Tata Steel's FAMD Goes Green; Electrifying till the Last Mile



In its commitment to environmental sustainability, Tata Steel’s Ferro Alloys and Minerals Division (FAMD) commenced testing electric vehicles in its logistics operation. The FAMD green logistics’ move not only represents Tata Steel’s sustainable transition but also to reduce air pollutants emitted from fuel-based transportation methods. The EV is aimed at electrifying last mile deliveries with a capacity to carry up to 42 tons covering 140 km for a single charge.

Electric Vehicles in Logistics are power training every aspect in the supply chain ensuring less complexity till the last mile delivery journey. When we look at delivery agents today, a lot of orders are reaching households riding on EVs, thanks to EV rental companies which have got logistics companies’ back for that matter. Many are also eager to incorporate EVs into their delivery fleet because they help decarbonize last-mile delivery, which is the final leg of the delivery process from the distribution hub to the customer's doorstep. Judging by the statistics of NITI Aayog and Rocky Mountain Institute, India could lower logistics costs by four percent of its GDP and avoid 10 Gigaton of CO2 by 2030 by deploying EVs.

These numbers appear to be attainable given the significant investments being made by logistics companies nationwide to implement this environmentally friendly transportation technology. The logistics sector’s decision proves more advantages than conventional trucks. The Indian government also has its fair share of play by introducing subsidy schemes that allow logistics businesses to purchase EVs for less money. 

Due to their capacity to lower operating costs, boost productivity, and reduce exhaust emissions, electric vehicles (EVs) have become more popular in India's logistics sector.

Some Problem Statements Covered by EVs

According to the Centre for Study of Science, Technology, and Policy (CSTEP), around 70 percent of commodities are transported by road in India, primarily by huge fossil fuel-dependent vehicles. In addition, the country's carbon emissions are accounted for by the road freight industry, which currently represents 54 percent of those emissions.

EVs show promise as a solution in this situation. EVs have the potential to completely transform the logistics sector by reducing direct greenhouse gas emissions. However, India faces its fair share of obstacles in the industry's adoption of EVs.

Overcoming the Barriers of Charging Infrastructure with EV-Friendly Roads

Due to India's inadequate charging infrastructure, EVs in the logistics sector can be used on routes that can be reached after just one battery charge or at sites with recharge stations. However, this obstacle will soon be resolved as the Ministry of Road Transport and motorways is preparing to build EV-friendly motorways with regular charging stations.

The new policy’s incentives are expected to ensure the transition of last-mile EV delivery services glide smoothly. This gives the confidence to companies like Zypp Electric to enable logistics companies to switch to EVs. Today, if we dig deeper into the EV industry, we will find a number of quick ecommerce, food delivery, grocery delivery, and logistic companies partnering with EV rental companies. Their goal is to use the EV and charging infrastructure that is already in place and that is constantly changing to execute carbon-free last-mile delivery.

As Prahalada Rao, President and Client Partner - Tata Motors, Tata Technologies puts it in a recent interaction with CEO Insights India Magazine, “Load distance combination is a big one for logistics. India’s load distance distribution across and within cities is the same. If logistics companies orient their thinking towards load distance distribution, they will also get into volume, since last-mile is many times about volume and not weight”.

“The industry must rethink their question and answer in this space, while being mindful of the various situations that India goes through, is where the Indian logistics industry can find better value. I believe it has to be more at an intuitive level that could enable the industry to do more and better”.


Reducing High Upfront Costs with Government Programs and Incentives

Compared to vehicles powered by fossil fuels, electric vehicles have a much higher initial cost of ownership. However, customers might receive a direct reduction on the price of an EV under India's FAME-II program for boosting electric mobility. Therefore, lower up-front expenses provided by government incentives and laws for commercial cars can aid in incentivizing logistics companies to switch to EVs for their fleet.

EV Batteries are Charged using Renewable Energy Sources Rather than Fossil Fuels

Although utilizing an EV might not contribute to air pollution, the electricity that powers them is produced using fossil fuels. Therefore, any logistics company that is serious about going green should think about using renewable energy to charge its EV fleet. According to PIB, non-fossil fuels account for 40 percent of India's installed energy capacity; therefore this could become a reality soon.

Developing Substitute Batteries to Address Logistics-Related EV Battery Difficulties.

EVs' key component, their batteries, is both expensive and huge, which limits the amount of storage available in delivery vehicles. Delivery times are lengthened by the fact that EVs start up more slowly than their conventional equivalents. Creating solutions to address these issues might help logistics-dependent businesses migrate to electric vehicles.

The development of smaller, more inexpensive, high-performance EV batteries utilizing domestic raw materials, along with the production of cleaner electricity and the supporting infrastructure, will be crucial to the growth and sustainability of EVs in logistics in India.

Beyond only making deliveries, these EV rental firms also want to address a number of problems, including the need for capital investments in EVs and charging infrastructure, driver training, effective fleet utilization, and rider profits. Most notably, there are substantial operational costs associated with delivery on an ICE vehicle, which results in decreased rider earnings. Shared mobility will most notably assist businesses in reducing the high operational costs of delivery on an ICE vehicle and improving the incentives they provide to their delivery partners.

The future could become not only electric but also green as we move to transition dramatically from fossil fuels to all-electric transportation. We will be able to capture much of the untapped potential and bring a completely new vision of mobility into view.