In a compelling presentation on the last day of TruckShowX, Alex Kelly from IKEA highlighted the company’s ambitious journey towards achieving a 100% zero-emission delivery fleet by 2025.
Setting ambitious targets
Kelly emphasised the significance of setting clear targets to drive progress. “The importance of a target is really fundamental to how we managed to achieve where we’re up to. It’s driven ambition, so it’s created a focal point for everyone within our ecosystem to all work towards,” she noted.
IKEA’s zero-emission delivery target is a part of their broader sustainability goals, which include commitments to circularity and climate positivity. By setting these ambitious goals, IKEA has created a guiding light for its entire delivery ecosystem.
Early adoption and scaling up
IKEA began its journey towards electric deliveries in 2019, becoming the first home furnishing retailer in Australia to introduce electric vehicles (EVs) into its delivery service. Kelly highlighted, “We introduced our first electric vehicle into the delivery service in 2019, and we’ve subsequently introduced 51 vehicles into the fleet nationally.” This fleet includes a mix of vans and trucks, reflecting the diverse needs of their delivery operations.
The early adoption of EVs has paved the way for exponential growth. “We’re currently at 40% zero-emission deliveries in Australia. When I started in September 2022, we were at 5%,” Kelly shared. This remarkable progress has been driven by a shift in the market, with increased vehicle availability and better financing solutions.
Overcoming charging infrastructure challenges
One of the most significant challenges IKEA has faced is the development of charging infrastructure. Kelly explained, “The accessibility to charging has become the bottleneck.” IKEA has tackled this issue by investing in dedicated charging infrastructure at its stores, providing AC and DC chargers. This investment not only supports their delivery partners but also ensures that they can meet their ambitious targets.
Kelly elaborated on the infrastructure challenges, stating, “The delivery partners don’t have space at their depots, and we’ve got space. We’ve also got a reason to make an investment because we know that this is a partnership, and we want to secure this goal with our partners.” By providing charging infrastructure, IKEA is addressing a critical barrier to the widespread adoption of EVs in their delivery fleet.
Supporting subcontractors
A unique aspect of IKEA’s delivery model is the use of subcontractors, which presents its own set of challenges. “The delivery ecosystem is not necessarily where IKEA owns its vehicles,” Kelly noted. Instead, the company relies on a network of subcontractors, many of whom are individual operators. This decentralised model requires a different approach to supporting the transition to electric vehicles.
Kelly highlighted the need for targeted support for these individuals, saying, “We need to identify that it is these individuals that need support as well. It’s not just targeting big fleets; it’s targeting the local opportunity and the people that do have one truck but fulfill a lot of the delivery needs.” To this end, IKEA is working on financing and leasing opportunities to make EVs more accessible to subcontractors.
Collaboration and executive buy-In
The journey towards 100% electric delivery has been a collaborative effort. Kelly emphasised the importance of partnership, stating, “We make sure that the whole process with our partners is collaborative.” Regular meetings and open communication ensure that any issues, such as vehicle downtime, are promptly addressed.
Executive buy-in has also been crucial. “One of the key things that we do quite well as a business is get executive buy-in into the target very early on,” Kelly explained. This commitment from top management has driven the success of IKEA’s sustainability initiatives and ensured that all departments are aligned with the company’s goals.
Looking ahead
Despite the progress made, Kelly acknowledges that there is still work to be done. “We’re not there yet, but the actions we’re taking in the next 6, 12, and 18 months will get us very close to where we want to be,” she said. IKEA’s focus on investing in charging infrastructure, supporting subcontractors, and maintaining strong partnerships will be key to achieving their 2025 target.
In conclusion, IKEA’s journey towards a 100% electric delivery fleet is a testament to the power of clear targets, collaboration, and executive commitment. By addressing challenges head-on and supporting all stakeholders in the delivery ecosystem, IKEA is leading by example in the transition to sustainable logistics. As Kelly optimistically concluded, “Hopefully we come back to you with a very good update on that goal next year.”
