And when you factor in the price of a van, the cost of fuel, insurance and depreciation, as well as parking fines and congestion charges, the economics point even further in favor of cargo bikes – so there also appears to be an economic incentive for companies to switch. However, this is where it gets tricky.
A traditional parcel depot is on the outskirts of town and there is a time penalty for a cargo bike, which has less capacity than a van, traveling to and from these locations. To be competitive, the authors of the Paris study concluded, cargo bikes need to be taken to a centrally located micro-hub, from where they can be loaded, delivered and returned multiple times a day. But these micro-hubs are expensive in terms of overhead and labor costs, and it’s only when many deliveries are made from them that the savings in transportation costs can offset the additional costs of operations.
“In order to make cargo bikes economical, you need a high density of people around a distribution center. But that’s also where the rents tend to be the highest,” says Antoine Robichet, co-author of the Pariser Zeitung and a PhD student at Gustave Eiffel University in France. “So if you want to transport all your packages by bike, then your price will skyrocket.”
To overcome this, UPS has been exploring the use of satellite hubs — essentially parking short articulated lorries in neighborhoods and distributing packages from there. Meanwhile, in Prague, around a dozen logistics companies deliver thousands of parcels by cargo bike each month via shared micro-hubs provided by the municipality, sharing running costs among them.
Until they can fix the economics, it’s hard to imagine many big companies releasing cargo bikes on a massive scale. Upfront investment is required for the bikes, their maintenance and depots. Also, larger companies need to adapt their logistics software to direct drivers to charge points throughout the day.
“The existing software is for delivery trucks that pick up early in the day and then deliver for eight hours,” says Nicolas Collignon, co-founder of Kale Collective, a startup focused on technology for cargo bike logistics. “But a cargo bike can’t transport eight-hour deliveries, so the routing needs to be more dynamic.”
In addition, cycling around town rather than driving requires a more athletic profile for the worker and there are additional training costs involved. Because cargo bikes are heavier, wider than traditional bikes, and have larger turning circles, riders need to be taught how to handle them, says Chris Dixon, training manager at Pedal Me.
“If we were in an ideal world and not only considered the costs related to running a business, but also the environmental and social costs like CO2 emissions and road safety, cargo bikes would be much more practical,” says Verlinghieri. “But because these things aren’t taxed, it makes it harder to drive change, as van delivery is a well-established model that allows large companies to make deliveries cheaply.”