What Shopee’s breakup with Ninja Van, QuadX in the Philippines means for 3PL firms

In November 2022, QuadX, a Shopee logistics partner in the Philippines and operator of GoGo Xpress, announced that it would be ending its partnership with the ecommerce major in the country after six years.

“We have made a strategic decision to renew our company’s commitment to provide an equitable and sustainable ecosystem for the communities we serve,” said QuadX founder Dino Araneta in a Facebook post about the mutually agreed decision.

Ninja Van’s truck fleets / Photo credit: Ninja Van

In the same month, the cord was also cut between Shopee Philippines and Singapore-based Ninja Van. The logistics firm, however, continues to partner with the Sea Group subsidiary in five other markets: Singapore, Malaysia, Indonesia, Vietnam, and Thailand.

Lai Chang Wen, Ninja Van co-founder and CEO, tells Tech in Asia that the company and Shopee “mutually agreed” to the move.

Logistics firms rode an ecommerce boom during the Covid-19 pandemic as a shift toward online ordering boosted delivery volumes. In 2021, ecommerce platforms contributed around 70% of J&T Express’ total shipments in Indonesia.

But as ecommerce firms seek to control a significant part of the delivery process through in-house logistics, this could eventually reduce their reliance on third-party logistics (3PL) firms.

How will 3PL companies deal with the shift?

Unsustainable prices

Vion Yau, head of insights at venture builder firm Momentum Works, says it’s likely that Shopee’s shipping cost demands became “untenable” for 3PLs, leading to the firms to go their separate ways.

Shopee Philippines had “squeezed logistics costs” for 3PLs, which was made easier since the company runs its own logistics operations, Yau notes.

While Ninja Van’s Lai did not share specifics about the split with Shopee Philippines, the CEO says the logistics firm is “continuously seeking and working with partners” that share its approach of “providing quality and performance at sustainable pricing levels.”

He adds: “Our ability to offer quality service at reasonable rates, which is underpinned by competitive cost structures is part of our core strategy.”

See also: Ninja Van nearly doubles revenue in FYE 2021, while reducing losses

Meanwhile, Araneta has said QuadX will “continue to focus on providing both reasonably priced logistics and ecommerce tools for sellers.” The firm did not comment further when contacted by Tech in Asia.

Doubling down on in-house logistics

A cost and scale advantage

Putting eggs in more baskets

What’s the end game?