Bengaluru: The battle between large logistics companies and online logistics aggregators has intensified since ET reported last month that three of the largest ecommerce-focussed logistics players – Delhivery, Ecom Express and Xpressbees – simultaneously increased shipment prices for the aggregators for trying to poach their clients. Multiple people aware of the matter said some of the aggregators asked the logistics companies to reconsider their decision and at least partially roll back the hikes, but the logistics companies didn’t entertain their requests.One of the companies, Xpressbees, even told some of its clients over email that it wouldn’t pick up new orders unless the aggregator formally agreed to the new pricing. This was part of a reminder note sent by the company, seeking acknowledgement of new shipment rates. Similarly, IPO-bound Delhivery and Ecom Express are also sticking to their hikes, albeit after giving a grace period to some of the aggregators last month.
Sources added that this has now forced aggregators to increase prices for their customers. They are not imposing a uniform hike, though. The changes in pricing differ from client to client as they don’t want to lose a large chunk of order volumes at one go. Some of these companies are in the middle of fundraising talks, people briefed on the matter said.
ET reported on April 18 that due diligence was underway at Pickrr, one of the aggregators, for a potential funding round. Shiprocket is also exploring a new fundraise but the details are not clear yet
“There were several discussions following the rate hike from April 1. Delhivery did give some grace period in certain cases but all three firms are sticking to the decision on pricing,” one of the aggregators who has spoken to these firms said. “I think some of the bigger aggregators going super-aggressive on pricing and approaching original clients of logistics firms has irked these companies, and thus there doesn’t seem to be much scope for negotiation.”
Spokespersons for Delhivery, Ecom Express, Xpressbees, Shiprocket declined to comment on the matter while an email sent to Pickrr did not elicit a response on Sunday.
“They (aggregators) don’t have a choice now. But even then they are losing money on some orders that are being serviced at old rates,” one of the sources mentioned above added. ET previously reported that shipment charges were increased by as much as 35-40% for orders received via online logistics aggregators.
“The dilemma is that one doesn’t want to show a significant drop in volumes because of the conflict and that is putting pressure on all aggregators,” the person mentioned above said. According to him, some of the companies in space are exploring a hybrid model in face of the ongoing conflict.
Aggregators like Shiprocket or Pickrr don’t own warehouses or build their own delivery infrastructure. They aggregate orders and take them to companies like Delhivery, Ecom Express and others. These platforms gained traction by aggregating delivery orders from niche direct-to-consumer (D2C) brands, local businesses and other small and medium businesses, while companies like Delhivery, Xpressbees and others deal directly with enterprise clients with large shipment volumes.
Source-https://economictimes.indiatimes.com/tech/technology/logistics-aggregator-firms-in-a-tussle-over-shipment-rates/articleshow/91423126.cms