Cost of Business
Even in areas where city centers are accessible, using vans and trucks for delivery is becoming increasingly expensive. In Canada, in 2006 alone, three major express delivery companies (FedEx, United Parcel Service and Purolator) were awarded 34,000 parking tickets amounting to approximately $1.5 million in fines. In the London Boroughs of Westminster and Camden, TNT reported that it was facing £300,000 per annum in fines. Congestion charges in London alone will also cost TNT Express Services an average of £15,000 a month. In total, TNT will have to absorb £250,000 a year in charges if London extends its congestion zone.
Working With the Trend: Cargo Cycles
Cargo Bicycles may just prove to be the solution these days. Research by the German Institute of Transport found that e-cargo bikes could take care of 85% of deliveries in Berlin. Similar studies in Breda (the Netherlands) have found that of the 1900 trucks that go in everyday, less than 10% of the cargo being delivered requires a truck and 40% of deliveries involve one box. It would appear that Cargo Cycles can help freight companies rid themselves of unnecessary motorized delivery trips within the supply chain.
Within urban areas, cargo cycle companies are also offering services which are generally cheaper and often able to deliver using the same time frame. In April, 2012, the Cambridge based Delivery Company, ‘Outspoken Delivery’ was able to deliver 17,000 magazines to 430 locations in 2 days for a total cost of €800. No other motorized service provider was able to do so at a comparable cost.
Other reasons companies are using cargo cycle delivery is because it’s reliable. A report from the ITF found that Costs of unreliability may rival those of congestion. The majority of clients using such services do so because they say they’re certain that it can get there on time. Companies such as TNT, KMPG, Ernst and Young, Phillips, Fed-EX have already started integrating cycle companies into the delivery chain for this very reason.
Package size is also getting increasingly smaller. Retail giant, FNAC has stated that average package size for internet orders is approximately 500 grams, making cycles the perfect solution for last mile delivery especially. Global E-Commerce sales will reach $963 billion by 2013, growing at an annual rate of 19.4% and by 2014, E-Commerce will increase by 90%.
So how do you get goods out of trucks and onto bicycles? “Outspoken Delivery” from Cambridge has developed a delivery model.
Using their office/workshop as a hub, companies drop off their deliveries (up to 25kg) for the inner city center early in the morning. Throughout the day, they can deliver the ‘last mile’ using their range of freight bicycles. This proves ideal in a city like Cambridge where delivery vans are not allowed in the city from 10am to 4pm.
The eventual vision is to have these hubs strategically throughout the city with delivery by van/lorry will be to hubs on the major roads surrounding the city, such as Park & Ride sites. From there, the ‘last mile’ will be delivered by a range of bicycles and electric vehicles. The bigger freight bicycles can also act as mobile hubs, allowing the smaller freight bikes to carry out deliveries in specified areas.
There’s also another approach adopted by Urban Cab, a company based in Paris, France.
Suppliers have all their goods presorted at logistic centers and then packed into containers which fit onto specially designed bicycles. These containers are transported to the edge of the city, scanned and loaded onto the back of bicycles for the quickest most efficient routing, effectively avoiding any resorting of goods.
Last year, Urban Cab was also developing a system where throughout the day, customers can choose a fixed location at various points across the city to pick up their goods. The bicycles simply park (for free) in a fixed location saving customers the hassle of having to be at home when their goods are delivered
What is clear is that new delivery models are likely to arise as more and more companies take to using cargo bicycles to deliver. This year more than more than 30 companies from across Europe have launched a European Cycle Logistics Federation (ECLF), aimed at improving urban bike deliveries and lobbying for cycle-based delivery policies.
Also available at Eltis