Planning a mixed fleet of electric and conventional vehicles for urban freight with routing and replacement considerations

The rapid development of electric vehicle technologies can be seen as an opportunity to achieve sustainability for last mile distribution inside cities. Effective management of electric vehicles in freight operations along with efficient cost planning throughout their lifecycle are expected to increase their adoption rate in urban freight. A common practice for fleet mixed decisions is to use techniques that have been developed for managing conventional vehicles. These techniques may fall short in managing fleets with electric vehicles effectively, due to additional constraints induced by specific characteristics of electric vehicles, such as limited driving range and battery charging. Moreover, the routing decisions determine the operational characteristics of the fleet, which is an important constraint in fleet composition decisions. In this paper, we propose a novel integrated model to consider both routing and fleet composition decisions for using electric vehicles in urban freight distribution. We first optimize the routes for freight deliveries to minimize the operational cost for different fleet compositions of electric and conventional vehicles. Then we feed the results into a replacement model to find the best fleet mix policy. Our results show that efficient planning of electric vehicle usage in urban operations can increase their presence compared to conventional vehicles.