A number of delivery startup companies in Europe and the United States are vying to capture the growing market for zero-emission, electric last-mile deliveries in cities. These startups, including Liefergrun in Germany, Zedify and Packfleet in the UK, and DutchX in New York, are aiming to meet retailers’ demand for environmental, social, and corporate governance targets. To date, these zero-emission delivery startups have collectively raised about $1 billion in funding.
These startups are seeking to gain market share before large shipping companies such as FedEx and Deutsche Post DHL Group fully implement their own zero-emission delivery plans. While industry leaders have set targets for 2030 and beyond, the startups are using their own routing technology to provide low-cost and efficient delivery services. They must rapidly scale up their operations while keeping prices competitive in a market that could see them becoming acquisition targets for larger companies.
Liefergrun, for example, delivers packages for fashion retailers H&M and Inditex as well as meal kit company Hello Fresh. The company builds package hubs in city centers and contracts out deliveries to third parties, providing them access to electric van deals from Mercedes-Benz or China’s Maxus. Liefergrun’s CEO, Niklas Tauch, expects the company’s revenue to grow rapidly in the coming years.
While established delivery giants like DHL have already started implementing zero-emission delivery projects, challenges remain for startups looking to scale up. Many startups use smaller vehicles than traditional delivery trucks, which can squeeze profit margins. However, startups like Zedify in the UK have found success by operating in multiple cities and securing contracts with large retailers like FedEx. These startups have proven that they can operate efficiently and profitably at scale.
As customer demand for zero-emission deliveries grows, both established carriers and startups are under pressure to cut emissions. Investors are also pressuring logistics companies to address environmental concerns. Retailers like IKEA have set ambitious targets for zero-emission last-mile deliveries. While startups present a potential threat to established carriers, companies like DHL are open to partnerships or working together with these startups.
– Zero-emission delivery: Delivery services that use vehicles powered by renewable energy sources and produce no emissions during operation.
– Last-mile delivery: The final stage of the delivery process, typically involving the transportation of goods from a transportation hub to its final destination.
– Environmental, social, and corporate governance (ESG): A set of criteria used to assess a company’s environmental and social impact, as well as its corporate governance practices.
– Acquisition targets: Companies that are attractive to other companies for potential acquisition or merger.
– Original article: Reuters