Batteries are the new oil, and logistics are changing around them

As the world’s energy system shifts from hydrocarbons to electricity, batteries are becoming fundamental to the economy of the 21^st Century. But while the challenges of transporting oil and gas are widely recognised, those around the movement and storage of batteries are much less so, even as ever more of our energy is stored within them. Here we examine what manufacturers and logistics providers need to do to secure and grow battery logistics. 

Refined or compressed oil and gas products are generally transported as a liquid. A complex array of vehicles and infrastructure has evolved to deliver these energy sources to consumers, ranging from tankers to bunkers to pipelines. Batteries however are different: they are transported in solid form, and they have no standard size. 

They range from being as small as a grain of rice to packs that are as large as shipping containers, reflecting their use in everything from micro-electronics to the grid-scale balancing of intermittent solar and wind energy. As electric vehicles (EVs) become an integral part of modern life and commerce, these larger and more powerful batteries are increasingly in high demand. 

Another key difference is that batteries have an end-of-life phase. Re-purposing or recycling them to extract valuable materials, and to safely dispose of toxic ones, is now a major industry, one that again requires logistics expertise to create value.

Like oil and gas, however, batteries can store a large amount of energy, and this makes them potentially hazardous. A number of recent major fires at storage and recycling sites have illustrated the potential risks. A particularly notable incident was a fire at the world’s largest battery storage plant in Northern California in January 2025, which led to the evacuation of hundreds of people amid concerns about the release of toxic gases. 

For this reason, regulations around battery distribution and storage are complex and evolving, but the rulebook is not the only challenge. 

UN Model Regulations designate lithium-ion (Li-ion) and sodium-ion batteries as Class 9 hazardous goods. While less hazardous than gases and flammable liquids (Classes 2 and 3, respectively), the batteries’ designation nonetheless means that transportation and storage must comport strictly with the relevant regulations, given the risk of thermal runaway, fire and explosions.

The regulations themselves are only part of the complexity faced by third-party logistics (3PL) companies says Christophe Pintore, Global Account Director for FM Logistic. “The primary challenge for warehousing is to meet the high safety requirements set by insurance companies,” he says. “These are currently stricter than regulatory requirements. Meeting the expectations of insurers requires significant investment and expertise.”

In France, for example, batteries cannot be treated as normal palletised goods. Due to fire risk, they need to be stored in size-limited zones separate from other types of stock within a warehouse, and below a designated height to lessen the risk of fall damage. Batteries that are at end-of-life, damaged or charged beyond a specified threshold must be further segregated, and staff must be trained to recognise signs of damage. In some circumstances a battery stack has to be monitored 24/7 by security professionals, so fires can be reported immediately.

In Christophe Pintore’s view, logistics real estate must today be designed from the ground-up with battery storage in mind, and the requisite licenses secured. 

“At FM Logistic, we have a head-start because our subsidiary, Bati Logistic, has its own unit, NG Concept, that specialises in engineering and pre-licensing for hazardous goods storage,” he says. “Batteries are a hot market and our clients are under a lot of pressure to render their supply chains reliable, resilient and safe. For that, they need warehouses that have the necessary licences, that are insured and are compliant.”

Regulations for transportation differ based on whether the battery is integrated into a final product or is a standalone component, and for different weights and charge levels. 

UNECE ADR regulations, which prescribe uniform guidelines for the safe road transport of hazardous materials across borders and cover factors such as classification, packaging, labeling, documentation, vehicle requirements and driver training, require battery packs to be separated in tiers by non-conductive material; that battery terminals must be packed in such a way that they do not support the weight of other goods, to prevent damage and short-circuits; and that batteries must be secured to prevent their movement during transportation in bins or drums that must be chemically resistant to the battery’s electrolyte, in case of leaks. 

Even more stringent regulations are applied to air freight. IATA guidance on transporting li-ion batteries by plane, for example, focus on classification, packaging, marking and documentation, and requires that the batteries are never shipped by air at a state of charge more than 30%, but with different rules and limits applying to batteries depending on whether they are integrated into goods or not.

When it comes to recycling end-of-life batteries, these must be collected from a wide range of locations and facilities, further complicating the logistics challenges. Traceability is key, says Christophe.

He also highlights the importance of reverse logistics. As batteries become larger to meet demand for EVs, their safe disposal and recycling is rising as a priority. The US EPA, for example, classes most Li-ion batteries as hazardous waste, because of the fire and explosion risks of disposing of them improperly. This factor is driving the reverse-logistics market, but so is the importance of sustainability and recovering valuable materials from end-of-life cells. 

In 2023, the EU introduced tough regulations to ensure that the life-cycle of batteries is conducted on a sustainable basis, with further rules coming in 2025 to add details to how batteries must be recycled and their material recovered. In particular, the EU’s Digital Battery Passport is intended to break down information siloes across the supply chain to ensure transparency and compliance.  

Several Asian countries have also implemented regulations to ensure the sustainable management of battery life cycles, but a key challenge facing the 3PL industry is the lack of a standardised regulatory framework around the storage and transport of batteries in some regions, notably across Asia Pacific. Various countries around the region are developing their own regulations.

Demand for larger batteries has risen rapidly in recent years, as their costs have fallen. This is placing a strain on the 3PL industry, says Christophe Pintore, because the need for battery-related investment is high but few customers are willing to sign the long-term contracts that would in themselves justify those investments. 

“If you look around the market, many 3PL operators are not ready,” he says. “When you see what’s happened in real estate, they are still building warehouses for the storage of simple products, rather than for batteries and their recycled byproducts.” 

This is where FM Logistic has an advantage, as a partner that can scale with fast-growing demand. “We have already made the requisite investments, which means we are ready to respond to the dynamism of the emerging battery-electric supply chain,” Christophe Pintore says. “We can stock new batteries, we can stock damaged batteries, we have multi-customer sites that help control costs, and we can stock materials recovered from battery recycling.”