Ports need electric trucks. Forum Mobility has $400M to make it happen

Matt LeDucq, CEO of Oakland, Calif.–based startup Forum Mobility, thinks that California can meet its highly ambitious planned target to switch every truck serving its busy seaports from diesel-fueled to electric by 2035.

But he also believes that the state’s drayage trucking industry — the roughly 33,000 heavy trucks, many of them owned by independent operators, that shuttle cargo containers from ports to inland distribution centers on a daily basis — can’t affordably meet that goal without a company like his to shepherd the transition.

“We’re going to need billions and billions of dollars in California” to reach that target, LeDucq said — money for the electric trucks themselves, for high-powered chargers and electric-grid interconnections to keep them running on their daily routes, and for the hard-to-secure parcels of land to house this new fleet and fueling infrastructure.

It’s a massive and challenging buildout, he conceded — but “$400 million is a great start.” That’s the scope of the joint venture that Forum Mobility unveiled Tuesday in partnership with a fund sponsored by CBRE Investment Management, an affiliate of global commercial real-estate services and investment firm CBRE Group.

That $400 million will ​“combine with different sources of capital, debt and tax equity, to leverage into hundreds of thousands of electric trucks and infrastructure,” LeDucq said. The joint venture will start with the ports of Long Beach, Los Angeles and Oakland, but will look to broader national expansion soon, he said.

Forum Mobility also announced on Tuesday a $15 million Series A round from Amazon’s Climate Pledge Fund and Homecoming Capital, which also contributed $100 million to the joint venture. That brings the startup’s total equity raised to date to $22.5 million, and it will help fund Forum’s internal operations, including the software platform it’s designed to track and manage the fleet of electric trucks and charging depots it’s making available to drayage operators.

Forum’s business model for electrifying drayage fleets

Forum’s first customer, Long Beach–based Hight Logistics, offers a snapshot of how the startup’s business model works. For a fixed monthly fee, Forum is providing Hight with five electric semitrucks from manufacturers BYD, Kenworth and Volvo and access to high-speed DC chargers at a lot Forum has developed in cooperation with utility Southern California Edison near the port of Long Beach.

“We offer a simple monthly fixed price for an electric vehicle and a secure lot every day,” LeDucq said. ​“We’re delivering Hight the solution we’ll be able to deliver a lot of carriers — a combined vehicle and charging and fuel solution that is competitive, and that in this case beats the cost of a combustion truck.”

Electric heavy trucks cost less to operate over their lifetime than diesel-fueled trucks, and they can drive far enough on a single charge to serve drayage routes from ports to distribution centers. But electric trucks still cost up to three times as much as diesel trucks, making it hard for smaller drayage operators to pull together the financing to make the switch.

Forum combines lucrative state incentives, new federal tax credits and other funding sources to offer access to vehicles to these customers for a monthly fee. The company had 20 trucks on the road last year and expects to have a few hundred on the road by the end of this year, LeDucq said.

Electric trucks also need reliable, fast and dedicated charging stations to keep them running on tight timelines. It’s unrealistic to expect any but the largest drayage freight operators to secure their own charging locations and infrastructure, given the cost and complications involved, he said.

“The development of third-party depots is going to deliver the lowest cost per mile,” LeDucq argued. ​“When you consolidate that, you get benefits of scale, not only for the capital costs, but the efficiencies of operational cost.” Forum Mobility is developing more facilities at ports and at inland distribution centers that will be ready to ​“take hundreds and hundreds of trucks” in the coming year or two, he said.

The rise of electric-trucking-as-a-service 

Forum Mobility is far from the only company envisioning this kind of all-inclusive approach to truck electrification. Utilities, corporate fleet owners, EV-charging network operators, global electrical contractors and service providers, and startups are taking their own approaches to the challenge of converting entire fossil-fueled fleets to run on electricity.

Some well-funded contenders include Terawatt Infrastructure, the San Francisco–based startup led by Google’s former head of energy strategy, which has raised just over $1 billion to secure and build EV-charging depots for corporate fleet owners and freight operators in key locations across the country. U.K.-based oil and energy giant BP bought Amply, an electric truck and bus charging-as-a-service startup, in late 2021 and has rebranded it as bp pulse, offering turnkey services to fleet operators.

While the above companies have focused on charging as a service, others have taken the same approach as Forum Mobility by leasing or financing the vehicles themselves. Los Angeles–based startup WattEV is offering freight operators and drivers access to EV trucks shuttling between the charging depots it’s building at the Port of Long Beach and inland distribution hubs. Zeem, another startup in Los Angeles, has built a 10-megawatt charging hub near Los Angeles International Airport to service the EV delivery trucks and passenger shuttles it plans to lease to companies seeking to go electric.

