadian cities, FedEx is conducting trials with electric carts for last-mile delivery.

• In 2022, FedEx will trial electric carts for making deliveries on its Express routes in 10 U.S. and Canadian cities.
• In every big city it serves, the company aims to tackle the issue of limited parking through the use of electric delivery carts.
• In New York City and Toronto, the delivery giant has tested the EP1 electric cart created by General Motors’ BrightDrop.

In 2022, FedEx will trial electric carts for making deliveries on its Express routes in 10 U.S. and Canadian cities.

In every big city it serves, the company aims to tackle the issue of limited parking through the use of electric delivery carts.

In February, e-commerce sales increased by 86% compared to prepandemic levels, as per data from Mastercard. However, the number of parking spots and loading zones in New York City and Toronto, where Mastercard is testing the EP1 electric cart made by BrightDrop, remained largely unchanged.

FedEx Express's managing director, Russ Musgrove, explained during a Manhattan demonstration on Wednesday how the company's carts are designed to serve skyscrapers and densely populated areas. This allows for a reduction in the number of vehicles needed to service the route and enables the courier to operate more efficiently, minimizing back-and-forth trips to a truck.

Despite a surge of partnerships between delivery services and EV manufacturers, the electrification of the global supply chain has been a gradual process for the largest fleet operators. UPS has pledged to purchase up to 10,000 delivery trucks from Arrival and utilizes electric bikes and ATVs in Europe. DHL has acquired electric planes to transport packages from hubs to smaller markets. Amazon has committed to purchasing 100,000 EVs from Rivian and will be the first customer for Stellantis' Ram ProMaster electric vehicle.

FedEx is pleased with the early results from its pilot program. The company's tests in New York and Toronto have shown that using electric carts can increase the number of packages delivered per day by 15%. By deploying a truck of electric carts and using separate passenger vans to transport couriers, FedEx estimates it can reduce the use of trucks on each route by up to 25% per day.

While the company recognizes that its current sample size is limited, with trials only in New York and Toronto, the 10 cities for this year's pilot program have not yet been finalized. However, Musgrove stated that the company believes the greatest potential lies in international cities such as Sao Paulo, Barcelona, and Hong Kong.

The increase in diesel prices, up 27% in the past month, has boosted interest in electric carts and EV delivery vehicles, according to BrightDrop CEO Travis Katz.

"The global oil market instability and rising prices are prompting people to recognize the need for change in the electrification movement, according to Katz," he stated.

To ensure e-commerce growth without increasing costs, congestion, and emissions, what measures can we implement?

The relationship between FedEx and BrightDrop is being strengthened through electric cart testing. Wedbush analyst Dan Ives has referred to FedEx as the "Golden Goose" of EV customers.

FedEx is currently testing the EV600 delivery van from BrightDrop in California and is developing a plan to add up to 20,000 EV delivery vans as part of its $2 billion initiative to become carbon neutral by 2040.

Katz claims that the cost of charging and operating an electric van from BrightDrop is now even lower than fueling a diesel truck, with savings of approximately $7,000 per vehicle.

"Before gas prices increased, operational savings were around $7,000 a year. However, with the current gas prices, the savings have nearly doubled to almost $14,000 a year," Katz stated.

FedEx is hoping that electric carts will enable it to shift its operations before any changes in zoning or laws compel it to do so.

The Green Loading Zone project in New York City, set to begin in the first half of 2022, will prioritize curb access for zero and low emission vehicles. Additionally, the city Department of Transportation has launched an “Off Hours Delivery” program to assist logistics companies in making deliveries during non-peak hours.

Some markets do not allow commercial vehicles to operate during the day in many cities, which affects urban mobility and the movement of goods during business hours, according to Musgrove.