Contxto – Don’t you just hate it when high shipping costs dissuade you from placing an order online?
Between 2012 and 2018, shipping costs have been steadily increasing year after year, especially when it comes to Amazon purchases. Compared to an average US$5.13 billion six years ago, these fees skyrocketed to US$27.7 billion in 2018. Adding to the logistics bill are fulfillment costs, such as operating and staffing distribution center, tackling on an additional US$34 billion.
Research from the Forrester Research center even suggests that 44 percent of forfeited purchases are due to such prices. Brands end up losing US$18 billion a year in revenue based on this shopping cart abandonment.
In response, some internet-based companies take on extra expenditure, offering subsidized or free shipping to increase sales. While this is certainly appealing, the fact of the matter is that gasoline charges still exist.
Realizing this, startups such as ASAP Log are resorting to electric vehicles to diminish gasoline-guzzling expenses altogether. Recently, the logistics startup partnered with Hitech Electric to implement e-cars in delivery services.
Less gasoline, more battery
In reality, somebody, whether they’re driving a commercial truck or using a bicycle, is typically responsible for delivering goods from Point A to Point B. Most of the time, this requires some sort of fuel, naturally part of shipment rates.
For Rafael Mendes, CEO of ASAP Log, the answer to curbing these costs lays in electric vehicles. His logistics company based in Curitiba has collaborated with Hitech Electric to develop e-cars in hopes of remodeling the e-commerce industry.
“The biggest cost for ASAP Log drivers is undoubtedly the fuel,” said Mendes, whose logistics company employs over 1,200 deliverers making shipments to over 700 stores across southern Brazil.
“Using electric cars seemed to be the best solution for the moment. In addition to the cost reduction, they are more environmentally-friendly vehicles.”
Delivery to virtual stores is what ASAP Log provides to clients. To better serve the e-commerce industry, the logistics company and Hitech Electric based the partnership on the e.coTech4 model.
Manufactured by Hitech Electric, the compact electric vehicle can reach up to 90 kilometers on a full battery, only costing US$5 to recharge. For the same distance, that would cost US$30 in gas. In Brazil, there are even certain states that offer tax reductions for those with e-cars.
At the moment, deliveries are only available in urban communities. In terms of maximum speed, the vehicle can only reach a maximum speed of 68 kilometers an hour.
This isn’t the first time that Hitech Electric has collaborated with startups. Last month, it also ran a pilot with the Brazilian rideshare app, 99.