Logistics, aggregating companies fighting for shipping rates

Bangalore: The battle between greats logistics company and online logistic aggregators has escalated since ET reported last month that three of the largest ecommerce-focused logistics players – Delhivery, Eco Express Other Xpressbees – Simultaneous increase in shipping prices for aggregators for trying to scam their customers. Many people aware of the matter said that some of the aggregators asked the logistics companies to reconsider their decision and at least partially cancel the increases, but the logistics companies did not comply with their requests.

One of the companies, Xpressbees, even told some of its customers via email that it would not take new orders unless the aggregator formally accepted the new price. This was part of a reminder note sent by the company asking for recognition of the new shipping rates. Similarly, Delhivery and Ecom Express, linked to the IPO, are also sticking to their increases, although last month they granted a grace period to some aggregators.

Sources added that this has now forced aggregators to raise prices for their customers. However, they are not enforcing a uniform excursion. Price changes vary from customer to customer as they don’t want to lose a large chunk of order volume in one go. Some of these companies are in the midst of fundraising talks, people briefed on the matter said.

ET
reported on April 18that due diligence was in progress Pickrrone of the aggregators, for a potential funding round. Naval rocket he’s also exploring a new fundraiser, but the details aren’t clear yet.

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“There have been several discussions since the rate hike since April 1. Delhivery has granted a grace period in some cases, but all three companies stick to the pricing decision,” said one of the aggregators he spoke to. these companies. “I think some of the larger aggregators that get super aggressive on pricing and get close to the original customers of the logistics companies have bothered these companies, and so there doesn’t seem to be much room for negotiation.”

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Spokespeople for Delhivery, Ecom Express, Xpressbees and Shiprocket declined to comment on the matter while an email sent to Pickrr did not elicit a response on Sunday.

“They (aggregators) have no choice now. But even then they are losing money on some orders that are fulfilled at the old rates, “added one of the aforementioned sources. ET previously reported that shipping costs have been increased by up to 35-40% for orders received. through online logistic aggregators.

“The dilemma is that you don’t want to show a significant drop in volumes due to the conflict and this is putting pressure on all aggregators,” said the aforementioned person. According to him, some of the companies in space are exploring a hybrid model in the face of the ongoing conflict.

Aggregators like Shiprocket or Pickrr do not own warehouses or build their own delivery infrastructure. They aggregate orders and take them to companies like Delhivery, Ecom Express and others. These platforms have gained ground by aggregating delivery orders from direct-to-consumer niche brands (D2C), local businesses and other small and medium-sized businesses, while companies like Delhivery, Xpressbees and others deal directly with corporate customers with large shipping volumes.

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