Delivery trucks have long been a necessary nuisance for everyday life in New York. Now, cargo bikes are being trialled around the city to transport parcels around its streets too. Embraced in Europe for a few years, finally the Big Apple is welcoming the cargo bikes for the festive weeks that are estimated to record an all-time high in demand for deliveries in 2019. The city has approved the trials for an initial six month period, with the possibility of extension for another six, contingent on its success and efficacy.
Megacities are plagued with issues of congestion and are endeavouring to reduce pollution as they grow more conscious of climate change and a desire to improve the quality of life for their residents. Thus, they are constantly seeking new ways to combat challenges posed by ever-more popular online shopping and the inherent consumer expectation for rapid delivery. In response to these trends, logistics companies have been introducing cargo bikes that have been successful in various cities, mostly European cities with extensive bike networks, trying to mitigate issues associated with last-mile deliveries. Where trucks leave behind a considerable carbon footprint, cargo bikes are effectively eliminating the daily emissions and contribute to the ambitions of many logistics companies to become more environmentally friendly. Due to their size and flexibility, bikes allow nimble manoeuvring around dense city structures, park on sidewalks without paying for meters, thus cutting fine costs for parking and time searching for parking spots; and lastly, they are often considered to be safer alternatives to trucks.
Of the 100 cargo bikes deployed by larger providers in the city, 90 are owned by Amazon, with the remaining 10 belonging to UPS (7) and DHL (3). This imbalance is likely due to Amazon’s previous efforts with Prime Now and grocery deliveries allowing them an established dominance in the area, possibly being a testament to their alternative and sustainable last-mile delivery solutions. DHL and UPS, however, have been introducing cargo bikes across several dozen European cities, pointing to a more focused investment on the European continent regarding cargo bikes, and strive to secure a wider foothold within the US market. The aim is for one cargo bike to replace one full truck load of deliveries that typically amount to 2m parcels being rushed and delivered to the five boroughs in New York, consequently taking those trucks off the streets.
Studies have shown that cargo bikes offer great advantages when deliveries are in close proximity to their distribution centres, have low delivery volumes, and need to navigate areas with traffic and dense infrastructures making them more cost effective than trucks. Even though there are significant benefits cargo bikes offer vis-à-vis trucks, particularly during peak seasons in cities; in the vast majority of instances truck deliveries are more effective. According to a study by the University of Washington, if there is a single large batch of deliveries to one major location, it is much more reasonable to utilise trucks as opposed to cargo bikes due to their capacity to carry larger amounts of parcels at once. This highlights one key aspect of trucks that continue to make them an extremely attractive asset even in busy cities; a cargo bike can only carry around 40 parcels, whereas a truck has the capacity to load the truck with up to 400 parcels, making a single destination trip (long distance or not) more worthwhile as opposed to a bike making ten trips. Instead of solely relying on existing distribution centres set up for trucks that have greater ranges than bikes, many have started placing multiple large containers, so-called urban eco package hubs in strategic places across the city.
Complaints are also being raised by business owners and especially truck drivers criticising cargo bikes, saying they “take up already scarce street space and make their work harder”. Other truck drivers in the area add that they deserve to be prioritised due to the investments they have made towards their trucks, pointing to payments of around $10,000 per annum for registration, vehicle fees and insurance.
An age-old problem is to find solutions satisfactory to all parties involved, however, the future seems to hold a promising mixture to optimise supply chains as companies and cities collaboratively implement the best solutions available to them; for the time being, a combination of several resources offering more flexibility will continue to allow better efficiency and help relieve pressing issues within megacities.
Source: Transport Intelligence, December 19, 2019
Author: Dila Cebeci
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)