WionDrive News Desk 
A new wave of electric last-mile delivery startups in Europe and the U.S. is racing to meet the increasing demand for zero-emission deliveries in urban areas. Companies like Liefergrun (Germany), Zedify and Packfleet (UK), and DutchX (New York) are seizing the opportunity to serve retailers and consumers while industry leaders are still gearing up for electrification.
Targeting ESG and Emission-Reduction Goals
These startups are capitalizing on retailers’ need to meet environmental, social, and corporate governance (ESG) and emission-reduction targets. Collectively, these startups have secured approximately $1 billion in investments, according to Pitchbook and Reuters data.
Timing Is Key
Industry giants like FedEx, Deutsche Post DHL Group, Amazon, and United Parcel Service (UPS) have ambitious plans for electrifying their delivery fleets but have longer lead times. For instance, FedEx aims for a zero-emission delivery fleet by 2040, while Deutsche Post DHL Group plans to make 60% of its fleet electric by 2030. Amazon intends to deploy 100,000 Rivian electric trucks by 2030, and UPS expects 40% of its vehicles to run on alternative fuel by 2025.
Scaling Up and Competitive Pricing
These startups, albeit smaller in scale, aim to capture market share by scaling up while maintaining competitive pricing. The challenge lies in rapidly growing their operations while keeping costs low in a competitive market. Their growth potential could make them attractive acquisition targets.
Sustainability and Expansion
Retailers like H&M have been quick to partner with these startups to achieve sustainable deliveries. Liefergrun, for example, has expanded rapidly across Germany and Austria, collaborating with fashion retailers like H&M and Inditex. The company has plans to further increase its revenue from single-digit millions in 2022 to triple-digit millions in 2024.
The Race for Zero-Emission Deliveries
DHL is actively working on achieving 100% zero-emission last-mile e-commerce deliveries in the Netherlands by the end of 2023, with significant investments in the double-digit billions across other markets. In the UK, Packfleet’s electric van fleet is set to expand to around 400 by 2024, serving new customers and expanding to additional cities.
U.S. Market Expansion
While Europe has been more conducive to zero-emission deliveries, companies like DutchX in New York are launching innovative services, including ferrying loaded containers into Manhattan and delivering them via electric cargo bikes. The demand for zero-emission deliveries is growing, with customers like Amazon Fresh and Whole Foods pushing for greener solutions.
Challenges Ahead
Startups in this space face challenges due to their reliance on smaller vehicles, which can squeeze profit margins. Scaling up efficiently is crucial to their success. Although established carriers like FedEx, UPS, and DHL have advantages of scale, these startups present an interesting proposition, with potential for acquisition or commercial partnerships.
National Contracts and Expansion
Some of these startups, like Zedify in the UK, are already operating in multiple cities and securing national contracts from retailers. Their goal is to expand rapidly, doubling and quadrupling their deliveries in the coming years.
As demand for sustainable last-mile deliveries continues to rise, these startups aim to prove their worth in the competitive world of logistics.
