Europe's New Rules for the Road
Drone delivery heats up, Uber/DPZ stock analysis, reverse logistics get messy
Who knew $12.7 billion in sales could be disappointing? That seems to be the sentiment, as Prime Day wrapped up with “only” 6.1% YoY growth. Speaking of big numbers, the EU unveiled new weight limits to encourage EV deliveries, and Domino’s stock truly popped after yesterday’s announcement with Uber Eats.
Today:
EU’s Latest Push to Green Delivery
Drone Delivery Startups Air Grievances
Chart Time | Uber Up, Domino’s Even More Up
Loop’s The Leader in Return Logistics Coup
POLICY | New EU Weight Limits Encourage EV Trucking
After long tying itself to dirty diesel, in recent years Europe has been making moves to transition its cars and trucks towards greener fuel sources. Much of it has been familiar “carrots” like subsidies for EVs, and “sticks” like a looming ban on gas-powered vehicles set for 2035. Along the way, member countries are also speeding adoption with measures like Germany’s recently opened electric truck corridor. But one issue has slowed adoption: overly stringent vehicle weight restrictions.
The Big Picture: An update to the EU Weights and Dimensions Directive now means that EV and hydrogen powered haulers can weigh an extra 2-tonnes more than their gas-powered counterparts, a provision that means green fleets will no longer be penalized for the weight of the batteries on-board. Given how much heavier an empty battery-powered vehicle is than a gas one, the previous law made it uneconomical for EVs to transport a meaningful amount of goods. We’re already seeing traction, as Toyota has announced an increased push into Europe, and more Rivians are hitting European streets. Now let’s just see if this will trickle down to van regulations as well, and if the Italians will play nice…
DRONES | Aerial Delivery Patent War Heats Up
A number of startups — Wing, Flytrex, Zipline, Flyby — are working to take delivery to the skies, as they envision drones moving food and goods from businesses to consumers. But unless customers have a huge yard they don’t mind their sandwiches or shoes being dropped in, how to receive the delivery is a bit of an open question. A number of companies have proposed “drone mailboxes” — where the drone could land on top, and the item is transitioned to a locker for customer retrieval.
The Big Picture: The stakes are getting higher, as “drone port” maker Valqari has filed a new patent, looking to broadly cover the concept. While the company seems to single out competitor Arrive (née Dronedek) as an infringer, the startup also has its sights on a number of other large drone players. If an IP war breaks out, or if a number of startups have to cough up licensing royalties, expect a further cooling of interest in a delivery method already often derided as pie in the sky.
Chart Time | Who Wins in Uber, Domino’s Tie-up?
Yesterday, Uber and Domino’s shocked the industry by announcing a partnership that would put the venerable pizza brand in the Uber Eats marketplace. But with DPZ maintaining control of the deliveries, this is shaping up to be more of a marketing play, providing a new way for customers to order pies. Industry experts think that under that arrangement, Uber will likely make no more than a 5% cut per order, little better than a credit card processing fee. Looking at how the stocks have performed since the announcement, the market seems to think this is a bigger win for Domino’s (black line) than Uber (blue line.) The pizza maker is up around 17.5%, while the app co has gained about 8.5%. Can’t beat the wisdom of the crowd!
RETURNS | Reverse Logistics Industry Shakeup
Returns can be a nasty business for any delivery brand, tallying up to 16.5% of sales, meaning $800 billion directly down the drain, plus many billions more spent handling and processing those returns. A number of startups have tried to simply the process: some like Happy Returns build muti-brand return centers, while others tinker on the software side: encouraging consumers to instead do an exchange, optimizing reverse shipping, increasing self-serve options, etc.
The Big Picture: That latter category just got considerably consolidated, as Affirm offloaded its Returnly platform to market leader Loop. With the BNPL player deciding to concentrate on its core payments business two yers after buying Returnly for $300M, Loop gets to add 1,500 new merchants to its existing 2,200 strong base. With increased scale, reverse logistics might just get a little less messy for all parties involved.
A Few Good Links
Merchants hoping now’s the time for swipe fee reform. Retailers reveal shared hunger for data at NRF Nexus. ItsaCheckmate announces Reconcile - tool to tie together 3PD reporting data. BWW expands “Go” delivery-focused concept. Nikola inks contract to sell up to 50 hydrogen trucks. Prime Day disappoints as sales rise only 6.1%.
Got a tip, feedback, or just want to say hi? Reply back to this email.