LoadExx offers an Uber-like model for last mile logistics using electric vehicles

Kolkata based LoadExx has introduced an Uber-like on-demand service for first and last-mile logistics using its EV fleet of L3 and L5 category vehicles. They aggregate EVs from different OEMs and also own some of the fleet that is offered via their platform. One can book a vehicle for transporting goods through LoadExx app or calling a phone number. We spoke to CEO Amit Arora to find out more.

Most of the EV fleet operators cater to last-mile e-commerce or food deliveries, but your primary focus is the B2C segment serving farmers, shopkeepers, and FMCG companies. What was the rationale behind catering to this segment?

Amit Arora – CEO, LoadExx

The rationale was quite simple for us. We wanted to become a people’s brand, a brand anyone could access. We never wished to limit ourselves to the peculiar B2B segment that represents a mere 10% market in the last mile logistics. We figured that EVs with proper customization coupled with technology in the trip allotment could change India’s highly unorganized market of last-mile logistics. We tried doing it with the power of algorithms, OEMs’ support, and deep market knowledge.

What is the current scale of work at LoadExx? How do you make the distinction between ‘Delivery space’ and ‘Logistics space’?

We started with two vehicles in July 2020. Currently, we have 7 vehicles on the road in our name, 85 in aggregation, and 285 in assembly line with partner OEMs. We have catered to more than 300 B2C trips and 16 B2B weekly subscriptions.

In India, people often mistake ‘Delivery space’ for ‘Logistics space’. Delivery is an integral part of logistics, while logistics in itself is a vast sphere to explore. Being a Goods Transport Agency (GTA) in a real sense, we find ourselves as first and last-mile logistics player rather than a delivery player.

In logistics, there are ancillary services like storage, warehousing, loading/unloading, consignment note, and insurance involved, while in delivery only some of these services are used. Logistics includes volume and payload utilization for a vehicle to ensure the maximum savings for transporters and customers both, while in the delivery it is about less time and more convenience. In logistics, there is no GST involved for the GTA if the trip value is less than INR 1500, while in the delivery irrespective of the amount, you pay 18 percent GST. For moving a 25 kg parcel 20 km away, I will look for a delivery service that can do it in INR 150 rather than looking for a logistics service that charges INR 1000 for 20 km as they charge for space and weight utilization. But, I will prefer the last mile logistics service if weight is 600 kg, and I require a volume of 100 cubic ft.

Also read: An Overview of electric 3Ws in India’s last-mile delivery space

What pain points you are trying to address for your target audience?

India’s last-mile logistics market is both unorganized and costly. This market is stuck with erratic supply, fragmented setups, high fuel cost, and in city passage timings. Moving a shipment for 10 km in a metro can cost anywhere between INR 600-INR 1200. The rising cost of last-mile deliveries has made it difficult for a small and medium-scale business to reduce their operational expenses owing to high procurement and transfer costs. Last-mile delivery/procurement adds to 12-19% of the total cost.

Finding a small vehicle (LCV category) when we need to move or send goods from one place to another is not easy. It is also affected by the high prices and Group Unions. The problem is chronic in tribal, hilly, semi-urban, rural areas, and small cities. Either we need to go to the local vehicle stand or ask someone to ask their references to send the vehicle. The drivers involved have their own set of rules and ways to ask for higher prices because in the majority of metro areas, there is a problem of no entry in the daytime. For last-mile logistics, generally small Dala cars and two-wheelers are used. In case of Dala cars, mainly large appliances and sensitive equipment are transported.

What are the main challenges with running a cargo EV fleet?

To mention some:

1. Management of the drivers and their range anxiety

2. Catering to high expectations of the customers like free loading/unloading services, high waiting time, and no nuisance monthly billing.

3. Ensuring optimum utilization (70%) of the total fleet size irrespective of ownership model.

4. Volume constraint in the case of 3-wheel EV owing to aerodynamic stability issues of the vehicle.

5. Breakage and high cost of vehicle components in case of break down.

6. High depreciation of batteries both financially and categorically.

7. Low awareness of civic and police authorities regarding EVs resulting in overhead expenses in road fines.

8. Affordable garage and charging facilities.

It is understood that present-day cargo EVs in India are only good for payloads up to 500 kg (with the exception of retrofitted LCVs that may provide up to 1-ton capacity). How do you deal with this challenge in your day to day operations?

All the Electric vehicles in India, especially in the L3 and L5 category have a 48V battery configuration, which is a standard for open-source network and safety standards in Europe. But in Europe, if a vehicle has a payload clearance of 500 kg, then the driver and the fleet owner ensure that they carry only 500 kg. So, such battery configurations work well for their charging, swapping, and payload needs.

In India 500 kg payload is just required by 2-3% of the businesses. Rest of the businesses and activities prefer 750-1500 kg or at least 130-180 cubic ft volume in last-mile logistics. That weight can’t be transported by a vehicle running on 48V because the battery carries high current to maintain the power, resulting in heating of the battery and the motor. So, we realized that no matter what clearance an L5 or N1 vehicle has for payload, the vehicle should have the capacity to cater to at least 1.75 times of its payload clearance if it needs to run for the Indian market. That could only be possible with 60 V battery and proper vehicle stability research with the OEMs. We partner with OEMs who are agile in their operations and can listen to us for a better market reach.

How do you see the EV logistics space evolve going forward? What would be your advice to EV OEMs and fleet operators?

In India, clearance and approval is a different thing, and the actual scenario of the roads is a different thing. The market changing Tata ACE has a payload clearance between 730-900 kg based on the different models, but it carries anywhere between 1-1900 kg because the vehicle is designed as per Indian customer needs in weight and volume.

Sadly, OEMs in the EV space fail to understand that. Just to make their vehicles more ROI based on their capital, they go with a 48V battery configuration thus limiting the payload capacity to 600 kg. That payload, unfortunately, can serve the needs of a few cubicle businesses but not the Indian markets. The EV space will only develop if the L5 EV vehicles by any OEM can give competition to vehicles like Piaggio Ape, Scooter India’s Vikram, and Ashok Leyland’s Dost in volume and weight alike which will motivate the drivers and fleet owners to buy or replace their existing fleet with EVs.

The ecosystem in commercial EVs could only develop with collaboration at roots in technology, financing, battery buybacks, and rentals. Else, expecting a small fleet owner and a driver to buy a Rs. 3.5 lakh L5 EV or Rs. 8 lakh N1 EV is a dream to sell with a shock of INR 1.2 lakhs again in 3 years for a new battery. The driver will buy a new ICE vehicle in INR 2.6 lakhs with single day financing window available rather than buying an EV.

Else, launching and selling EVs in the commercial goods carrier category in an isolated system will make vehicles redundant again in a few years, the way it happened with L3 Electric vehicles after the arrival of L5. The innovation needs to come in financing as well, where traditional players have failed, and the disruption is still off the shelf.

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