Packfleet

national average. We also try to provide upward progress for our drivers into our office-based live operations.”

Another key objective for the company was to be zero emissions from the start.

“We have a fully electric fleet of over 50 vans doing deliveries inside the M25,” says Thomas. “We deliver food, wine, beer, clothes, cosmetics and just about anything people want for strong B2C brands.

“We have a mix of makes – half the fleet is Maxus, mainly the smaller eDeliver 3, and the rest is a mixture of e-Experts and eSprinters.” anddispensers, fuelstoragetanks, tankgaugesandfuel managementsoftware forclientandweb-basedsolutions.

Thomas admits that Maxus was something of a “stop gap”, as it was the only OEM to have good availability of 3.5-tonne electric vans when Packfleet bought its first batch of vehicles in October 2021.

Merridalesystemsareinstalledatover4,000sites throughouttheUK,Ireland,ChannelIslandsandHolland.

Upto400,000vehiclesfuel everydayonaMerridalesystem.

▍Highestbuildquality

▍Designedtolastaminimumof10Years

▍MeetsATEXfordieselstandardswhereapplicable

▍Optionalreportingsoftware

▍Accurate,robust,reliableandup-gradable

▍UKdesigned,developedandmanufactured

“What we have found with operating a large fleet is that there are huge benefits in going with manufacturers that have been doing this for a long time, from a reliability and performance perspective,” he says. “We are manufacturer agnostic and even now the challenge is how do we get enough electric vans on a short enough lead time? If we have a choice we will choose some of the more reliable brands but if not we will still go with Maxus.”

While Thomas would “never say never” when it comes to electric cargo bikes, he argues they only work well in “very specific circumstances” in dense conurbations such as the centre of London. “We want to cover the whole of the M25 so they just don’t make sense at the moment,” he says.

Packages are collected from customers’ shops or warehouses – some run by third-party storage companies – and sorted at Packfleet’s Bermondsey hub for next-day delivery.

“The location was chosen because we needed somewhere that had good industrial space available to rent that was relatively close to central London,” says Thomas. “When we started we only covered the inner boroughs of London. When you narrow it down there are relatively few options and we ended up under a railway arch.”

Powering up

Around half of Packfleet’s vans are charged at or near the existing depot, while the rest are charged at the drivers’ homes or using public charge points. The electricity connection at the existing depot proved adequate for its initial requirements but charging capacity will be an issue as the company looks to grow.

“We are about to move to a 20,000sq ft facility and that is one of the things we are looking at,” says Thomas. “We now charge around 10 vans here and rent space in a multi-storey car park to charge the rest. In our new space, which is close to here, we should be able to charge 40 or 50 vans once we have beefed up that connection.”

The company uses Pod Point chargers to recharge the vans overnight as they arrive back at the depot and get plugged in between 6pm and 10pm. “In the new place we will have 7kW slow chargers to charge most ➜ 22 of the vans overnight and a couple of 90kW fast chargers to charge those vans on double shifts for an hour while they are loaded,” says Thomas. “We looked at load balancing but we need the vans out on the road as much as possible so we can’t be too clever with that.”

The typical delivery route is between 30 and 50 miles so even in winter, when the vans’ range can drop from the usual 100 or 120 miles to 80 miles with a 52.5kWh battery, that is more than enough.

“That is plenty for one route and sometimes we can do two routes with them,” says Thomas. “Range is important because it means we are not spending time charging in between shifts but larger batteries can affect payload. When we are going to collect from the merchants and we fill the vans to the brim that starts to become an issue.

“If someone could make a long-range van with massive payload that would be the one we would go for.”

Saving graces

The vans are charged with renewable electricity when at the depot and, despite recent energy price rises, Thomas says electricity is still much cheaper than diesel. Coupled with lower maintenance he believes this makes the electric van fleet cheaper to run than diesel.

This, together with the high drop-density in its London patch, helps offset some of the other higher costs in Packfleet’s operating model and enables it to be competitive on its delivery rates and win business from the leading national B2C carriers.

“We are not a premium delivery service,” says Thomas. “There are white glove deliveries that are two or three times the price. But we are not competing at the bottom of the market either. Our merchants are generally shipping goods worth over £30 but less than £250. That bracket is our sweet spot.”

Thomas is not worried about the recession widely forecast for 2023 – e-commerce is such a huge market that he does not believe it will affect Packfleet. “We are a relatively new player and the pie is massive still,” he says. “E-commerce deliveries could halve overnight and it would still be a huge market. We are talking to merchants about how we can keep costs down and make sure they are not losing their customers.”

On the horizon

The M25 encircles over 10 million people so that is a large market to go after, and Packfleet’s immediate future is to grow its business in and around the capital. But, as well as relocating to a larger depot and looking at a second London hub north of the Thames, expansion to other large cities is on the horizon.

The Growing Circular Economy Of Returns

The rise and rise of online shopping during the pandemic brought with it a growing problem of how to handle returns. It is now standard practice for many shoppers to order a garment in three or four different sizes and colours and only keep one, so handling returns to get the most value from them as quickly as possible is a key part of Packfleet’s offer.

“We started Packfleet Circular six months ago and we have a few merchants using it,” says Thomas. “There is significant and growing interest in how to do it as it is a multi-faceted issue involving packaging, delivery and collection. It takes a lot of work as they often have to change their operational model but it will become bigger and bigger over time.”

Most retailers expect customers wanting to return items to take them to a Post Office or parcel shop, but Packfleet will collect from the delivery address.

Packfleet Circular offers more than just collecting returned items – it also includes reusable packaging that can be returned and reused, whether or not the product itself is being returned.

“It depends what the merchant wants to do,” says Thomas. “For one of our merchants doing ambient groceries we deliver in boxes and crates and then next time we deliver we collect the empties and return them to the merchant, which washes and reuses them. We are doing something similar for a brewery which uses reusable glass bottles.”

“Once we run out of space in our new south-east London location, rather than going to a bigger one we will open a north-west depot, probably around Wembley or somewhere like that,” says Thomas. “Later this year we are also looking to expand in other high-population areas. These could include Manchester and Birmingham, and the advantage there is that major retailers tend to have warehousing in that strip up the middle of the UK. Being based close to them will save us a lot of time in terms of trunking so we will get two benefits.”

Like many in the home delivery market Thomas has strong views on Amazon, which he says is neither a competitor nor a customer – at the moment.

“We want to offer independent retailers a delivery service that enables them to compete with Amazon,” he says. “I don’t want to live in a world where the only place you can buy things online is Amazon. Offering merchants big or small a fast, high-quality delivery that otherwise is only available from Amazon is really important.”

MIX AND MATCH:

Packfleet’s fully electric fleet of over 50 vans is made up of a variety of makes, with around half coming from Maxus

Packfleet has backing from three venture capital investors, but the founders won’t be cashing out to repay their backers. “The goal is to grow sustainably but quickly to build a large-scale business,” says Thomas. “That means building an independent business that competes with the big boys; selling is definitely not on the cards.” n