Cargo Bikes as a potential solution for sustainable urban logistics: a case study in Tirana Faculty of Civil and Industrial Engineering Department of Civil, Constructional and Environmental Engineering Master Degree in Transport Systems Engineering Candidate Gleardo Terziu - 1777838 Supervisor Prof. Andrea Campagna A.A. 2018-2019
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Cargo Bikes as a potential solution forsustainable urban logistics: a case study inTirana
Faculty of Civil and Industrial EngineeringDepartment of Civil, Constructional and Environmental Engineering Master Degree in Transport Systems Engineering
CandidateGleardo Terziu - 1777838
SupervisorProf. Andrea Campagna
A.A. 2018-2019
I
Contents Page
CONTENTS ............................................................................................................. I
FIGURE CONTENTS .......................................................................................... III
TABLE CONTENTS ............................................................................................ IV
1 INTRODUCTION ............................................................................... 1 1.1 Problem description ...................................................................................... 1
1.2 Research question .......................................................................................... 3 1.3 Statements and hypothesis ........................................................................... 3 1.4 Purpose of the thesis ..................................................................................... 4
1 Methodology division ................................................................................................. 5 2 Copenhagen Illum Department Store ....................................................................... 9 3 A typical carrier of 1910 (Bergrijer Brother, Amsterdam) ................................... 10 4 Long-John, Denmark 1920 ........................................................................................ 10 5 Usage of cargo bikes in Europe (Lenz & Riehle, 2013) ........................................ 12 6 Logical process of the questionnaire ....................................................................... 18 7 Detail of the “Supplies” process of the questionnaire .......................................... 20 8 LSI evaluation process .............................................................................................. 22 9 Tirana Road Map (Urban planning project JCIA Studio Team) ........................ 31 10 Cargo-Bikes used for city cleaning service in Tirana (EcoVolis) ....................... 32 11 New dedicated lane for bikes in Tirana (Tirana Municipality) .......................... 33 12 New urban buses 100% electrical (Tirana Municipality) .................................... 33 13 Depot location ............................................................................................................ 50 14 Depot layout ............................................................................................................... 51 15 VELOVE, electric cargo bike (case used by DHL) ............................................... 55 16 Example of electric Cargo Bike operations ............................................................ 58 17 Example of courier walking operations.................................................................. 59 18 Example of electric Cargo Bike route per tour ...................................................... 59 19 Example of courier walking route per tour ........................................................... 60 20 Cost benefit analysis .................................................................................................. 61 21 Linear depreciation of e-Cargo Bikes ...................................................................... 64 22 Break Even Point graph ........................................................................................... 69 22 ‘Before’ Scenario representation .............................................................................. 70 23 ‘After’ Scenario representation ............................................................................... 71 24 Impact areas performance ........................................................................................ 81
IV
Table contents Page
1 Number of criteria and indicators per impact area ............................................... 24 2 LSI Indicators categories ........................................................................................... 25 3 Random Consistency Index (RI) ............................................................................. 28 4 Traffic counts in the study area (Tirana Open Data) ........................................... 34 5 Traffic flow during last three years ......................................................................... 35 6 Time-Window Traffic Limited Zone (Municipality of Tirana) ........................... 36 7 Population of Retail chains and brand sector ........................................................ 37 8 Population of Independent Retail Sector ................................................................ 37 9 Establishment characteristics of the study case ..................................................... 39 10 Average size of the Establishments & Depo in ‘Blloku’ district .......................... 40 11 Employee number per category ............................................................................... 41 12 Supply chains identified in the study area ............................................................. 44 13 Number of deliveries per year for brand retail sector .......................................... 46 14 Summary of actual scenario ...................................................................................... 47 15 Urban supply chains suitable for the UCC ............................................................. 48 16 Freight volume demand ............................................................................................ 50 17 Handler working time-table ..................................................................................... 53 18 Cost indicators of the proposed project .................................................................. 62 19 Depot installation costs ............................................................................................. 65 20 Re-charging costs ........................................................................................................ 67 21 Aggregated annual cost of the project .................................................................... 67 22 Project financial benefits ............................................................................................ 68 23 Before and After scenarios summary ...................................................................... 71 24 Logistics sustainability index indicators ................................................................. 72 25 Values of the LSI indicators in ‘Before’ scenario ................................................... 75 26 Values of the LSI indicators in ‘After’ scenario...................................................... 76 27 Air emission indicators .............................................................................................. 78 28 Annoyed level of the population for noise pollution ............................................ 79 29 Performance of the impact areas in the ‘Before’ scenario ..................................... 80 30 Performance of the impact areas in the ‘After’ scenario ....................................... 81
1
1. INTRODUCTION
Urban freight distribution is considered the least efficient and the most difficult,
expensive and polluting part of the supply chain. The urban freight distribution is
often hampered due to limited traffic zones, narrow streets and lack of parking slots.
