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e-commerce shipments: Logistics cos Delhivery, Ecom Express clash with aggregators over shipping rates

Bengaluru: The battle between big logistics companies and online logistics aggregators has intensified since ET reported last month that three of the biggest e-commerce-focused logistics players – Delhivery, Ecom Express and Xpressbees – simultaneously raised shipping prices for aggregators for trying to poach their customers. Several people familiar with the matter said that some of the aggregators had asked the logistics companies to reconsider and at least partially reverse the hikes, but the logistics companies did not respond to 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 agreed to the new prices. This was part of a reminder note sent by the company, seeking recognition of the new shipping rates. Similarly, IPO-linked Delhivery and Ecom Express are also sticking to their upsides, albeit after granting a grace period to some of the aggregators last month.

Sources added that this has now forced aggregators to raise prices for their customers. However, they do not enforce a uniform hike. Price changes differ from customer to customer as they do not want to lose a large portion of order volumes at one time. Some of those companies are in the midst 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 fundraiser but details are not yet clear.

ETtech

“There have been several talks after the April 1 rate hike. Delhivery has given a grace period in some cases but the three companies are sticking to the pricing decision,” one of the aggregators said. who has spoken to these companies. “I think some of the larger aggregators who have become very aggressive on pricing and approaching the original customers of logistics companies have irritated those companies, so there doesn’t seem to be much room for negotiation.”

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

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

“The dilemma is that you don’t want to see a significant drop in volumes because of the conflict and that puts pressure on all the aggregators,” said the person mentioned above. According to him, some space companies 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 consolidate orders and forward them to companies like Delhivery, Ecom Express and others. These platforms have gained traction by aggregating delivery orders from niche direct-to-consumer (D2C) brands, local businesses and other small and medium-sized businesses, while companies like Delhivery, Xpressbees and others process direct with corporate customers with large shipping volumes.

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