Rapidly expanding logistics and last-mile delivery company Bolt Logistics says it is on track to become carbon neutral by the end of its 2023 fiscal year.
Bolt will achieve that goal in part by opting for energy-efficient LED and motion-based lighting in its warehouses. However, the biggest step will come from converting its all-diesel truck fleet to electric vehicles for last-mile deliveries, says CEO Mark Ang.
The first of several 20- to 26-foot EVs are set to arrive from Saint-Jérôme, Que.,-based Lion Electric. Bolt will soon name a second EV provider.
While EVs are more expensive to operate because of their much higher upfront costs, Bolt is buying them “because it’s near and dear to what we want to do and be known for,” Ang says. “We think it’s the right thing to move us forward.”
On the plus side, he says, charging costs for EVs are 90 per cent less than for gasoline-powered vehicles. Maintenance costs are also lower because EVs have fewer parts.
“We want to be fully electric, carbon negative,” he says. “It’s a big, very audacious goal but it’s one that we’ve put stakes in the ground on and we’re going to work to achieve come hell or high water.”
The company will also purchase carbon offsets for deliveries handled by outside companies like FedEx and UPS and the environmental costs of building its EVs.
Bolt’s Canadian logistics operations
Ang describes Bolt as the only fully integrated logistics company in Canada with coast-to-coast operations.
Launched in 2017, Bolt is active in Toronto, Ottawa, Montreal and Vancouver and is planning a major U.S. expansion this year.
In Canada, Bolt has its biggest presence in the Toronto area, with warehouses of 300,000, 134,000 and 100,000 square feet in Toronto, Vaughan, and Markham, respectively. Toronto landlords include Crestpoint Real Estate Investments.
There are two facilities of 30,000 and 100,000 square feet in the Vancouver area (Coquitlam and Richmond), one of which is leased from Pure Industrial.
In Montreal, Bolt has one facility of about 25,000 square feet in Anjou that is rented from Vista Properties. There is a similar-sized facility in Ottawa rented from a local landlord.
Bolt’s $115-million capital raise
In early November, Bolt announced it had raised $115 million in financing, bringing the total funds raised by the company to date to more than $150 million.
The investment was led by new investors Yaletown Partners, with participation from Ingka Investments (the investment arm of Ingka Group, the main IKEA retailer), Northleaf Capital Partners, Bank of Montreal and Kensington Capital, and existing investors including Whitecap Venture Partners, Intact Ventures, MIG and Michael Hyatt.
Bolt does last-mile logistics for IKEA in several Canadian markets. Its clients also include box mattress, home fitness and furniture companies, though Ang declined to name the businesses.
Much of the money will go toward a U.S. expansion, with seven new facilities planned in California, Texas, Florida and New Jersey early this year. Ang would not name the cities, but says the chosen states all have high population densities and are located in areas where clients wanted the company to locate.
Ang has no concerns about venturing into the more competitive U.S. market. Bolt has competed in Canada against Canadian divisions of U.S. firms, “but we still win and I think it’s just because of our integrated nature. Similar to Canada, there’s not really anyone (in the U.S.) that’s national that is fully vertically integrated.”
The $115 million in additional funding will also support an expansion of its staff. Bolt expected to have 1,000 employees in Canada by the end of 2021, in large part by adding additional shifts to existing facilities.
Possible Canadian expansion
Calgary, Edmonton and Regina are potential cities in Canada in which Bolt is considering expansion. However, before launching in those cities, the goal is to ensure there will immediately be multiple clients.
When there is only one client there are ebbs and flows in volume, he says, “but if you have two you can mitigate it and if you have three, four, five it gets better and better. We are holding out on (those cities) because we don’t think we can operate a full-fledged operation that’s in line with what we do in our other markets.”
The company began as a consumer storage business called Second Closet, but became increasingly focused on the more lucrative B2B market. The company still has some of its original self-storage clients, but is not taking on new business in that sector.
Last summer, the company rebranded as Bolt Logistics, a name that shows “this is who we are and this is what we do,” Ang says. “We want to fully electrify our last mile, hence Bolt. The name represents the concepts of electricity and speed.”
Bolt focuses on big and bulky items because they’re “very difficult to get right” but “it’s where we feel we have the most value. It’s where we excel.”
Ang explains that when the company initially launched with a consumer division, employees were safely moving sofas, dressers and dining tables out of people’s homes.
“We cut our teeth on a much harder environment, so we just got really good at it.”