JLR alternative fuels, digital tools and close supplier collaboration

Levent Yuksel may be freight operations director at JLR, but his passion for decarbonisation makes him an expert in sustainability too. With almost 12 years of experience at JLR, Yuksel is pushing the group’s logistics division to find efficiencies in operations that allow decarbonisation to also be a priority.

Yuksel views collaboration as the simplest way to do this. Through working with logistics providers and suppliers, as well as regional authorities and energy providers, he sees a way that logistics partners can work together creatively to create more sustainable flows across automotive logistics.

The freight director previously spoke to Automotive Logistics about measuring and setting decarbonisation targets last year. Since then, JLR has made progress in implementing new sustainability strategies across its operations, but the carmaker, like the rest of the automotive industry, has also faced new challenges and disruptions in its supply chain that threaten sustainability endeavours. With tariffs, compliance changes, and geopolitical events reshaping supply chain flows, it is getting more difficult to keep sustainability at front of mind. But Yuksel has been working behind the scenes to reprioritise sustainability.

Creating and maintaining sustainable inbound and FVL flows

JLR has been focusing on decarbonising its inbound and outbound FVL flows, but these have been in more flux than normal in the past year.

With inbound flows of parts to manufacturing facilities, there is often more use of trucks on roads compared to other transport modes. This means more diesel dependency and higher carbon emissions, making it a critical area of importance for Yuksel and JLR’s decarbonisation efforts.

“In the UK, we operate with a dedicated fleet which constitutes around 225 tractor units and twice as many trailers operating day in, day out,” he says. “Now, we have moved the whole fleet away from diesel.”

Yuksel said that, aside from two electric trucks, the whole fleet now runs on alternative fuels, with more than half using hydrotreated vegetable oil (HVO) and the remainder running on bio-compressed natural gas (bio-CNG) and bio-liquefied natural gas (bio-LNG).

To decide which trucks run on which alternative fuel, Yuksel and the JLR team are route-tracking and looking at which infrastructures are available on which flows.

“We are making the informed decision about which routes, which flows and which frequencies to pick the right fuel methodology,” Yuksel says. “Of course, while we are choosing these, we are looking at where we have the network to refuel.”

In outbound flows, Yuksel says its drivers are also moving in the direction of HVO, which he says is the easiest alternative fuel transition.

Finding efficiencies to fund sustainability

Transitioning whole fleets away from diesel trucks is expensive, but the costs don’t stop once the fleet has been upgraded. With the cost of alternative fuel much higher than fossil fuels (HVO is usually 10 to 15% more expensive), JLR is having to find ways to ensure that the OEM and its smaller providers and subcontractors can afford the sustainable transition through finding efficiencies elsewhere.

“When we do the right business planning, we generate efficiencies which reduce fuel dependency because we run less miles, reducing the number of units we operate on a route,” Yuksel explains. “When we optimise the route like this, then we get some pay off of some kind, which provides a balancing factor for us.”

He said that JLR is working with its main logistics providers to create economies of scale using alternative fuels.

“We have a lot of capacity, so we can fill tanks and bunkers with alternative fuel which generates an economy of scale which then closes the gap between the cost of diesel and HVO,” he said. “These enablers generate a business case. Sometimes we lose and sometimes we win, but there’s a balancing effect.”

The OEM is also getting involved in planning early with its partners, collaborating to find creative efficiencies. “Some of the partners do their own investments for alternative fuels and then we work with them, to enable them to operate with alternative fuels and reduce emissions,” he says. “We also take the responsibility to collaborate with them where and how we can, to be more supportive in enabling them to use alternative fuels.”

Alternative fuels versus EV trucks

Although refuelling alternative fuels costs more than recharging an electric truck, there is a bigger headwind in investing in the actual electric truck, costing two to three times more than a diesel truck. Of course, the load factor of an electric truck also needs to be considered, as the battery weighs more and means a smaller load can be fitted onto each truck, increasing the number of trucks required which in turn drives up cost and carbon emissions. And the infrastructure cost to enable electric charging can be much higher, especially on routes where there are scare charging stations.

Yuksel weighs everything up by starting at JLR’s “centre of gravity” and working outwards in flows from there. The centre of gravity is found by calculating the location or facility that provides the lowest total transport costs based on its proximity to key trade routes, logistics infrastructure, and other JLR facilities, dealerships and customers.

“Looking at our centre of gravity, in reality we don’t have the main grid power to use BEV trucks,” Yuksel says. “If I wanted to convert all my units to BEVs I wouldn’t be able to run them or charge them, because the grid power is not there. This is something bigger than us and there’s a dependency on the local state and authorities that have the funding.”

Yuksel is not writing off BEV trucks though, and is inviting BEV equipment manufacturers to the table to look at collaborating to make these units more available with less initial investment burden, for example through long-term agreements reducing the initial financial burden while strengthening the partnership.

How the threat of tariffs complicates decarbonisation strategies

The threat and introduction of tariffs by the US government this year has caused supply chain chaos across the world, with huge implications for the automotive industry due to vehicle and parts tariffs, as well as ‘reciprocal’ tariffs affecting trade lanes between nations.

