The Crown corporation’s CEO was on hand in Ottawa today to unveil Canada Post’s fleet electrification plan, part of a $1-billion effort to reach net zero emissions across the entire organization by 2050

Canada Post is joining the transition to zero-emission vehicles, making a public $1-billion commitment this morning to reduce its environmental footprint, including transforming its 14,000-vehicle combustion fleet to “50 per cent electric fleet by 2030 and 100 per cent by 2040.”

The announcement, made by Canada Post president and CEO, Doug Ettinger, alongside Cheryl Hodder, chief sustainability and legal officer, Joey Duguay, general manager of Quebec operations and other Canada Post officials, signals the future direction the Crown corporation is taking.

“Canada Post has one of the biggest fleets in the country, over 68,000 employees, a significant real estate portfolio, and an extensive supply chain. The challenge ahead is great, and we know the greening of our transportation is critical,” said Doug Ettinger, president and CEO in a press release.

Canada Post’s transition to zero-emission vehicles will carry a significant upfront cost. But the long-term benefits of zero-emission vehicles could could help the often financially beleaguered postal service’s bottom line.

In addition to meeting mandated government targets for ZEV adoption, an electric fleet could help Canada Post stay competitive in terms of environmental and social governance, optimize their fleet efficiency and realize total cost of ownership savings from refuelling and maintenance over the vehicle lifetime.

“I don’t think a lot of postal services anywhere in the world are today in a position where they can avoid going electric,” says Rahul Gangal, a partner at Roland Berger, a global consultancy that has worked with over 450 postal and logistics fleet around the world to help them identify viable plans to adopt ZEVs.

“It’s an idea whose time has come. And nothing can stop an idea whose time has come,” says Gangal, who leads Roland Berger’s automotive and industrials practice in Canada.

Long-term plan

Canada Post’s fleet electrification plan is a cornerstone of a corporate commitment to reach overall net zero emissions by 2050.

“Our climate commitments address Canada Post’s national operations from all angles. We’ll transform our fleet to electric, retrofit our buildings, build net-zero carbon buildings, and source renewable energy for our real estate and operations,” said Cheryl Hodder, chief sustainability and legal officer in a press statement.

Prior to today’s announcement Canada Post has remained tight-lipped on its plan to adopt zero-emission vehicles, but some of the company’s annual reports give glimpses into the steps taken so far.

In 2011, Canada Post piloted their first electric truck. By 2019 they were adopting, in earnest, electric and hybrid vehicles beginning with over 300 “hybrid electric upfits” of their 374 Ford Transit vehicles.

“They’re doing their work and they are doing it quietly,” says Gangal. “The cost economics is starting to make sense for electric vehicles, the supporting infrastructure needed for electric vehicles are starting to come along.”

According to Canada Post’s 2021 annual sustainability report, last year the company “celebrated the deployment of our 1,000th hybrid electric vehicle. In total, we added 740 low-carbon vehicles, raising the percentage of low-carbon vehicles to more than 10 per cent of our fleet.”

Per the company’s tally, as of 2021, there was one electric vehicle, 1,486 hybrid (hybrid and plug-in hybrid) vehicles, 120 alternative fuel vehicles an 1,607 “low carbon” vehicles in Canada Post’s fleet.

Canada Post also used two e-cargo trikes in Montreal last year in a proof-of-concept trial. From July to October 2021, the bikes delivered over 2,100 parcels and travelled over 1,400 kilometres. “The pilot and more testing in 2022 will shape a viable e-cargo trike solution,” reads the report.

In addition, the company’s new Scarborough processing centre — capable of processing one million packages per day — was purpose-built for electric vehicles: “… charging stations are being installed for employee use and the infrastructure is being provided for future use of electric five-ton fleet trucks,” reads Canada Post’s 2020 sustainability report.

Finally, the company plans to “host an electric vehicle day with purchase incentives” for employees in 2022.

Global postal fleets electrifying

While Canada Post has been doing a steady build towards today’s total fleet transition announcement, other postal services around the world have been moving more aggressively.

If you are looking for leaders among postal fleet racing toward electrification, more than likely the search will take you over the Atlantic.

From the United Kingdom to Norway to Austria and many countries in between, Europe’s postal fleets are embracing every vehicle from electric bikes to electric cargo planes to deliver mail.

“Europe has been far more aggressive in its electrification approach,” says Gangal.

“There are tens of thousands of electrified postal vehicles that are operating in mainland Europe. They are ahead on the learning curve and they are able to gather much more data around deployed vehicles, which helps them to make the right set of operating decisions.”

In Europe’s case a combination of factors have contributed to the region’s postal services becoming early movers in fleet electrification. The first is that, as Gangal says, momentum begets momentum. The other major reason is the luck of geography where compact countries have the advantage over expansive North America.

“Most postal entities in Europe are dealing with, geographically, much smaller areas than North American postal services and, often, geographically consistent operating conditions,” explains Gangal.

“So, if you are a cold country, you are operating in a certain temperature zone (like Sweden or Norway or Finland). If you are Spain, you are Spain and you are temperature bound.”

The benefit to more stable temperature conditions is the return on vehicle data is much faster. Where Canadian fleets of any type may have to pilot for a year or more to collect enough information on electric vehicles to assess suitability for a transition, in a more moderate climate the collection period can be shortened to a few months.

Unique challenges

Aside from having to operate in a temperature band that, at its most extreme, has an 80-degree range, Canada Post has other considerations that make its operating specifications unique and delicate to manage.

“Electrification is not about fleet replacement — it goes beyond this. It goes into infrastructure; it goes into workforce planning; it goes into operational deployment. It is a big transformation that occurs. It’s not a simplistic transformation,” says Gangal.

Gangal is unable to give specifics on what challenges Canada Post is facing (Roland Berger conduct analysis for the company), but like all the postal services he has helped to navigate the path toward a zero-emission fleet, there is no one-size-fits-all approach.

“Logistics companies that have high kilometre per day usage will require a slightly different type of vehicle than post logistics companies that have a low kilometre per day usage. And, consequently, they both require a different sort of charging infrastructure and a different sort of vehicle hold-and-deploy pattern,” says Gangal.

Canada Post delivers to 17 million addresses and has more than 22,500 delivery routes across Canada. In 2021, Canada Post vehicles — those directly owned and those under contract with third parties — travelled 204.2 million kilometres.

But despite the vast region Canada Post services, its individual vehicle operating profile falls into the bucket of a low-kilometre usage fleet — averaging in the low tens of kilometres per day.

This means that while Canada Post will have to make heavy-duty vehicle purchases (as confirmed by its preparations for five-ton electric trucks), it will have the opportunity to substitute existing combustion vehicles for more e-bikes.

Canada Post ZEVs on the road

As part of today’s announcement, Canada Post launched a pilot program for a low-speed, compact electric vehicle in the Ottawa area.

The vehicle will reach a maximum speed of 40 km per hour. The objective of the pilot, is to “evaluate its performance in operations and optimal safety procedures.”

The pilot will run for one year on delivery and collection runs.