Among the economic costs the externalities caused by commercial vehicle are very
dangerous. Tirana is one of the most polluted cities in Europe and the main cause is the
road traffic externalities.
New sustainable solutions must be developed to reduce the negative effects of this
activities to the environment, life quality and economy. A successful new mode that is
tested lastly in Europe, is the urban freight distribution using electric cargo bikes.
Based on the pilot projects conducted in different cities in Europe an estimation of 51%
of all goods, delivered in the cities can be switched from traditional fueled vehicles to
e-cargo bikes.
1.1 Problem description
The increase of the urbanization and the technological evolution (e-commerce) is
increasing the challenges of urban freight distribution. People want every day more
goods to be delivered and picked up in their places. The open market competition makes
clients raise their requests to speed and time windowed. On the other hand, the logistical companies aren’t updating as fast as the increase
demand and its new requests. Traditional ‘fueled track’ remain the dominant transport
mode.
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The actual demand with its updated requests and the lack of real updates on the urban
distribution by the logistic companies is leading to a ‘Lose – Lose’ scenario for both the
companies and the population.
Usage of the traditional supply chain has negative effects on urban-life quality
⋅ noise pollution
⋅ air pollution (CO2, NOX)
⋅ traffic congestion
⋅ illegal and dangerous parking
In the other hand we have the effects urbanization and the urban policies that the
municipalities are developing to improve the life quality such as:
⋅ narrow urban streets
⋅ traffic congestion
⋅ lack of parking
⋅ limited/restricted traffic zones
These effects are making last mile logistics the most expensive and fatigues part of all
supply chain.
Logistic companies are trying to take measures in their supply chain in order to:
⋅ adapt new urban policies
⋅ reduce cost
⋅ fulfill the demand
Mostly the way out is founded in the renewal of the fleet with electrical tracks but
again their size is a lack that doesn’t:
⋅ enter limited/restricted traffic zones
3
⋅ find parking
⋅ adapt with narrow streets
In some avantgarde cities, we have some examples of the usage of ‘Cargo-Bikes’ for
last mile logistics. The lack of studies is an important reason that prevents the wider
usage of these vehicles.
1.2 Research question
To investigate and structure the studied situation a research question followed by a set
of hypotheses has been developed. The focus of the thesis is:
⋅ Productivity
⋅ Level of service
⋅ Environmental impact
The research question is formulated as follows:
Is Cargo-Bike a potential solution to make urban freight more sustainable?
1.3 Statements and hypothesis
Statement 1: Cargo bikes can take shorter routes and avoid traffic congestion and have
the potential to increase the LOS in terms of on-time deliveries.
Hypothesis 1: Cargo bikes increase productivity and LOS
4
Statement 2: Cargo bikes do not emit CO2 and they reduce traffic congestion so
decrease the CO2 emission of other vehicles
Hypothesis 2: Cargo bikes reduce CO2 emission
Statement 3: Cargo bikes are cheaper to be purchased and to be maintained. Their
charging costs are much lower than vans fuel and they perform shorter routes.
Hypothesis 3: Cargo bikes reduce delivery costs
1.4 Purpose of the thesis
The goal of this thesis is to analyze whether a new model of urban distribution that
includes Electrical Cargo Bikes is efficient in freight urban distribution. This research
will be based on similar experiences and projects in different European cities. The
study will be focused on freight distribution in one of the densest populated zones of
the Tirana, Blloku district. The efficiency is evaluated in terms of productivity, LOS,
environmental impact and economical costs. In additional, this research will highlight
the factors that influence in the understanding the challenges and benefits related to
the implementation of this new distribution model in the urban areas. The results of
this thesis will determine whether proposing this new model is efficient or not.
