• Health, disability and wellbeing
• International development
• Climate change and environment

Delivering Value: the economic costs of freight

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This analysis compares the social, environmental and economic impacts of diesel and electric vans with e-cargo bikes. 

The report finds that diesel vans are 67 times more environmentally damaging when air, water and noise pollution as well as climate change are taken into consideration. When these environmental costs are combined with social costs, the report finds that the hidden costs associated with diesel van deliveries are £2.46 billion annually in London alone.

Yet e-cargobikes are more expensive than vans on a like-for-like basis, incentivising consumers and businesses towards the least sustainable option. The research, commissioned by Team London Bridge and funded by Impact on Urban Health, explores the reasons for this and provides an estimate of fair pricing were a level playing field to exist between e-cargobikes and diesel vans.

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Transport is the largest emitting sector of greenhouse gas emissions in the UK and rapidly needs to reduce emissions if net zero targets are to be met. Freight makes a significant contribution to these problems, and it is set to grow in absolute and relative terms.

E-cargobikes are one such sustainable alternative, especially for last mile deliveries. Yet their growth is slow and a modal shift in freight is some way off if current trends continue. A major barrier to their adoption is that courier deliveries by e-cargobike are more expensive than diesel vans on a like-for-like basis. The main reason for the price differential is that most van drivers are independent contractors that lack employee benefits and are expected to cover many operational costs, like purchasing the delivery vehicles and fuel. In contrast e-cargo bike riders are usually employees with all costs being borne by the courier company.

As well as estimating the hidden social and environmental costs, the report calculates the cost of an average van delivery if these costs were not outsourced to the driver. It finds that an average delivery in central London by diesel van would need to cost £6.42 if full economic costs, including VAT, were covered by the courier company. This is considerably higher than the £2 per delivery that some van courier companies are charging. The corresponding figures for deliveries by electric van and e-cargobike are £5.68 and £4.98, respectively. This shows that were vans and e-cargobikes operating on a level playing field the e-cargobikes would be a cheaper as well as a more sustainable option.

Scaling up e-cargobikes requires intervention and the report provides recommendations for the London Assembly and National Government that would support this process.

“London is one of the most congested of Europe’s major cities. More than 20% of our roads are taken up by freight, deliveries, and other commercial vehicles. Many of these are diesel vehicles that are worsening London’s air quality and contributing to climate change. We urgently need a shift to greener deliveries, such as e-cargo bikes”

London Assembly Member, Hina Bokhari

“It makes no sense that e-cargo bike courier deliveries are more expensive than vans on a like-for-like basis, given their health, wellbeing and climate benefits. We urgently need interventions to create a level playing field for our sector so that the growth in freight does not come at the expense of our health or climate”

Director of e-cargo bike operator Ecofleet, Farah Asemi

“As a business we’re committed to reducing our carbon footprint and achieving net zero by 2030. The carbon benefits of using cargo bikes for our office supplies deliveries are therefore obvious, but we have also found that clients are very interested in the other benefits of reduced noise and congestion around their buildings. Partnering with a supplier who uses cargo bikes for deliveries is a good example of how a small change in procurement can drive real environmental impact.”

Tom Mockridge, Director of Strategy and Innovation for Recorra
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