Global logistics giant UPS NYSE: UPS) manages urban logistics by making legacy transportation systems more efficient and investing in innovative, low-impact vehicle and delivery technologies.
That was the takeaway from a FreightWaves LIVE @HOME fireside chat featuring Peter Harris, international sustainability director for UPS.
“We’re trying to develop a tool kit of innovations and then as we go around the world we try to select the best solutions,” Harris said.
Setting the stage for the conversation, Harris noted that the world is urbanizing, with more than half the people on the planet living in cities. Fueled by the pandemic, e-commerce purchases are surging.
In that context, urban logistics, the collecting and delivery of items we need and want to live, has become “essential for successful urban economies,” Harris said.
UPS itself carries about 3% of global GDP on a daily basis, according to Harris.
That kind of volume brings with it an array of economic and environmental challenges that need to be managed. The two biggest ones are emissions and congestion.
Harris said UPS approaches those issues from two perspectives: The first is efficiency — that is, how to take conventional technologies and optimize usage.
The second is innovation: how to go beyond diesel-powered delivery and even beyond the truck to bring low- or zero-impact alternatives to market.
UPS has been “on the foothills” of electrification for more than a decade, Harris said, but recently pushed the boundaries of those investments with a new concept electric truck, to be built by United Kingdom-based company Arrival.
UPS has committed to purchasing 10,000 of those vehicles, in a move that matches Amazon’s partnership with Rivian, the electric vehicle startup that is building the e-commerce and tech giant a custom delivery vehicle.
Ticking off other electrification projects, Harris said UPS in London deployed the world’s first smart grid and energy storage solution to get power to electric vehicles more efficiently.
Bicycles are a big part of urban logistics strategy for UPS, which was founded in 1907 as a bike courier service in Seattle.
Today entire urban regions, downtown Munich for one, are being serviced with almost no trucks but plenty of electric assist bicycles, Harris said.
European cities are at the forefront of UPS cycle delivery solutions, as their layout is more conducive to cycling and urban planning objectives that encourage more walking and biking and are now penetrating the logistics space.
Cities can support UPS’ efforts to reduce traffic and emissions by funding innovative pilot projects and tweaking regulations around parking privileges and curbside access, Harris said.
Less obvious areas where UPS looks to government to remove roadblocks include reviewing the cost structure around power grids to encourage fleets to electrify, he said.