1.5 Methodology
The methodology of this work is divided in three main parts. The first step of was the
reveal of the current situation in the study area. The data collection is based on a deep
5
investigation of the study area, by developing a survey tool for understanding freight
behaviors and impacts in Functional Urban Areas. The methodology of this survey is
based on similar methodologies used for sustainable urban logistics planning and
freight transport project but is adapted to cover exactly the needs of this thesis.
The second part is the formulation of the new supply chain that will be served with
electrical cargo bikes. This part will include the selection of the depot location, vehicle
selection, logistic operations, simulation of the network and the calculation of the
number of vehicles needed. Also, in this part a business model analysis is included to
evaluate whether the project implementation is worthy or not.
The last part of the thesis includes an ex-ante evaluation. ‘Before’ and ‘After’ scenarios
will be compared based on Logistics Sustainable Index.
Figure 1. Methodology division
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2. LITERATURE REVIEW
In this chapter is aimed to identify the key literature on this field. There are many
similar cases over the world that concern in the implementation of e-cargo bike in
urban freight deliveries. The experience on the priviest cases states the importance of
the implementation of these vehicles in urban logistics. There are no studies that has
evaluate this mode in the Albanian market.
2.1 Last Mile Logistics
Last mile logistic distribution system is the final step of the supply chain which needs
carefully investigation in order to efficiently and economically deliver goods to
customers. The Last Mile in the supply chain is considered as the last part of the
supply chain for the direct-to-consumer market. In supply chain logistic operations.
Last Mile refers to the last part of physical goods delivery process which involves a set
of activities that are necessary for the delivery process from the last transit point to the
final drop point of the delivery chain. The Last Mile is critical because it is responsible
for the final delivery of products to customers and is typically a source of high amount
of costs of delivery chains. (Aized & Srai, 2014)
City logistics is the term used to denote the specific logistic concepts and practices
involved in deliveries in congested urban areas, the ‘‘last mile’’ transport, with specific
problems such as delays caused by congestion, lack of parking spaces, close interaction
with other road users, etc. (Munuzuri, Larraneta, Onieva, & Cortés, 2005)
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The process for totally optimizing the logistics and transport activities by private
companies in areas while considering the traffic environment, the traffic congestion
and energy consumption within the framework of a market economy. Moreover, city
logistics is based on general knowledge about issues including distribution costs, and
social and environmental costs. The goal of city logistics is to reduce both and make the
whole system more effective. (Taniguchi, Thomson, Yamadi & Van Duin 2001)
The last mile is considered the more expensive, least efficient and most polluting part
of the entire supply chain (Gevaers, 2011) Factors that affect these high proportions are
due to inefficiencies, such as traffic (e.g. traffic jams, heavy congestion), and time spent
on handling of goods at multiple locations. The last mile often hinders city logistics
and supply chains in high-populated areas. For example, due to regulated traffic speed
and intensity (e.g. rush hour, low emission zones, etc.), limited parking and unloading
space (Aized & Srai, 2014).
The actual supply chain has negative effects on urban-life quality as noise pollution, air
pollution (CO2, NOX), traffic congestion and illegal and dangerous parking in the other
hand we have the effects urbanization and the urban policies that the municipalities
are developing to improve the life quality such as narrow urban streets, traffic
congestion, lack of parking and limited or restricted traffic zones. These effects are
making last mile logistics the most expensive and fatigues part of all supply chain.
2.2 Importance of delivery
Delivery can be considered the most delicate phase of the supply chain. The client’s
evaluation is highly based on the delivery service. During time a lot of measures to
improve this phase are been taken but the clients has become more and more difficult to
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be satisfied and the companies are obligated to satisfy them as service is the key
competitor for the companies trading the same product. Varying delivery options and
its perceived quality are highly sensitive criteria for the clients. Based on their request
we can identify four types of clients:
⋅ Clients who seek for the cheapest delivery method
⋅ Clients who seek for Same-Day-Delivery
⋅ Clients who seek for Time-Window-Delivery
⋅ Clients who seek for Instant-Delivery
Even if the increasement on Same-Day-Delivery, Time-Window-Delivery or Instant-
Delivery studies has notice the client’s choice based on cheapest delivery keeps the
majority with 50%.
