Blitz Mobility Stimulates the Logistics Industry Through Integrated Solutions and Electric Vehicles

Based on reports e-Conomy SEA 2022, output the carbon generated from digital channels can actually be lower than businesses with traditional sales channels if optimized. One way is through the use of electric vehicles.

This report reveals, to reduce carbon footprint e-commerce, logistics players who are one of the main backbones of this industry, can utilize electric vehicles to manage shipments last mile and consolidating operations to the model satellite distribution.

The above scenario is being realized by Blitz Electric Mobility, a startup that develops logistics management solutions supported by electric motorbike fleets for the B2B segment. Blitz was founded by Saivya Chauhan in 2019 and started operating in early 2022. Through the solutions developed, Blitz seeks to answer ESG demands from its business partners.

Logistics solutions and electric vehicles

Blitz Electric Mobility is a 4PL service provider that offers integrated logistics services, both courier and delivery scheduling. There are two main business models. First, developing a logistics solution end-to-end to help clients improve operational efficiency and goods delivery.

In ensuring efficient operations, Blitz implements AI technology to optimize driver and fleet performance. In addition, this solution is also said to be able to optimize routes, perform smart scheduling, and earn insight supported by data management tool.

Second, Blitz also provides electric vehicles supplied and financed by OEM partners. This electric vehicle can be owned by a courier with a scheme lease-to-own within 3-4 years. The payment is also taken directly from the courier's income. Meanwhile, this electric vehicle is supported by fleet management solutions and telematic SaaS data.

"We have value proposition on the ability to guarantee higher margins per shipment. The way through logistics tech stack us, combined with machine learning, AI, and modeling predictive algorithm. We do not compete with other logistics companies. Our focus is B2B partnerships, integrations seamless pattern with their operations so they can deliver low-margin shipments to us. This benefits both parties and can drive industry growth," said Blitz Electric Mobility Founder and CEO Saivya Chauhan.

In integrating its solutions into client operations, Blitz aims to increase shipment volumes or reduce the time needed to complete deliveries.

He gave an example of a client from a pharmacy who made an average of 5.000-7.000 deliveries per month. After working with Blitz, he claims the company has increased its shipment volume per month to 10.000-12.000. In another example, one technology company was able to save up to 16% to 2,5 hours on frozen meat deliveries from its original 3 hour delivery time.

Penetration strategy

Refer to the latest report AC Ventures and the Electric Mobility Ecosystem Association (AEML), the domestic electric vehicle market has been hampered by a number of challenges ranging from limited production ecosystems, battery infrastructure, to local supply chains.

Currently, network charging station and battery swap there are not many electric vehicles due to the high cost of investing in battery charging/exchanging infrastructure. The price of electric vehicles is also not cheap, while there are not many financing options. The specifications are limited so that they cannot meet the needs of many riders. As of 2022, there are only 439 high-powered general charging station in 328 location points and 961 BSS in Indonesia.

The issues above were experienced by Blitz in introducing the concepts of electric mobility and sustainable logistics to potential users. He admits that most clients prioritize the speed and low-cost aspects of shipping, regardless of the delivery method.

In addition, he said, the limitations of battery technology make it difficult for each brand of electric vehicle to operate throughout the city due to the availability of different types of batteries and charging stations. And this is the issue that potential buyers/users are most worried about.

"They cannot use existing charging stations and prefer those that are compatible with their vehicles. The lack of infrastructure and inappropriate designs makes it difficult for the electric vehicle market to develop," he said.

Several strategies have been prepared by the company, including working with the OEM ecosystem through a leasing scheme. With this strategy, Blitz admits that he can choose a vehicle model that suits his needs, considering that not all models can meet the requirements, such as battery type and cargo delivery. Currently, there are more than 100 different electric motorcycle manufacturers in Indonesia.

Then, his party provides incentives to drivers, including providing support in the form of BPJS, training, to ownership programs with schemes lease-to-own. By using tech stack internally, Blitz can assign clients the number of drivers in a day.

"Less than 30.000 units of electric vehicles were sold in 2015, a far cry from gas-fueled vehicles which sold 5,52 million units in 2022. Our OEM partners recognized difficulties with sales in the market, so they agreed to work with us through a lease scheme for deploy their vehicle units in the field."

Blitz has worked with 35 clients, incl Grab, Lazada, and Paxel, from various sectors including logistics, e-commerce, F&B, transportation, retail, Grocery and agriculture, coldstorage, pharmacy, to banking.

Earn EBITDA

Currently, said Saivya, Blitz still relies on internal funding to operate because it has already made a profit. Blitz has been operating since February 2022 and claims to have achieved EBITDA a year later.

The company pocketed a monthly revenue growth of 16% with retention and conversion rates of 100% respectively. That is, Blitz did about how to work before working with clients. The average shipment per month reaches 300 thousand with a courier performance level of up to 50% better.

"We do not depend on external funding to operate. Our focus from the start has been on building a sustainable business model. This approach has enabled us to pursue growth without burning money," he said.

According to him, it is difficult for startup players to obtain funding agreements from VCs, so they need to remain resilient and avoid decisions that end in failure tech winter last year.