It can be a bit daunting when one of your key customers tells you you’ve got six years to convert your entire fleet to zero-emissions vehicles, especially when you’re not a big corporate and reliant on hundreds of self-funded owner-drivers. But some out-of-the-box thinking has All Purpose Transport on track to hit the ambitious 2025 target
As Tony Chance hits official retirement age, he finds himself an unlikely pioneer in arguably the greatest transformation in transportation since the shift from horse and cart to the automobile.
A veteran truck driver with more than 41 years behind the wheel, the 67-year-old owner-driver is leading the charge to decarbonise the nation’s trucking industry, having clocked up some two-and-a-half years and over 60,000 kilometres in one of the first battery-electric trucks to hit the road in Australia doing local IKEA deliveries for Brisbane-based All Purpose Transport.
And while he cops some ribbing from his mates, Tony takes it all in his stride. “All the guys in the office give me a hard time, but I tell them it’s great training for when I get my mobility scooter!” he quips.
The great thing about these trucks is that they are designed and made as electric. It’s great for doing last-mile deliveries. I love it!
There’s another reason he’s smiling. Having picked up the near-new 5.5-tonne JAC EV for less than the cost of a new diesel-equivalent, Tony is laughing all the way to the bank with operating costs also dramatically lower than his previous diesel-powered Isuzu 600.
Tony estimates it costs him $22-23 a night over 2.5-3 hours to fully charge the vehicle to deliver a range of 180-200km, more than enough to cover his average 100-150km a day doing local deliveries for IKEA.
“Plus, I don’t have to worry about changing air filters, fuel filters or oil,” he says, adding that, contrary to reports, he’s also getting 20-30 per cent more mileage out of his tyres.
“When I decided to buy I was wary. But the great thing about these trucks is that they are designed and made as electric. It’s great for doing last-mile deliveries. I love it!”
An unlikely pioneer, Tony Chance has clocked up some two-and-a-half years and over 60,000 kilometres in one of the first battery-electric trucks to hit the road in Australia
While the numbers added up for Tony, that was not the case back in 2018 when IKEA delivered All Purpose Transport the news that all deliveries would have to be completed by zero-emissions vehicles by 2025 – equating to around 100,000 deliveries per annum in a region spanning 1,853,000 square kilometres from Byron Bay to Cairns.
The bleeding edge
All Purpose Transport CEO Paul Kahlert concedes it was a “bit daunting” when one of your key customers informs you you’ve got six years to convert your entire fleet to zero-emissions vehicles. Especially when that client accounts for around 10 per cent of your business and the livelihoods of some 20 families.
Founded almost 50 years ago, the family-owned company employs 290 contractors (out of a total team of 400) operating a fleet ranging from vans to B-doubles doing more than 3,000 deliveries per day for a client list also including Rheem, King Furniture, Yalumba, BP, Dairy Farmers and Cotton On.
“Our initial reaction was that we needed to pivot our way of thinking. We were thinking in a very traditional courier-taxi truck model. It’s a different way of thinking when you’re operating on very small margins,” he says.
We knew we were hopping on the bleeding edge of technology and we knew we would be battling scepticism both internally and externally.
“Especially when your client represents a decent part of your business. And this is a family business; how do you tell 20 families they’re not needed anymore because we lost the business?
“It required some creative and out-of-the-box thinking. We had to put aside any bias and cynicism about electric vehicles,” he adds.
The first, and most significant, challenge was a fundamental one: back in 2018 there simply were no electric trucks available in Australia.
“And it was brand-new tech so we couldn’t even ask any of our peers about it. We went to all the major OEMs and asked whether we could get an EV to Australia and they all said yes but …,” Kahlert recalls.
All Purpose Transport CEO Paul Kahlert says out of sheer desperation the company came up with the idea of promoting the EV transition as a health issue
At the time the only option available was an SEA Electric truck – basically a rebadged Hino fitted with the then Melbourne-based company’s proprietary SEA-Drive electric propulsion system. The truck broke down after two days.
Old dogs, new tricks
Convincing subcontractors to purchase “new tech” for up to $180,000 was also a “hard sell”, especially when the traditional operating model was to purchase five- to 10-year-old second-hand vehicles.
“[The new model] required owner-drivers to purchase new vehicles – and new, expensive vehicles. And EVs had a bad name – they had a reputation as bad technology with no range,” Kahlert says.
“We needed to create a narrative for our zero-emission story. We knew we were hopping on the bleeding edge of technology and we knew we would be battling scepticism both internally and externally.”
We flipped it on its head and made it a health issue. A diesel vehicle emits 12 tonnes of C02 each year of operation.
Out of sheer desperation the company created a “narrative” for its zero-emissions story based on the business’s “family-first values”.
“We came up with a concept of why we’re doing it which was marketable to both our people and to clients,” he says.
“We flipped it on its head and made it a health issue. A diesel vehicle emits 12 tonnes of C02 each year of operation. Diesel particulates from this vehicle contribute to asthma, allergies and respiratory illness. They have a high impact in the communities in which our families live.”
Another challenge was that traditional lenders were reluctant to support the new technology, Kahlert adds.
As well as an initial lack of vehicles, All Purpose Transport also faced challenges accessing limited charging infrastructure, so it decided to build its own
To fast track take up, All Purpose Transport was initially forced to invest $1 million to fund the first six vehicles, which it rented to its contractors.
“We needed to find a commercial partner who would support our owner-driver model,” he says. “
“Then CarBon came along in September 2022. That was a game changer.”
Under the ground-breaking partnership, the sustainable novated leasing, fleet management and vehicle leasing company offered a finance solution for contractors.
