Logistics Optimization

TCO (Total Cost of Ownership) optimization is a process that involves identifying and minimizing the total costs associated with owning and operating an asset, system, or process. This includes all direct and indirect costs incurred over the asset's entire lifecycle, such as acquisition costs, maintenance and repair costs, energy and utility costs, and disposal costs. TCO optimization aims to reduce overall costs while maximizing the asset's efficiency and effectiveness. TCO optimization tools are software programs that help organizations identify and analyze the costs associated with owning and operating assets. These tools allow organizations to calculate the total cost of ownership over an asset's lifecycle, evaluate different scenarios, and make data-driven decisions about asset management. TCO optimization tools are commonly used in industries such as manufacturing, transportation, and IT to improve operational efficiency, reduce costs, and enhance asset performance.

In addition to vehicle and infrastructure Capex and Opex, it's critical to look at the reduced range of the vehicles and their impact on routing and labor costs dynamically throughout various time periods. This can be done by combining dynamic route optimization and network planning with TCO inputs and performing higher level optimizations to reach suggestions for where and when ZEVs can be substituted into the network. In this article, we'll be ignoring some of the other TCO components which are well covered in articles like this one from 7Gen and this great Youtube video. And to learn more about the opportunities and challenges of Class 8 ZEV transitions, check out this article by Logisyn Advisors. For more info, please visit: TCO Optimisation

According to the North American Council for Freight Efficiency (NACFE), the Total Cost of Ownership (TCO) components of a Class 8 Battery Electric Vehicle (BEV) are, from highest to lowest: Labor, Vehicle cost, Fuel, Taxes and fees, maintenance and repair, insurance, payload, and financing. This makes sense. But many TCO calculators and consultants don't account for the labor component accurately, as it is signifcantly related to delivery network design and vehicle routing. In many instances we see that they use averages or historical telematics data that are deeply flawed as inputs to what the real customer-driven fleet requirements are throughout the course of a year. For example, if you have to cover 10,000mi of deliveres from a DC and that would require 10 x 1,000mi rig routes, swapping in 5 BEVs with only a 500 mi range means you need more break and charging time, and potentially more driver shifts. So 10 full time driver shifts in diesel trucks could now be 12 or even 15 driv