The economics of cargo bikes in city logistics: applications and business models

Growing pressure to decarbonise urban freight has intensified interest in cargo bikes as a low-emission alternative to conventional delivery vehicles. Grubmüller and colleagues provide a structured overview of how cargo bikes are currently used in logistics and of the emerging business models around them. Rather than focusing solely on environmental benefits, the paper examines the economic conditions under which cargo bikes become viable and how they reshape logistics systems.

The study begins with the observation that logistics remains heavily dependent on fossil-fuel vehicles, while cities increasingly introduce zero-emission zones and access restrictions. Technological improvements in electric cargo bikes have expanded their potential far beyond niche applications such as postal delivery. Today, cargo bikes are increasingly seen as part of a broader shift toward right-sized vehicles for urban distribution. The authors therefore map current use cases and analyse the business models most affected by cycle logistics.

A central conclusion is that economic feasibility remains the key driver of adoption. Logistics operates with narrow margins, meaning that cargo bikes must demonstrate clear operational advantages to compete with vans. Regulatory pressure is an additional driver, as restrictions on conventional vehicles make alternative delivery modes more attractive.

The paper identifies several main application domains. In business-to-consumer logistics, cargo bikes are widely used for parcel and e-commerce deliveries, especially in dense city centres where congestion and parking constraints reduce van productivity. In business-to-business logistics, applications include retail replenishment, food and hospitality supply, and service logistics. Additional use cases are found in intralogistics and campus logistics, where short distances and predictable routes support efficient cycle-based operations. Across all segments, cargo bikes perform best in high-density urban areas and when combined with consolidation hubs.

The analysis highlights the emergence of new business models and actors. Specialised cycle-logistics companies are expanding rapidly, while traditional logistics providers increasingly operate hybrid fleets combining vans and cargo bikes. Platform-based delivery services also play a growing role. A key structural shift is the rise of micro-hubs and two-echelon distribution systems, in which cargo bikes rarely replace vans directly but instead complement them within hub-and-spoke networks.

Despite this progress, the paper emphasises important limitations. Cargo bikes have restricted payload capacity and range, making full replacement of motorised vehicles unrealistic. Their economic viability depends strongly on route density, urban infrastructure, and integration with existing logistics systems. Policy measures such as access regulations and dedicated infrastructure may therefore be necessary to enable wider adoption.

Overall, the study concludes that cargo bikes are becoming an important component of urban logistics, but their role is highly context-dependent. Future research should focus on real-world performance comparisons and long-term implementation to better support decision-making in this rapidly evolving field.

Source: Grubmüller, J., Overmeyer, M., Düerkop, S., & Pradella, L. (2025). THE ECONOMICAL APPLICATION OF CARGO BIKES IN LOGISTICS–OVERVIEW OF CURRENT UTILIZATION AND RELATED BUSINESS MODELS. In International Scientific Conference Business Logistics in Modern Management 2025.

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