More than 30 small and medium-sized freight operators in Victoria will test lower-emission vehicles and infrastructure as the sector works through the cost and operational challenges of decarbonising freight.
The Victorian Government has announced recipients of its $8 million Freight Decarbonisation Co-Investment Program, covering projects involving electric freight vehicles, charging infrastructure and other emissions-reduction technologies.
Individual grants of up to $300,000 are available, with participating businesses required to contribute at least $1 for every $5 provided through the program.
Beyond introducing individual vehicles or equipment, the projects provide an opportunity to examine a broader supply chain question: how can freight operators reduce emissions while maintaining service reliability and controlling costs?
For smaller operators in particular, the answer depends on more than vehicle technology.
Decarbonisation changes the investment equation
Purchasing a lower-emission vehicle can require investment beyond the vehicle itself.
Operators may need depot charging or refuelling infrastructure, electrical upgrades and changes to how vehicles are scheduled and utilised.
They also need to consider range, payload and whether available equipment is suitable for the freight task.
The Victorian program targets businesses with up to 200 employees involved in moving freight by road or rail.
Eligible projects include purchasing or leasing low- or zero-emission freight vehicles, installing charging or refuelling infrastructure, modifying vehicles for specialised freight tasks and trialling alternative fuels or other emissions-reduction technologies.
For smaller fleets, these decisions can carry greater financial consequences because businesses may have less capacity to spread infrastructure costs across large numbers of vehicles.
The freight task determines the technology
Not every freight operation presents the same opportunity for decarbonisation.
Among the program recipients, Foodbank Victoria will receive $205,000 towards replacing an ageing diesel truck with its first battery-electric truck for metropolitan food collection and distribution.
The project illustrates one potential use case for electrification: vehicles operating predictable metropolitan routes and regularly returning to a depot.
Return-to-base operations can allow businesses to plan charging around established schedules rather than relying entirely on public charging infrastructure.
Long-distance and heavier freight tasks can present a different equation, particularly where range, payload and charging or refuelling availability become more significant constraints.
This means operators need to match technology with the freight task rather than assuming a single solution can be applied across an entire fleet.
Charging becomes part of freight operations
Moving from diesel to electric vehicles also changes the role of the depot.
Businesses need to determine when vehicles will charge, how charging fits around delivery schedules and whether sufficient electricity capacity is available at the site.
Existing electrical infrastructure may require upgrades before multiple vehicles can be introduced.
Charging therefore becomes part of freight planning rather than simply an energy consideration.
A vehicle that spends too long charging during periods when it would normally be operating can affect utilisation and potentially require additional fleet capacity.
Conversely, an operation with predictable dwell periods may be able to integrate charging with less disruption.
Depot location, vehicle schedules and electricity infrastructure can therefore influence the commercial case for electrification alongside the cost of the vehicle itself.
Whole-of-life costs matter
Purchase price provides only part of the investment equation.
Operators also need to consider energy, maintenance, charging or refuelling infrastructure and vehicle utilisation when comparing lower-emission technologies with conventional equipment.
A more expensive vehicle could potentially deliver lower operating costs over its life, but that outcome depends on how the asset is used and the supporting infrastructure required.
The Victorian program is intended partly to generate practical information about these barriers and opportunities.
Operational experience from participating businesses could help clarify where lower-emission technologies are already commercially practical and where infrastructure, cost or technology gaps remain.
That evidence may be particularly useful for smaller operators with limited capacity to trial unfamiliar equipment independently.
Freight demand adds to the challenge
Victoria currently moves about 440 million tonnes of freight annually, with volumes projected to reach 908 million tonnes by 2050–51.
If freight demand continues to increase, reducing transport emissions will need to occur alongside maintaining or expanding the capacity of the network.
That creates a difficult balance.
Operators need technologies that reduce emissions without creating unacceptable compromises in payload, vehicle availability, delivery reliability or operating cost.
Battery-electric vehicles may suit some metropolitan and return-to-base operations, while longer-distance and heavier freight tasks may require different technologies or approaches.
Alternative fuels, greater use of rail and improvements in operational efficiency can also form part of the broader transition.
Decarbonisation has to work operationally
For freight businesses, adopting cleaner technology ultimately depends on whether it can perform the required task at an acceptable cost.
That makes decarbonisation both an environmental and an operational challenge.
Government support can reduce some of the initial investment barrier, but operators still need to understand what happens once vehicles enter everyday service: how they affect utilisation, where they charge or refuel, what infrastructure they require and how their whole-of-life costs compare.
The Victorian projects could provide practical evidence on those questions.
As freight volumes increase, the challenge will not simply be introducing more lower-emission vehicles. It will be finding decarbonisation pathways that allow freight operators to reduce emissions while maintaining the cost, capacity and reliability their customers and supply chains require.
Yvette is a Content Producer at Akolade, producing stories for Supply Chain Channel, an Australian learning ecosystem created to address the need for information, networking, case studies, and empowerment for everyone in the supply chain sector.
