Our New Future
Our New Future

As city centers become more congested, one CEO has a solution

Key Points
  • As city centers become more "clogged" with delivery vehicles, An Post CEO David McRedmond said governments may legislate for them to be electric.
  • "If the pandemic has taught us anything, it's taught us that that global impacts really do matter ... We're not bigger than our planet," McRedmond added.
  • An Post delivered 14 million parcels in December, double the number for the same month the year before, and 30% of its fleet are electric vehicles.
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The pandemic has made companies realize they have social obligations

LONDON — An increase in city center traffic may cause issues for governments as they try to meet sustainability goals, according to the CEO of Irish postal company An Post.

David McRedmond told CNBC that congestion caused by delivery trucks in particular could see lawmakers legislate for these vehicles to be electric.

"It does raise an issue for governments … because what's going to happen in city centers is they're going to get very clogged, as you have a whole load of delivery companies competing with each other … Firstly, they're going to have to apply standards, which says (trucks) should be electric, and secondly, there's probably likely to be a consolidation," he said on Monday.

The outbreak of the coronavirus pandemic has focused minds on green issues, he added. "If the pandemic has taught us anything, it's taught us that global impacts really do matter. We're not bigger than the globe, we're not bigger than our planet … So I've no doubt that there will be an acceleration of the sustainable development goals."

Some cities have introduced rules around traffic pollution, with central London introducing an Ultra Low Emissions Zone (ULEZ) in 2019. Larger vehicles such as trucks have to meet set emissions standards or pay £100 ($137) per day to drive into the zone.

An Post — which is state-owned — aims to be carbon neutral by 2030 and all of the vehicles it operates in Irish cities are electric, McRedmond said. Transport makes up "by far the largest" of its emissions, he added, and electric vehicles (EVs) currently make up 30% of the company's fleet. But EVs can currently only drive a short distance before they need charging and McRedmond said the technology would "catch up" to allow for longer journeys. Packaging and waste were likely to be a challenge too, he said.

E-commerce deliveries have risen during the pandemic as people bought goods from home during lockdowns, and while McRedmond sees this trend flattening as brick-and-mortar retailers open up again, online shopping reflects a "structural shift." "The numbers we're seeing now, in terms of parcel growth, are the numbers we would have expected in 2023 or 2024 without a pandemic," he said. An Post delivered 14 million parcels in December, double the number for the same month the year before.

As well as environmental obligations, companies also have social obligations, according to McRedmond, and these have been accelerated by the pandemic. "We are moving into a world that's probably a slightly better world where companies, yes they have where companies, yes, they have to make returns for shareholders, but sustainable returns require responsible capitalism," he said.