DHL has signed an exclusive, three-year contract with Renault to handle the distribution of replacement lithium-ion batteries in Europe. The service, which begins September 1st to coincide with the rollout of Renault’s electric vehicle range, will see DHL carry out logistics, including the storage and transport of batteries between a central warehouse in France to dealers and repair centres in selected markets.
The contract is an early example of the types of specific logistics services that the introduction of electric vehicles could require, and some that DHL’s CEO for Mainland Europe, Dan Ellerton, believes could set a new industry standard.
“Logistics are essential for the successful launch of electric vehicles to the mass market, and the solution we have developed for Renault will provide a reliable and efficient way to organise aftermarket logistics for batteries, thus setting a new industry standard,” he said.
Renault, along with Alliance partner Nissan, will offer electric vehicles with the batteries leased each month for a monthly fee, which includes service and replacement. DHL is responsible for this aftermarket movement–for Renault only–with an offering that is at once unique in certain regulatory and equipment features, but which will also be integrated into its current network in Europe.
The batteries will be stored in a central DHL warehouse in Bonneuil, near to Paris, and will be distributed by road to countries where the vehicles are being launched, including the Fluence ZE passenger car and the Kangoo ZE light commercial vehicle (pictured) this year, and the Zoe and Twizy small city cars next year. DHL will also be responsible for moving return and replacement batteries between Renault repair centres and dealers.
“In this particular business model, the client will rent the battery reparable in Renault dealerships. Our contract with DHL is one of the key elements to ensure that replacement batteries are available for customers–a key quality point that Renault commits to offer to all electric vehicle buyers,” said Renault’s Jacques Daniel, after-sales director, in a prepared statement.
A DHL control tower specialised in automotive in the Dutch city of Veghel will oversee the transport movements, order management and exception management of the operations.
Electric battery logistics R&D
While the logistical elements of the operation are relatively straightforward, the movement of the lithium-ion batteries presented several issues that DHL and Renault needed to address and adapt to. According to Pascal Kemps, global strategy director for automotive at DHL Global Customer Solutions (a strategic research and service development division of DHL), the batteries fall under dangerous goods classification in the EU as ADR Class 9, which demands certain safety requirements and restrictions. For example, the batteries cannot be transported by air and they need to be shipped in compliant packaging. The batteries are also heavy (between 112kg-335kg) and are a non-standard size for pallets.
While Kemps said that the batteries will be combined with general freight in DHL’s network and will not have dedicated trucks or deliveries, all of the trucks and terminals used to ship them need to be equipped to ADR specifications, while all drivers and terminal staff also need special training. Furthermore, all of the trucks must have tail lifts to be able to load and unload the batteries.
Kemps said that DHL commissioned a Belgian university to do a study on logistic and on batteries, which has informed its operations and its training for staff and drivers. “By being involved early in this new technology, we now have a much better understanding of the requirements and it could open up the potential for more services,” he said.
The current launch countries cover mostly Western Europe, but Kemps said that DHL would follow Renault as it introduces its EVs to new markets.  
Neither Renault nor DHL would comment on the expected freight volumes that the current contract involves, however Reinhard Zirpel, senior vice president for communications at Renault Germany, pointed out that by 2013 the Renault Nissan Alliance will have capacity to build 500,000 batteries and electric vehicles a year in Europe and that by 2020 it expected the electric vehicle market to have a 10% market share.
Electric potential
For now, the scope of the cooperation is limited mainly to storage and transport, as DHL receives the batteries from Renault in ADR-compliant packaging and it will not take any measures to test, charge or maintain the battery itself. But according to DHL’s Fathi Tlatli, senior vice president global sector automotive and aerospace at DHL Global Customer Solutions, there could be scope in the future for more specific services including the co-development of specialised packaging. “There could also be a potential market for providers like DHL to be involved in the recycling of batteries,” he said. 
While this contract covers only the aftermarket distribution of batteries for Renault, other services that both Renault and Nissan will require include logistics for the batteries inbound to assembly plants. The Alliance will be building the lithium-ion packs in Europe at plants in the UK, Portugal, Turkey and France. Kemps would not specify whether DHL was in play for that business but he indicated that it would be a service that DHL would be well placed to do given its Pan-European network.
Speaking at the Automotive News Europe Congress in Cologne, Nissan’s vice president for product strategy and planning, Pierre Loing, revealed more about the complex supply chain of the battery itself. While Japan’s NEC builds and sources the raw material and the cell, a Nissan-NEC joint venture builds the modules. A compact lithium-ion battery, which weighs around 250kg, has 48 modules, according to Loing.
Nissan’s battery plants then assembly the lithium-ion pack and also handling the packaging of the battery, before they are shipped to Renault and Nissan factories.
DHL as customer as well
As part of the agreement, DHL will also purchase eight of the Renault Kangoo ZE to join a fleet of 12 that the company is currently trialling in the Rhine-Ruhr area of Germany, along with several other electric vans and trucks. According to Michael Lohmeier, senior expert for DHL’s GoGreen programme, while the payload for electric commercial vehicles is often worse than for traditional combustion engines, the Kangoo has the same payload, a major advantage for a logistics company. He said its range of around 90km would be sufficient for parcel vans, most of which usually only transport goods 40-50km per day.
“The van could specifically have application for the distribution of automotive spare parts, which are often delivered in high frequency from regional hubs,” Lohmeier said, although such vans would evidently not be suitable for moving the lithium-ion batteries themselves because of the necessary lifts and ADR requirements.