Ecommerce Logistics Price Increase: Ecommerce logistics firms Delhivery, Ecom Express, Xpressbees give aggregators a price shock

Bengaluru: A new battle has begun between the country’s three largest ecommerce focused logistics firms and new-age logistics aggregators. Delhivery, Ecom Express and Xpressbees have simultaneously increased shipment charges by as much as 35-40% for orders received via online logistics aggregators such as Shiprocket, Pickrr, Shipyaari and others, said people with knowledge of the development.

The hike in prices effective earlier this month, said those briefed on the matter, is more tactical in nature as the logistics players found that aggregators were offering aggressive pricing for per-shipment deliveries compared with their own rates for enterprise clients or even SMEs (small and medium enterprises).

Aggregators such as Shiprocket don’t own warehouses or build their own delivery infrastructure. They aggregate orders and route to them companies like Delhivery, Ecom Express and others.

These platforms started gaining traction for aggregating delivery orders from niche direct-to-consumer (D2C) brands, local businesses and other SMEs while players like Delhivery, Xpressbees and the like dealt directly with enterprise clients with a higher shipment volumes.

Sources said the ecommerce-focused delivery firms were also spooked by some of their enterprise clients being wooed by aggregators with cheaper rates.

“They (the three leading players) have come together and increased rates for aggregators at the same time effective April 1. In some cases, the rate increase is as much as 50%,” said one of the people mentioned above. ET has also seen emails from Delhivery and Xpressbees informing aggregators of the revision in pricing for them.

Delhivery, Shiprocket and Pickrr didn’t respond to queries. Ecom Express cofounder and chief executive officer (CEO) TA Krishnan, Xpressbees cofounder and chief executive officer (CEO) Amitava Saha and Nayan Ratandharaya of Shipyaari declined to comment.

“In order to continuously grow shipment numbers, the aggressive pricing has led to significant disruption,” said one of those cited above. “For smaller orders from aggregators, they (delivery firms) have to now share their bandwidth on these clients while enterprise clients also raised questions how an aggregator is offering cheaper prices to them compared to when they are working directly with a delivery firm.” ET has seen a note from Shipyaari to its clients saying “all the leading players have come together and implemented this without giving us much time to ponder.”

Sources briefed on the matter said Xpressbees, for example, has increased rate slabs for aggregators. They will be charged the new rates for clients moving up to 1,000 orders a day and then 5,000 orders a day and so on. Delhivery, Ecom Express have taken similar measures as well.

Interestingly, the increase in rates for aggregators has come at a time when many of them are also in various stages of talks to raise new funds at increased valuations. Sources said due diligence is underway at Pickrr for a new round of funding. Shiprocket, among the largest aggregators,
was valued at $900-950 million after a $185 million round led by Zomato, Temasek and Lightrock. It’s said to be exploring a new funding round at a significantly higher valuation.

Xpressbees turned a unicorn on February 10
after closing a $300 million funding round while Delhivery and Ecom Express have been working on plans for a listing, which now stand postponed due to the volatility in the markets, especially for new-age companies. Aggregators are yet to fully pass on the increase in rates to their clients. It isn’t clear how long they plan to continue servicing orders at the old rates, said the people cited above.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.