Feature in Furnace magazine – Delivering the future?

Furnace magazine has written a feature about e-cargobikes.com which we have reproduced below. You can read the original here.

Delivering the future?

Wrapped up in winter coats and scarves, Clare Elwes and James FitzGerald are on the mezzanine level of their latest industrial unit. Hunched over a laptop, they are plotting to solve the headache of ‘last-mile’ deliveries with swarms of electric cargo bicycles. 

Their fledgling business E-cargobikes.com sees itself as an alternative to the ever-increasing numbers of 3.5-tonne delivery vans on city streets. Later this spring a new deal will see riders leaving its hubs in Islington and Notting Hill to deliver groceries in a trial for a second major supermarket chain. Further deals will follow later this year. 

We at SEGRO are well aware of the challenge that businesses face making last-mile delivery work for them and their customers. And as online sales continue to grow, that challenge will attract clever, outside-the-box solutions. 

“Our principle focus is on grocery delivery in urban areas,” says co-founder James FitzGerald, a tousle-haired engineer by training with a background in aviation and motor racing. “But there’s effectively no limit to where this can go. In two years’ time, we’ll be providing last-mile delivery services in all key towns and cities across the UK.” That sounds ambitious, but the wind is in E-cargobikes.com’s sails.

Before the summer’s out, the north London hubs will be followed by additional hubs in the south east and south west of the capital, as well as in Birmingham and Manchester. “By the end of 2019, we’ll have capacity to deliver 1.8m tonnes (of groceries) per annum,” predicts FitzGerald. 

A Cargonaut can deliver as much as a van in an eight-hour shift

The UK is well positioned to embrace electric bike delivery, with its high penetration of online grocery shopping and ever-improving cycle infrastructure. And the nascent sector has ministerial backing. 

In September 2018, the Government announced £2m to support the uptake of e-cargo bikes, to help pave the way for them to replace older, polluting vans. “Encouraging electric delivery bikes onto our city streets will cut traffic and improve air quality,” says Jesse Norman, minister for low emission vehicles.

E-cargobikes.com’s cycles come from German co-operative ZEG Group and retail at around £4,000. Crucially, they are two-wheelers and the storage boxes are barely wider than the handlebars. That means they don’t get stuck in traffic like vans and typical three-wheeled cargo bikes. Nor do they block the roads by double-parking. 

The box on the front can hold 300 litres of ambient products, and Elwes and Fitzgerald add on 130 litres of capacity for chilled and frozen goods on the back.

We are very keen to be a counterbalance to the gig economy’

Through a trial with Sainsbury’s in 2018, the duo have proven that their riders or ‘cargonauts’ can deliver as much as a van in an eight-hour shift. The difference is that while a van makes just one visit to the pickup point and is then on the road all day, a cargonaut keeps returning to the pick-up point, collecting orders for up to six customers each time.

For a grocer without an existing online shopping offer, a deal with E-cargobikes.com would be attractive in part because of the potential for positive PR. For existing e-grocer offers, the conversion will take longer. “Home delivery grocers have built their business model around the 3.5 tonne truck,” says FitzGerald. “It’s very difficult for them to unravel all that. They can’t just flick a switch.”

If the founders – who previously had an e-bike retail business – are right about the uptake, E-cargobikes.com could be good for staff as well as customers. Typically, delivery riders are self-employed, and have no career path. “We are very keen to be a counterbalance to the gig economy, we offer employment on a PAYE basis with benefits as well as career development opportunities,” says Elwes. The cargonauts are fully trained and insured.

“Our clients insist on the very highest standards of service,” FitzGerald adds, “This can’t be achieved using the gig economy business model – our cargonauts are our clients’ brand ambassadors.” 

By mid-summer, there will be 150 cargonauts operating out of Notting Hill. “From this hub we can deliver 58,000 tonnes of groceries per annum,” says FitzGerald. 

And as online shopping continues to grow, we can expect pharmaceuticals and apparel to join the groceries in those bike boxes. For E-cargobikes.com, this is just the beginning.

Take-out: Sometimes the answer could be closer to home than we realise.