Delhivery, one of the largest third-party ecommerce delivery companies, has decided to increase freight charges by 30% effective April 1 for “Delhivery Air and Surface”. Logistics aggregator Shiprocket, which works with Delhivery, told its clients of the steep increase in the charges from Friday. ET has reviewed the note. “This is on account of the steep rise being witnessed in commercial fuel charges over the recent weeks and other systemic factors in the logistics markets.”
The decision to increase freight charges comes at a time when
petrol prices have crossed Rs 100 mark in several major cities. The price of diesel has also hit the Rs 100 mark in Mumbai.
Delhivery did not respond to ET’s query till Thursday press time.
Another large ecommerce delivery firm Ecom Express is also mulling a similar increase in its pricing. “The costs have gone up so there is some correction that is needed,” founder TA Krishnan told ET. “We are internally contemplating because even to set up our own infrastructure, the cost of steel has gone up, the rentals have gone up, we are contemplating but we have not formed a decision on this yet.”
Sellers have to pay delivery fees to third-party logistics firms or to Flipkart and Amazon India directly. Flipkart and Amazon are the biggest clients of companies like Delhivery and an increase in freight charges will impact the per order income of online vendors. Typically, independent online sellers pass on at least a part of the price hike to consumers when marketplaces or delivery firms change their various fee components.
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“I don’t think the cost would be borne by the platforms, it is likely to be borne by the seller. And the seller will pass it on to the end user,” said Krishnan.
Sellers ET spoke with said that they are yet to receive a communication from Amazon, Flipkart or Meesho about any hike in freight rates, but they expect to pass on the additional cost to the customers by increasing prices as and when costs rise.
“We are yet to receive any communication regarding this from any platforms,” said Aniket Ghosh Chaudhary, cofounder of audio brand Mulo, which sells home audio and headphones mainly on Amazon India and its own website. He said that historically Mulo has had to increase the price of the product due to rising fuel prices. Ghosh said that a year back the shipping cost of a home audio product was Rs 250 but it now costs Rs 300 as a result of rising fuel prices. These costs were always passed on to the customers when customers order from its website.
Anshad Aboobacker, a seller of kids apparel primarily on Meesho, also said that there has been no communication from the platform yet. “We do not deal with Delhivery or any third-party logistics directly as it is completely taken care of by Meesho. As of now, we have not received any message from Meesho of any increase in costs,” he said.
Meesho relies entirely on third-party logistics companies as it does not have a logistics service of its own unlike Flipkart and Amazon India, which have their own logistics arms – Ekart and Amazon Transportation Services, respectively. A significant chunk of Meesho’s orders is delivered through Delhivery. All three e-commerce companies did not respond to ET’s queries on the matter.
Delhivery has also filed for a Rs 7,460 crore
initial public offering (IPO)which has been cleared by the markets regulator Securities and Exchange Board of India (Sebi).
In an exclusive chat during the Economic Times Startup Awards 2021, in Bengaluru on March 12, Sahil Barua, cofounder and chief executive of Delhivery said that the company has decided to
wait out on its IPO plans, considering the market volatility, which spooked public market investors during the first quarter of 2022.
