A move by Walmart to acquire Tesla semis should make merchandise distribution more economical for the retailing giant, reducing both carbon output and fuel cost fluctuations. Walmart is now a major grocery distributor on the Canadian scene, with its 410 stores taking 10 per cent of market share, according to a 2017 BMO report.
After its initial order for 10 of the electric semis last November, Walmart recently requested 30 more. The fleet of 40 will be split equally between the Mississauga, Ont. distribution centre and a Surrey B.C. location, set to open in 2022.The B.C. base will have the company’s first fully electric fleet in the world.
Other Canadian companies that have pre-ordered the $232,000 electric trucks include Toronto trucking firm Fortigo Freight and Loblaw Companies Ltd.
“A move from diesel to electric semis would take a lot of the uncertainty out of trucking costs,” says Jennifer Morris of Two Roads Logistics, a Toronto-based Canadian shipping company. “And that means the bottom line can be more accurately predicted, which is always good for business.”
According to a 2016 Cornell University study,U.S. produce wholesalers estimate that transportation costs account for approximately 19 per cent of the value of goods sold. For retailers/grocery wholesalers, that cost rose to more than 26 per cent.
It’s likely that Walmart will start with non-perishable, low-value goods as they move to the new Tesla semis, Morris says. That way, the kinks can be worked out before high-value, perishable products such as fruits and vegetables are shipped.
Walmart’s latest order means the retailer will have the largest Tesla fleet in Canada, once they are delivered over the next five years. Its initial goal is to electrify 20 per cent of its fleet by 2022, and power its entire fleet with alternative fuels by 2028. The rigs will also have the potential of eventually being switched to autonomous operation.