By 2021 our zero-emissions journey was well under way. We were completing over 200 deliveries a week on electric vehicle.
The fully maintained operating leases incorporate everything from servicing and maintenance to registration and insurance, all wrapped up into a weekly or monthly payment.
“The whole thing really accelerated from there, By 2021 our zero-emissions journey was well under way. We were completing over 200 deliveries a week on electric vehicle,” Kalhert says.
No charge
As well as an initial lack of vehicles, All Purpose also faced challenges accessing limited charging infrastructure. Its vehicles were “competing with Teslas and Commodores” to meet delivery windows, Kahlert says.
“We knew future commercial charging was coming, so we needed to make short-term decisions to support our EV growth … and build it ourselves,” he adds.
Convincing subcontractors like Tony Chance to purchase new tech for up to $180,000 was a hard sell for All Purpose Transport
Additionally, to support its delivery partners IKEA Australia is investing $4.5 million in dedicated electric chargers in all its stores across the country.
The home furnishings retailer says with accessibility of urban charging infrastructure a frequent challenge for logistics providers, the investment represents a major step forward by a retailer that will support the road freight logistics sector to decarbonise.
In partnership with JET Charge, there will be electric charging and energy management systems installed for six vehicles at each of the 10 IKEA stores around Australia, plus charging for 28 vehicles at its Central Distribution Centre warehouse in Sydney’s Marsden Park, providing drivers with accessible, low-cost charging for a range of electric delivery vehicles.
The new electric chargers are a mix of AC and DC charging options to cater to the different needs of IKEA delivery partners’ trucks and vans, with 22kW and 20kW for overnight charging, and 75kW and 150kW for fast charging, as well as the JET Charge CORE energy management system which allows energy to be intelligently controlled within the site.
We knew future commercial charging was coming, so we needed to make short-term decisions to support our EV growth … and build it ourselves.
The installation project being carried out by JET Charge is currently under way and is expected to be completed by the end of 2024.
Alexandra Kelly, Zero Emissions Delivery Lead, IKEA Australia, who spoke at HVIA’s recent TruckShowX decarbonisation summit, says, “We have made exciting progress with electrifying our fleet, especially in the last 12 months, but we know a significant barrier for our delivery partners being able to make the switch to an electric vehicle is limited access to charging infrastructure.
“By investing in national network of dedicated chargers for electric trucks and vans at all IKEA sites, we are providing access to electric charging at the point of fulfilment where orders are being picked up.”
“With the support of innovative partners like JET Charge, we hope to address key challenges like this for the freight and logistics sector.
To support its delivery partners IKEA Australia is investing $4.5 million in dedicated electric chargers in all its stores across the country
“Supporting our delivery partners to electrify sees us move closer to our overall goal of 100 per cent zero-emissions truck deliveries at IKEA Australia.
“But more importantly, we believe it can also help drive further positive change we want to see in the industry as an investment in the future of last mile delivery.”
Charging ahead
After adding four Chinese-made Skywell EC11 battery electric vans to its fleet of one JAC light-duty truck in January 2021, All Purpose added another two of the Chinese-made vans as well as an Asiastar van made by Foton.
“Foton is the ‘Corolla’ of trucks. There’s not much fancy about them, but they’re just doing local deliveries. That’s been a big change getting an OEM-type vehicle,” Kahlert says.
Foton is the ‘Corolla’ of trucks. There’s not much fancy about them, but they’re just doing local deliveries.
“And now the Ford eTransit has arrived – they’re game changers as our drivers are already driving the diesel Transit.”
With the addition of two eTransits, All Purpose’s battery-electric fleet now numbers 15, with another five scheduled to arrive in September, including two more eTransit’s and one from another Chinese truck manufacturer Farizon, part of the Geely group of companies which also owns Volvo cars.
The fleet expansion will put the company on track to meet IKEA’s requirement for all deliveries to be completed by zero-emissions vehicles by 2025.
As of May 2024, IKEA Australia hit a new milestone, with 40 per cent of truck deliveries to customers now made via a fleet of 51 zero-emissions vehicles.
With the addition of two Ford eTransits, All Purpose’s battery-electric fleet now numbers 15, with another five scheduled to arrive in September
Kahlert says come August around 60 per cent of All Purpose’s IKEA deliveries will be completed by electric vehicles – and is on track to hit the 100 per cent mark by August 2025.
Powering up
The company is also in the process of expanding its current 180 rooftop solar panels to supply 100 per cent of its day-time energy requirements, including its truck charging network. It currently covers 25 per cent of consumption.
This will deliver further cost savings to subcontractors charging at its depots, he says. Currently, Kahlert estimates it costs around $27 to fully charge a vehicle versus around $100 for the same amount of diesel, saving owner-drivers around $400 a week.
All this is great for the environment, as well. Kahlert estimates the combination of the EV fleet, rooftop solar and “green power” has reduced the company’s C02 output by over 30 tonnes a month.
This is a transition as big as the shift from horses to cars. And we have to thank IKEA for stopping us from being naysayers and getting on and doing it.
“For each carton we’re delivering we are saving 0.3kg of CO2,” he says.
While IKEA started All Purpose on its decarbonisation journey, Kahlert says it’s now harnessing the wider opportunity.
Leveraging large corporates’ ESG requirements, he credits its new narrative with securing new contracts with Cotton On and, more recently, starting EV trials with global hospitality group Bunzl.
“This is a transition as big as the shift from horses to cars. And we have to thank IKEA for stopping us from being naysayers and getting on and doing it,” he says.