Despite being headquartered on the other side of the Atlantic in Coventry, JLR was not immune to the impacts of the US tariffs. Within the space of a month, JLR paused and restarted its US shipments while it got to grips with the threat of 25% tariffs on imports of finished vehicles brought in by US president Donald Trump in April. In May, a deal struck between the US and UK bringing vehicle import tariffs down to 10% allowed shipments by JLR to restart, but even a month-long change in flows can cause huge disruption.

“Before the tariffs, we were operating in an ecosystem which was balancing itself. For logistics operators, the balance of flows across the globe means a lot,” Yuksel says. “That can generate efficiencies which can bring fewer emissions and better investment. But when there is tariff confusion, there is a distraction to this ecosystem.”

Giving an example, Yuksel said the ongoing crisis in the Red Sea has caused an imbalance in the ecosystem of automotive logistics, as the industry has been forced to take longer routes around the Cape of Good Hope which has increased pollution from deep-sea vessels.

The tariffs similarly influence this balance. “Any influence of uncertainty is a distracting factor, as less predictable flows mean more risk of unbalanced flows, which can bring volatility to service providers who will then be more careful about where they operate and how frequently they operate,” he says. “This all distracts the whole balance of the ecosystem operating in the logistics world globally, because the balance is very delicate.”

To navigate this, JLR is falling back onto its tried and tested way to remain resilient – through communication and partnership. “We have been affected in this ambiguity, but what we have done is we have been in very close contact with our service providers who have been very open and honest, and so have we,” Yuksel says. “We are still navigating how to make sure that we maintain our commitments to service providers and also still operate a meaningful route while meeting the expectations of our customers. However, this has caused three or four times more effort for us and our service providers to predict the unpredictable and navigate in the face of this ambiguity. But I think the more we progress and the more we understand, we develop our ways of working and help each other in these difficult times. It’s more important than ever to cooperate with our providers and to be open, honest and transparent.”

Yuksel says that digital tools have helped the OEM in this. “Since 2020, we have come to terms with the fact that there is no normal anymore. We are operating with our eyes open and our antennas out,” he says. “We have digital tools like some predictive analysis software and early warning tools to tell us about a geographical or climate event, strikes, new regulations or laws or taxations, and on the other hand, with our key service providers, we operate a control tower to understand all that’s going on around us. Within those control towers we establish a good network of communication.”

He adds: “With the help of digital tools, with the intelligence, we can understand that the supply chain is a living thing, a creature that needs to be watched carefully all the time. But I think we have developed that level of resilience, agility and flexibility through our network to cope with it.”

Using digital tools to boost sustainability and efficiency in fluctuating markets

These digital tools are being used at JLR to also measure supply and demand across markets and logistics flows. Yuksel says that having full visibility of the OEM’s network and its changing dynamics means the team can quickly reconfigure densities and routes of flows. “Then, instead of running half-full trailers, we can reconfigure and assess whether we could use something like cross-docks or a milk run, and see if that will open up efficiencies and decarbonisation potential,” he explains.

“Our first duty is to ensure that the network that we are operating is efficient, and that we are covering the minimum miles with maximum load factor. That’s the core basic of our operating model. As soon as we achieve that, then it is overlaid with alternative fuel options,” he adds.

“It’s a big collaborative activity, there is not one single player in this, it’s a team, and as long as we all believe in this and work collaboratively, we can find creative ways to approach it,” he says.

He says JLR is talking with logistics and energy suppliers to find or create some corridors where they can work collaboratively to optimise loads and invest in charging infrastructure for electric trucks.

“We are trying not to be restrictive, as very hard borderlines become a difficult mountain to climb,” Yuksel says, referring to choosing between alternative fuels and electric trucks. “What we are saying is that we want to decarbonise flows, and to achieve this we are looking at alternative ways, including looking at whether there is any part of our flows that could run with full electricity.”

Once a corridor where this could be possible is identified, JLR and its partners look at whether a first leg and last leg approach using alternative fuels could optimise it even further.

Improving alternative refuelling points and infrastructure

The carmaker is also working with local authorities and energy providers to help improve the accessibility of alternative fuels and refuelling stations.

“For example, we recently had the conversation with Milence, who are very strong in Europe and shared with us their strong interest in coming to the UK,” he says.

Milence, which was established in July 2022 as a joint venture between Daimler Truck, the Traton Group and the Volvo Group, has committed to building and operating 1,700 high-performance public charging points in Europe by 2027.

The company has now opened its first UK charging hub in Immingham, providing eight charging bays for EV trucks, and plans to open another four charging bays at a new hub in Aylesford by the end of this year.

“Now, we are talking about sharing our centre of gravity for our flows, so we can work with Milence on a recharging or refuelling hub for our providers that can enable the flows to be conducted by sustainable fuels,” Yuksel says.

He adds: “We are trying to be creative and open-minded, we’re trying to be collaborative to do something differently which will work for everybody, because whenever we win, our providers win, the community wins, and the planet wins.”