When you factor in the price of the van, fuel costs, insurance and depreciation, plus parking fines and congestion charges, the cost-benefit calculation tilts even further in favor of cargo bikes — so there also seems to be a financial incentive for companies to to convert. However, this is where it gets tricky.
A traditional parcel warehouse is located on the outskirts of a city, and for cargo bikes that carry less passengers than a van, the time it takes to travel to and from these locations is lost. To be competitive, cargo bikes need to deliver goods to centrally located micro-hubs, where they can be loaded, delivered and returned multiple times a day, the authors of the Paris study concluded. But these micro-hubs are very expensive in terms of overhead and personnel costs, and it is only through mass deliveries that the savings in shipping costs can make up for the extra costs of running the operations.
“To make cargo bikes affordable, you need a high density of people around the distribution center. But that’s also where rents tend to be the highest,” said Antoine Robichet, a co-author of the Paris paper and a doctoral student at the University of Gustave Eiffel in France. “So, if you want to take all the packages on a bike, your prices will skyrocket.”
To overcome this problem, UPS has been experimenting with satellite hubs—essentially parking short articulated trucks in neighborhoods and distributing packages from them. In Prague, meanwhile, about a dozen logistics companies use a shared micro-hub provided by the city council to deliver thousands of packages a month on cargo bikes, splitting operating costs.
It’s hard to imagine many big companies launching cargo bikes on a large scale until they can solve their economic problems. Bicycles, their maintenance and storage all require upfront investment. Additionally, larger companies need to adapt their logistics software to be able to route passengers to reload points throughout the day.
“Existing software works for a van that picks up at the beginning of the day and then makes an eight-hour delivery,” said Nicolas Collignon, co-founder of Kale Collective, a startup focused on cargo bike logistics technology. “But a cargo bike can’t deliver. Eight hours of cargo, so the route needs to be more dynamic.”
Plus, cycling through cities instead of driving requires workers to be more athletic, and the cost of training them increases. Because cargo bikes are heavier, wider and have a wider turning range than conventional bikes, riders need to be taught how to operate them, says Chris Dixon, training director at Pedal Me.
“If we were in an ideal world, we had to consider not only the cost of running a business, but also environmental and social costs such as carbon dioxide2 Emissions and road safety, cargo bikes will be more viable,” Verlinghieri said. “But because these things aren’t taxed, it’s harder to push for change, because van delivery is an established model that enables big companies to deliver in an affordable way. . “