E-commerce delivery agents have acquired new-found importance during these times of lockdowns, with online orders becoming a daily exercise especially for urban households. Despite a rapidly increasing delivery load, a majority of delivery agents ride motorcycles carrying multiple packages in their tow. Unfortunately, despite their widespread usage, motorcycles are not suitable for last-mile delivery and restrict delivery providers’ ability to increase their shipment capacity per day. This is where the last-mile delivery segment experiences a major paucity of purpose-built vehicles that are designed to increase efficiency and lower costs of delivery.
In many parts of the world, particularly in Europe, custom-built e-vehicles are becoming a preferred choice for last-mile delivery operators, thanks to growing environmental concerns posed by ICE vehicles. At the same time, introduction of purpose-built products has helped increase penetration of e-mobility in the last-mile delivery space.
A recent study estimated a 50% jump in cargo bike sales in Europe last year with commercial sales growing parallel to private sales. The Indian delivery segment has the potential to replicate this trend if the market offers suitable cost-effective products.
In India, e-commerce and retail giants have pledged to convert their delivery fleets to e-mobility. Simultaneously, the electric two- and three-wheeler categories have seen the introduction of multiple products. Yet the adoption of the same in the last-mile category remains low. What most EV players have overlooked is the fact that the last-mile segment needs purpose-built light vehicles that offer cost-effective solutions for short-distance delivery trips.
E-cycles are a credible alternative to motorcycles for last-mile delivery. Minister Nitin Gadkari has also pitched for the use of e-cycles as a cost-effective and emission-free mode of goods delivery. Speaking in Parliament recently, he underlined that promoting the use of e-cycles for cargo delivery will not only lower expenditure, but also reduce pollution, besides addressing road congestion.
Why cargo e-cycles fit the bill?
Being light-engineered vehicles, purpose-built cargo e-cycles—be these two-wheelers or three-wheelers—can bring with them a series of advantages for short-distance trips.
Firstly, priced much below both ICE vehicles as well as heavily-engineered EVs, they have a much lower cost of ownership.
Secondly, with augmented space for carrying parcels, purpose-built cargo e-cycles can allow riders to significantly increase their shipment per trip capacity, thereby lowering the cost per litre of goods storage space and allowing greater cost optimisation with much higher productivity.
Thirdly, by ridding riders of the pressures of high fuel costs and high maintenance, e-cycles can significantly lower operational costs. Human hybrid power or pedal-assist features further allow users to overcome the issue of range anxiety or torque-on-demand that is commonly associated with other EVs. Not to forget the fact that riding an e-cycle requires neither a licence nor any legal permit (much like a bicycle). In other words, cargo e-cycles are probably the only option that enhance efficiency and productivity with a significant reduction in cost (generally higher efficiency always comes at a higher cost).
Cargo e-cycles can, therefore, fill a major void in the e-commerce logistics space by offering enhanced storage and payload capacity perfectly suited to the needs of short-distance high-density delivery trips. A switch to a cargo e-cycle implies considerable savings in capital expenditure as well as in operational costs, along with greater resource-optimisation. For example, for a delivery agent who currently delivers an average 40 shipments a day, a purpose-built cargo e-cycle can take this number up to 70-75. It also improves convenience and safety by eliminating the need for delivery agents to carry heavily-loaded backpacks on their shoulder while riding.
With e-commerce and retail giants having pledged to convert a significant part of their mobility needs to e-mobility, the need for purpose-built low-cost EVs will be felt in the coming years. A study by the World Economic Forum estimates that the demand for last-mile delivery is expected to increase by a whopping 78% by 2030 across the world. Not only will this increase congestion on roads manifold, but will also increase carbon emissions by 30% (if ICE engines continue to be used). Shifting to e-mobility, therefore, not only makes economic sense, but also environmental sense.
Author: Aditya Munjal, Director, Hero Cycles and CEO, Hero Lectro