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Contract hire – The ideal route to electric refuse collection fleets?

Local Authority vehicle and workshop partner Specialist Fleet Services Ltd (SFS) recently announced that it is to become the first company to provide a fleet of Dennis Eagle electric refuse collection vehicles (eRCV) on contract hire. The three new eCollect 26t refuse trucks are to be delivered to Exeter City Council in June this year as the next phase of the fleet modernisation programme SFS is contracted to provide.

Bob Sweetland, Managing Director, SFS said: “We are proud to be the first contract hire company to install a fleet of eCollect refuse vehicles in the UK. This is an important step in the decarbonisation of Exeter’s fleet, and we are confident that the new vehicles will be well received by crews and residents.”

Cllr David Harvey, Exeter City Council’s former Lead Councillor for City Management, said: “The introduction of three brand new electric refuse collection vehicles into our fleet is fantastic news for Exeter and its residents. The vehicles are clean and quiet and are a vital step on our journey towards a carbon neutral City. When it is complete the new solar array at Water Lane will supply power to the vehicles further reducing the carbon impact. Over 20% of the City Council’s vehicles are now electrically powered and this is the vital next step on delivering a 100% carbon neutral fleet.”

SFS has undoubtedly set a precedent with Exeter’s fleet and the project is a fantastic example of what can be achieved when the public and private sector works hand in hand to deliver fleet solutions, but is this model repeatable?

Until recently most councils have only considered accessing eRCV technology through outright purchase. However, with unit prices in the region of £400,000-£450,000 (compared with £180,000 for a diesel powered equivalent) and restricted capital budgets, the cost difference has made them unattainable to many and this has undoubtedly slowed implementation. Contract Hire provides a different way to approach this challenge.
Furthermore, as Bob explains:

“With the technology in its relative infancy we have as of yet, no data on used eRCV sale values and are refining our modelling of the optimal operational life of the vehicles. It would be fair to say that the industry also remains uncertain regarding the longevity and end of life solutions for key components such as motors and batteries for this application.

“Under the Outright Purchase approach, Local Authorities need to develop their own views on the risks each of these complex factors presents whilst continuing to deliver front line statutory services. As a specialist vehicle provider with almost 30 years’ experience of Local Authority fleets across the UK, we however, have specialist teams who have used their breadth of knowledge, experience, and problem-solving ability to develop fundable solutions.

“The contract hire option enables councils to implement the technology without these risks. We take all the responsibility for maintaining the vehicles and disposing of them or replacing them when they reach end of life. The customer has budget certainty and can develop simpler business cases focused on highlighting the decarbonisation benefits of eRCV adoption.

“Whilst confidence in eRCVs is developing and Contract Hire provides an effective acquisition solution, the principal challenge to universal implementation remains supporting infrastructure. On this point, Bob added: “We are investing a significant amount of time and resources into making sure our customers are fully prepared and supported for the transition to electric. Our team are already assisting customers with this process; helping them to establish the correct charging infrastructure, planning and implementing staff training, reconfiguring workshops, investing in new equipment, and putting new operational procedures in place.

“Inevitably more and more clients will follow Exeter’s example and in 2-3 years’ time there will be even more choice in terms of vehicle technology and charging options. Our role is to ensure that our team continue to monitor these developments closely and present to the market innovative Contract Hire solutions which facilitate the transition to a nett Carbon Zero operating model.”

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As featured in Essential Fleet Manager Issue 4 – click here to read more

EFM issue 4



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