Policy

6 November 2023

“The status quo sometimes feels as if we’re living in a house with only one power socket”

From hydrogen and biofuels to battery power: the logistics industry is seeking alternatives to the combustion engine. In our latest Opinion of the Month, Lars Siebel, Head of Logistics and Supply Chain Management Retail Germany, reports on experiences with alternative drive systems, the need to plan ahead and urgent public-sector investments.
Reading time: 7 min.

Dear Reader,

Individuals, politicians and companies: anyone wanting to minimise their impact on the climate knows there is a huge leverage in the transportation sector – and the REWE Group’s logistics are no exception. Time is of the essence: Germany is aiming for climate neutrality by 2045, and as a company we have also set ourselves ambitious climate targets. What’s more, several government interim targets have already been missed, which is increasing the pressure on all parties.

We began stepping up our tests with alternative drive systems some time ago. The requirements are high: our trucks transport goods – including fresh and chilled products – over hundreds of kilometres. Through a range of projects, we are analysing such things as consumption figures, the impact on operational processes or route planning, as well as investigating how business would be affected. Vehicle manufacturers, network operators and, of course, we ourselves are continuously learning from these pilot studies: after all, there is still a lot of unexplored territory for all parties. From my perspective – and I’m certainly not alone – it is still far from obvious which alternative drive systems will prevail in the transport sector in the future. That is why we are taking a broad approach to the tests.

Our own hydrogen fuel cell-powered trucks are doing the rounds in the REWE West and North regions. Their built-in cold storage cells mean that they can be used in the same way as conventional trucks and deliver chilled or frozen products. The fuel is “green”: the hydrogen fuel used is produced with renewable energy, which enables 100% emissions-free operation.

Meanwhile, in Berlin, seven fully electric trucks have been supplying over 300 REWE stores since May. Our partnership with Swedish freight technology company Einride has not only reduced the carbon footprint of our trucks by hundreds of tonnes, but they now also make far less noise on their journeys through Berlin. The trucks have a range of 300 km, so they are a good option for shorter routes in urban areas. They are charged at our logistics site in Oranienburg. Excellent progress has been made in recent years and we are pleased to say the latest use cases – which also include the transportation of chilled produce – have shown the vehicles to be suitable for deployment and reliable.

These practice tests have provided a huge amount of insight, but in the long term the entire transport and logistics sector must reach a point where these drive systems can be rolled out more widely. Government at national, state and city level must act more decisively if climate transition is to be achieved. This is also essential for Germany as a business location.

Lars Siebel, Head of Logistics and SCM Retail Germany
lars-siebel
Lars Siebel, Head of Logistics and SCM Retail Germany

These practice tests have provided a huge amount of insight, but in the long term the entire transport and logistics sector must reach a point where these drive systems can be rolled out more widely. Government at national, state and city level must act more decisively if climate transition is to be achieved. This is also essential for Germany as a business location. But this will require huge investment in the relevant infrastructure. The distribution networks are currently not efficient enough for the necessary charging infrastructure in freight transport. Local public utilities are overloaded and industrial areas, where logistics are generally located, must be given far more consideration in network expansion planning. The status quo sometimes feels as if we’re living in a house with only one power socket.

Do not get me wrong: we see this as our responsibility too. For example, we are developing our storage locations and pressing ahead with the installation of photovoltaic systems on the roofs of these facilities. A photovoltaic system provides green energy at our management and logistics centre in Henstedt-Ulzburg. However, the solar panels, which cover an impressive area of almost 6,500 m2, only provide around 10% of the site’s energy requirements. Nevertheless: this is still a forward-looking project by my colleagues at REWE. However, it will not be possible to charge a fleet of e-trucks using this method, even though this is what some parties outside the company repeatedly recommend.

Together, we must find a way to refuel or charge alternative drive systems mid-journey. Promising tests with overhead lines and induction are already being carried out. And what else is needed? Forward planning! Framework parameters such as toll exemption for liquefied natural gas (LNG), subsidies for vehicles and infrastructure projects, operating licences for new vehicle types such as long trucks, which allow us to reduce the number of journeys and therefore save energy regardless of the type of drive system; regulations pertaining to emissions and noise control (such as the urgently needed adjustment of the so-called TA Lärm (technical instructions on noise abatement) for inner-city journeys) orstatutory expansion targets for e-transport must be calculable over a longer period of time and backed up with concrete annual figures. An e-truck is used for eight years and the acquisition costs are very high. For medium-sized delivery companies in particular, such calculations no longer add up. Because we work very closely with small and medium-sized delivery companies, this is a subject that is particularly close to my heart. At the REWE Group, part of the truck volume is covered by our own fleet, and we also work closely with regional, medium-sized service providers. These companies tell us very clearly that they are highly reliant on public subsidies to handle the cycles of innovation. It is essential that politicians also take this point into account.

I’d like to close with a question that I am often asked: how do the truck drivers react when you give them a truck with an alternative drive system? I am happy to say: they are delighted! We even noticed that the use of modern technologies makes this important job much more attractive! A a clear sign that we should all heed, given the considerable challenge of recruiting skilled personnel to work in logistics.

Yours Lars Siebel

lars-siebel
About:
Lars Siebel
Head of Logistics and SCM Retail Germany

joined the REWE Group in January 2020.