Estimates by the Sustainable Mobility Network in India show that e-commerce emissions, if unchecked, could grow to 8 million tonnes of CO2 by 2030, in just the last mile of delivery.
The e-commerce sector in India has witnessed remarkable growth over the last decade. It has never been easier or faster to receive goods at the doorstep and that too, with just a few clicks. Between 2015 and 2020 alone, the size of e-commerce has nearly doubled and the surge in demand is expected to propel the sector to an estimated growth of Rs 165,600 crore between 2023 and 2027. Such fast deliveries offer convenience, but it also comes at a price.
Last mile delivery can emit 8 MT CO2
The last mile, which is the movement of a product from its final delivery hub or warehouse, produces more than 50 per cent of all emissions in delivery journey and also accounts for more than half of all costs associated with delivery. Estimates by the Sustainable Mobility Network in India show that e-commerce emissions, if unchecked, could grow to 8 million tonnes of carbon dioxide by 2030, in just the last mile of delivery. To put that in perspective, it equals the emissions of 20 gas fired power plants in a year.
A majority of the bustling vehicles making these deliveries currently run-on internal combustion engines (ICE), which are responsible for a huge chunk of the emissions. Hence the overall sustainability of the delivery sector in India is not just a cause for concern but needs immediate action. The complete supply chain requires an overhaul and rethinking, where convenience is not largely disrupted but decarbonisation is initiated.
While delivery companies need to take a multi-dimensional approach including aspects like route optimisation, localised sourcing and warehousing, recalibrating package sizes to reduced number of trips etc, the key to decarbonisation hinges on accelerated electric vehicle (EV) transition. This is already underway in certain market segments, signalling that change in the last mile delivery sector can be swift with the right interventions.
EVs are the mainstream in 2- and 3-wheelers
Even till the beginning of this decade, EVs, especially two- and three-wheelers had limited market penetration. The grouses were plenty, including cost concerns, limited charging infrastructure, concerns over safety and lack of understanding of the advantages of adoption. Cut to four years later, they are becoming mainstream and ICE two- and three-wheelers are rapidly becoming part of a sunset industry with a definite and fast approaching end-date. While 2019 saw only 166,819 EVs (across segments) sold, 2021 saw a jump above pre-covid levels to 331,498 vehicles. In 2022 the million mark was breached at 1,024,723 vehicles and a further 50 per cent rise to 1,525,179 in 2023. Approximately 94-95 per cent of the vehicles sold have been in the two- and three-wheeler segments. These numbers prove that a transition is imminent. In December 2023, three of the top 10 selling scooters in India were electric, cementing the growing demand for clean mobility in the country.
Reduced toal cost of operation
Transitioning to EV is the next right step forward. It not only helps to reduce emissions but also saves the exchequer on oil imports. Topping up all this the total cost of operation (TCO) for electric two- and three-wheelers is significantly lower than petrol vehicles in the long run. A business case can be made purely from the economics of their operation and the long-term accruals to the delivery riders and the companies.
The way forward
Market leaders in India, like Flipkart and Zomato have already made commitments to transitioning their delivery fleets to electric by 2030- and they’ve also been consistently meeting their interim targets. Delhi government has recently announced the EV Aggregators Policy which mandates a time-bound transition to EV for last mile delivery companies and other fleet aggregators. The union government, especially through the Niti Aayog, has also identified the last mile delivery sector as a crucial one for accelerated transition with the Shoonya campaign actively engaging companies as part of their initiative and also creating consumer awareness.
It is becoming increasingly clear that 100% adoption of electric vehicles in the last mile delivery sector cannot be achieved by individual companies or purely through policy documents. It requires collective effort and shared responsibility in ensuring that all aspects are prioritised – addressing the entire ecosystem – be it by manufacturers, charging infrastructure companies, financial institutions, e-commerce, food and hyperlocal companies, logistics companies, B2B (Business to Business) fleet operators or on ground implementation of government policy. State and city administrations in particular must also take bold steps, providing the necessary support and infrastructure to make this transition feasible and holistic.