Port drayage fleets are an early focus for many of these companies. Most port freight-hauling happens on set schedules and at well-defined distances that lie within the operating range of today’s battery-powered heavy trucks, making them an easier target than the long-haul trucks crisscrossing the continent.

Ports are also a focus of policymakers targeting one of the worst and most concentrated sources of on-road air pollution and carbon emissions. In the U.S., about 39 million people live within three miles of a port. A majority of those people are in lower-income tiers and people of color.

“Ports are the No. 1 target” for vehicle electrification, said Victor Rojas, senior vice president with Sustainable Capital Advisors, a Washington, D.C.–based financial, research and policy advisory firm. ​“There are health implications, environmental implications, jobs and workforce development implications. You get a lot of bang for your buck in developing electric drayage vehicles and other electric infrastructure.”

Ports will have access to billions of dollars of federal incentives from last year’s Inflation Reduction Act and the 2021 Bipartisan Infrastructure Law, including $3 billion to reduce air pollution and promote zero-emissions technology. California ports are also eligible for a host of state grants, including $400 million per year in Trade Corridor Enhancement Program funds and other low-carbon transportation and charging programs.

The adjacent ports of Long Beach and Los Angeles, which together constitute the nation’s largest shipping hub and the largest single source of air pollution in Southern California, are a particular focus for electrification of vehicles, forklifts, gantry cranes and other cargo-moving equipment. They’re also the early target for EV-charging installations from providers such as Electrify America, the company investing $2 billion in U.S. EV charging as part of Volkswagen’s Dieselgate settlement agreement, and EV Connect, the startup acquired last year by Schneider Electric, the global electric equipment and services giant.

The risks and rewards of building an electric cargo-hauling network 

Of the roughly 33,000 trucks running drayage routes in the state, about 80 percent are owned by independent operators, many of them sole proprietors. Proposed clean trucks regulations from the California Air Resources Board would require that all drayage trucks be zero-emissions models by 2035, 10 years ahead of its 2045 target for all medium- and heavy-duty vehicles.

Mandating that switch without sufficient financial, operational and logistical support could force many of these smaller operators to choose between going out of business or taking on costs they can’t handle, LeDucq said.

“It’s easy to make a mandate,” he said. ​“It’s really hard to do it in a way that’s both environmentally and economically equitable. Environmental justice can get dirty trucks out of ports — that’s a rallying cry. But what about the economic justice? It has to be part of this. You have to save the small fleets — and to do that you have to make a comprehensive solution for them.”

To succeed in providing this comprehensive solution, Forum Mobility and other providers of electric-trucking-as-a-service will need to balance a lot of uncertainties. They’ll need to take on the costs of obtaining land, charging infrastructure and electric trucks and undertaking expensive and complicated charging-depot construction, and rely on a significant and growing roster of customers to make those long-term investments pay off over time.

“It’s no secret how infrastructure works. You build good assets and utilize them highly and run them well, and you’ll be fine,” LeDucq said. 

A deep-pocketed and experienced real-estate partner like CBRE allows access to lower-cost capital than most freight operators could expect to secure for developing charging depots, he added. Forum Mobility’s executive team, meanwhile, combines individuals with experience in developing more than $20 billion in construction projects, he said — including LeDucq’s work as the former origination director for distributed generation projects at leading U.S. clean-energy developer NextEra Energy Resources.

This experience building distributed solar and battery projects for commercial, industrial and municipal customers also lends itself to the unique challenges of connecting megawatts of EV charging on a power grid that will struggle to supply high levels of concentrated power in coming years, he said.

“When we have thousands of trucks on the road, we need the distribution [grid] system to keep up with us,” he said. As the number of electric trucks serving ports grows from hundreds to thousands, charging needs could quickly outstrip available grid capacity.

Like many other EV-charging providers, Forum Mobility is looking at distributed solar and batteries to bolster available grid power supplies, he said. EV Edison, an arm of New Jersey–based Power Edison, is deploying mobile batteries to support up to 200 megawatts of heavy-duty EV charging to serve ports in New York and New Jersey. California will need about 2,000 megawatts of charging capacity to fulfill the state’s 2035 all-electric mandate, LeDucq said.

But companies that can get the business right stand to reap commensurate rewards, he said — and not just from keeping abreast of mandates. LeDucq highlighted the growing appetite from the companies that own the products being transported in containers to ports across the country — ​“beneficial cargo owners,” in legal parlance — for transportation options that can help them meet their internal decarbonization and environmental, social and governance (ESG) goals.

To date, large companies with ESG goals have largely taken on their transport carbon emissions by investing in their own freight fleets. But drayage companies that can offer an emissions-free option may be able to negotiate more favorable contracts with them as well, he noted.

“As we’re entering this phase of electrification, we also have this ESG tailwind,” LeDucq said. ​“Those cargo owners are a really important part of this.”