Is Amazon Planning A ‘Megafleet’ For Electric Delivery?

Amazon Planning Electric Delivery 'Megafleet'?

Pretty much anything Amazon does impacts so much else — and that truth, one of the longest-standing in the world of commerce and payments, seems ready to play out when it comes to fleets of retail delivery vehicles.

Reports have emerged that “megafleets” of Amazon delivery vans and trucks — “megafleets” being a descriptor for the tens of thousands of vehicles owned by certain companies — will be going electric.

The news stemmed from a Morgan Stanley report that says the eCommerce company’s goal of having half of its delivery trips “carbon neutral” by 2030 will spark a buying spree of electric vans and trucks. Amazon won’t be the only major company making such a move, Morgan Stanley said: “We think investors should prepare for more moves by megafleets to solve for sustainability.”

This goal for anticipated electric vehicles — which will serve the need for last-mile retail deliveries — follows Amazon’s order earlier this year of 20,000 Mercedes-Benz vans to expand its delivery fleet. Among the uses for those vans is allowing small businesses to carry packages for the eCommerce operator. Judging by the orders for the vans, the company expects 500 or more delivery companies to join its program. As well, the Morgan Stanley research note follows Amazon’s participation in a $700 million funding round for Rivian, which makes electric pickup trucks and SUVs.

Fleet Benefits

The anticipated move from Amazon would be about more than going green for the sake of going green, at least judging from previous, similar efforts undertaken by other companies. According to Vehicle Service Pros, “at the end of 2013, Coca-Cola converted 100 newly purchased 2014 Chevrolet Express service vans into fuel-efficient hybrid electric vehicles using XL Hybrids’ powertrain technology.”

The result?

A “15 to 20 percent fuel consumption reduction compared to its conventional vans,” the report said, quoting a Coca-Cola North America executive as saying the vans also required less maintenance than other vehicles.

Any push by Amazon to buy significant amounts of electric vehicles will have other impacts as well. As Morgan Stanley put it, such purchases would provide energy to take those vehicles “into the next level.” Another publication, GreenBiz, said Amazon’s move could mark a “tipping point” for electric fleets. “Other delivery companies — UPS, FedEx, DHL — are beginning to acquire electric delivery vans in an attempt to meet sustainability goals, reduce fuel costs and continue service in areas that have banned fossil fuel-powered vehicles — such as some cities in Europe,” the report noted.

Amazon has, indeed, already placed a relatively small order for electric vehicles, but U.S.-based consumers probably won’t see any signs of that. “Amazon does have at least one small public EV purchase order — 100 EV Mercedes-Benz Sprinter vans — that it plans to use in Germany,” GreenBiz said. “It might sound like a stretch for Amazon to make its own electric delivery fleet, but the company actually has made major leaps in cleaner logistics before. Amazon is one of the largest purchasers of fuel cell-powered forklifts for its warehouses, and it made a big investment in fuel cell maker Plug Power.”

Plastic Pushback

As environmental issues take on more importance for global society, players in the world of payment and commerce are responding — sometimes to gain good PR, sometimes in an effort to save money, oftentimes to achieve both of those goals.

Consider plastic — actual plastic, not just the word used to describe payment cards.

Late last year, researchers from the Environment Agency Austria and the Medical University of Vienna jointly presented evidence that there is so much plastic in the environment that we’ve actually begun to inadvertently eat it. Such knowledge caught the attention of Mastercard President of Cyber And Intelligence Solutions Ajay Bhalla.

“This is an issue we as a generation can no [longer] ignore,” he told PYMNTS in an interview. “Plastic is easy, yes, but we now need to be working on a bigger cause of reducing it. If we don’t all get behind it, the world will have a big problem. This is a matter of being environmentally responsible.”

To push that goal, Mastercard, in partnership with the world’s three largest card manufacturers – GemaltoGiesecke+Devrient and IDEMIA — has officially launched the Greener Payments Partnership to establish environmental best practices and reduce first-use PVC plastic in card manufacturing.

Such pressures to go green will surely increase. And no matter what happens, you can bet on Amazon making moves that will ripple across the larger global economy.