Logistics Startup DOT Puts An Eco-Friendly Spin On Ecommerce Deliveries in India
Logistics Startup DOT Puts An Eco-Friendly Spin On Ecommerce Deliveries in India
For the past few years, India has been battling with higher air pollution, and there’s increased pressure from the global community on India’s increasing population to cut down reliance on fossil fuels. The switch to renewable energy is happening, but at the same time, high pollution rates mean Gurugram is the most polluted city and Delhi the most polluted capital in the world. A major contributor to this growing pollution is vehicular emissions, especially as millions of Indians start using the convenience of online shopping and deliveries.
As internet penetration continues to grow in India, the ecommerce sector has recorded a massive boom, and in order to support this growth, the logistics sector plays a key role to make sure deliveries reach customers on time. However, that has also led to more and more vehicles plying the road, which contributes greatly in increasing emissions. Besides emissions, these traditional petrol or diesel vehicles also eat into non-renewable sources and that’s certainly not feasible in the long run.
To sustain growth in an eco-friendly manner, Indian companies have to adopt electric vehicles for business and public use-cases. While India is aiming to achieve deeper penetration of electric vehicles by 2030, one of the major roadblocks is the lack of a robust charging infrastructure, which adds to “range anxiety” among business customers.
That’s what DOT founder Vineet J Mehra wanted to change. DOT provides first and last mile logistics solution only through a fleet of electric vehicles. Mehra said one of the ways he overcame the fears a typical e-vehicle business might have by thinking about doing “what is right”.
“We really wanted to create a sustainable company for the future, that really cares about the environment, considering the responsibilities and limitations of a company entering into the logistics space,” said Mehra.
Believing In Doing “What Is Right”
Mehra told us DOT or ‘Go With DOT’ was founded to provide eco-friendly and sustainable solutions for the logistical needs of individuals and organizations. It offers first and last mile delivery services using its fleet of e-cargo vans and electric bikes.
The startup currently caters to the ecommerce, food and merchandise segments. It counts companies such as Walmart, Aramex, Amazon, Grofers, Blue Dart, DHL, Lenskart, Swiggy, Faasos, Nature’s Basket, McDonald’s as its client partners. DOT has operations in over 22 cities including Delhi-NCR, Mumbai, Chennai, Pune, Lucknow, Chandigarh, Raipur, Jhansi, Meerut, Haridwar and Bengaluru.
Using a proprietary mobile platform to connect riders and clients, DOT offers seamless connectivity for clients to order rides or pick-ups at any given time in the day. The company operates on a paid per kilometre model where the price per kilometre has been fixed for the vehicles.
While speaking with Inc42, Mehra explained that one of the reasons that led him to launch his startup was believing in doing the right thing. His vision was to build a sustainable logistic solution, which is extremely crucial as shopping and commerce move online.
Electric Vehicles Growth Hampered By Policy?
India is at a nascent state in the electric vehicle segment due to lower rates of electric production in the country due to less availability of electric vehicle parts, motors, and lithium-ion batteries. The central government is looking to push the demand by focusing on using EV for public and commercial transportation purposes.
Mehra added that the fleet which mainly consists of two and three wheelers operate for almost 18-20 hours per day, which is commendable given that businesses often complain about how electric vehicles are not feasible for scaled-up operations. To deal with charging infrastructure issues, Mehra explained that chargers have been installed by both DOT and its clients for the fleet. Further, the vehicles are also equipped with spare batteries which can be swapped once the existing one loses charge.
Mehra also explained that the DOT fleet could also avail the scheme under FAME II as the vehicles have a range of over 75 km which meets the specification requirements under the scheme.
The adaptation of electric vehicles is the need of the hour. While DOT may have taken the first step to operate the largest last mile electric vehicle delivery fleet, other companies are also looking to enter into the segment in order to protect the environment.
One such player is Bengaluru-based logistics company Shadowfax. In April 2018, the AI-based logistics service provider had announced its plans to use electric light commercial vehicles (LCV) for last mile deliveries.
Apart from logistics, commercial fleet operators such as Ola is also looking to offer electric vehicle services. This will ensure that more number of EVs are present on the roads.
Expanding Beyond India
In terms of plans for expansion, Mehra told us DOT first wants to have a presence in over 17 states in India, and is working towards introducing electric buses in the metros. Internationally, the startup is planning to expand to Southeast Asia and Canada by 2019 and China by the end of 2020.
Apart from logistics, the company is also looking to offer data-based services to other automobile companies to help them foray into the segment. According to Mehra, DOT Global has tied up with Nanyang Technological University (NTU) Singapore for developing charging and battery technologies.
Mehra also said that DOT is yet to raise funding from external investors. Currently, all the investments had been made internally through stakeholders. However, it revealed his plans to raise funding in the second half of this year.
Some interesting statistics about the company:
- DOT is growing at over 50% Y-o-Y
- Currently consists of 500 two wheelers in its fleet
- Operates 125 electric cargo vans
- Presently delivering about 7-9 Mn orders a year
What Does India Need For Success Of EV Ecosystem?
In order to boost the electric mobility in India, the central government launched the second phase of FAME scheme (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles) to incentivise the production of electric vehicles in March.
In its policy, the government has proposed to invest INR 10K Cr ($1.4 Bn) over three years to support 10 Lakh two-wheelers, 5 Lakh three-wheelers, 55K four-wheelers, and 7K buses that operate on lithium-ion batteries or other electric power-trains.
However, the electric vehicle industry has pointed out several loopholes in the policy. One of the major one being the mandate of having 50% of localisation. Mehra too explained that while the localisation aspect is needed to encourage local production of electric vehicles, the problem lies in the timeline. According to him in the policy’s current state, it is not possible for any manufacturer to comply with the localisation ruling as there is a lack of electric vehicle components production in India.
“It (FAME II) is a good policy and there is a big push from the government to Indianise and make things local which I completely support as it reduces cost and makes things easy to create an ecosystem. But I think, you cannot release a policy on March 29th and implement it from April 1st for localisation as it is a bit difficult because we are truly aware of the motor power trained battery technologies are nascent in India,” said Mehra.
Recently, the Society Of Manufacturers of Electric Vehicle (SMEV) also wrote to NITI Aayog saying that the localisation process involves safety tests, checking, vehicle testing will take at least 1-1.5 years. Thus it is too early to link incentives with localisation norms.
Mehra believes that Indian electric vehicle companies need more of a financial push from the authorities. He also added that banks need to step up and invest in electric vehicle companies.
Apart from FAME II Mehra also said that each and every state needs to have an electric vehicle policy of its own as different states have different requirements. The most polluted cities need more focus on EV adaptation. He added that secondary cities can meanwhile work on lower cost vehicles to incentivise people into buying EVs.
“Every state should come out with their policy (EV) which they are working on so that it becomes more centric, today Delhi and metros need it much more than secondary cities.”
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Author: Shreya Ganguly