Delivery success is based in three main factors: cost, efficiency and transparency.
⋅ Cost: Last mile logistics cost are considered to be up to 30% of the total
delivery cost and some time they may be exceeded.
⋅ Efficiency: To be efficient is important to satisfy the clients need for fast
and economic delivery. The increase the efficiency a good management of
the supply chain is needed and the key phase in las mile logistics.
⋅ Transparency: The clients wants to track their product so for this reason
the companies generate tracking code in order to check delivery status.
Nowadays the tracking code is not enough, and the clients want to follow their order in
real-time. The clients want information for the driver’s location and time window with
at least four hours in order to wait in their zone.
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2.3 Usage of cargo bikes
The first usage of cargo bikes is known as 1877 in England. James Starely was the first
that build a three-carrier design for transportation of people or goods. The first
documented usage was for the purpose of urban postal delivery. In 1920 in Denmark
cargo bikes were the main transport mode used for Copenhagen Post and Telegraph
Service messengers, with two wheeled bicycles and three wheeled tricycles (Klepfer,
2012). This mode was also used by several companies in the country, such as the Illum
Department Store and the Byposten messenger company, to manage business logistics
(Colville-Andersen, 2012).
Figure 2: Copenhagen Illum Department Store
Cargo bikes were comprised of both commercially manufactured models and self-
adapted vehicles (Decker, 2012). The most popular model in Holland and Scandinavia
was the “Bakfeitsen” (box bike) which was a modified design of a cargo trike (Klepfer,
2012).
10
Figure 3: A typical carrier of 1910 (Bergrijer Brother, Amsterdam)
The Long-John which first appeared in Denmark in the late 1920s was considered the
most practical cargo bike for speedy deliveries with heavy/bulky goods. It is equipped
with a steering mechanism comprised of a tie-rod passing under the platform (Decker,
2012).
Figure 4: Long-John, Denmark 1920
The “bakery bikes” or “butcher bikes”, famous in the UK in the 1930s, were another
form of cargo bike with front-fixed boxes or baskets used for the delivery of goods
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such as bread, meat, vegetables, fruit, and dairy products. In the United States the first
cargo cycles were manufactured in 1898 by a company called “Workman Cycles” and
were used by the post office for warehouse work as well as by the Good Humor Ice
Cream Company for vending purposes. From 1939 to 1967, “Cycle Trucks” became the
most popular in the U.S. whereby 10,000 units were sold during World War II (Klepfer,
2012).
Starting from the mid-twentieth century there was a market decline in the use of
bicycles for urban deliveries of goods, due to factors as: greater availability of cars and
vans, comparatively lower operating costs per unit carried of cars and vans, and the
growing suburbanization of urban areas (Leonardi, Browne, & Allen, 2012). Different
with the present, the focus was on speed, environmental issues were less of a problem
at that time (Maes & Vanelslander, 2012).
Cargo Bike, as known today, can be a two or three or four-wheeled vehicle that is
operated entirely by human power or with an electric assist (e-Cargo Bike) (Kamga &
Conway, 2013). It is a zero-emission alternative to light freight vehicles, which are
⋅ The average walking speed for couriers is considered to be 7 mps (half of
the normal walking speed 1.4 mps, as they carry hand trucks)
⋅ The average time to perform a delivery operation is considered to be 7.5
min (based on the data obtained by the survey)
⋅ Time to load/unload the containers to the bike’s module is considered to
be 5 min per operation.
⋅ Time to unload the orders from the bike to the hand truck is considered 2
min per order
⋅ Lost time to park and start up is considered 2.5 min per operation
⋅ Annual working days are considered 283 day
Reserved parking slots:
In the zone there are going to be 27 reserved parking slots for unloading operations
and parking the bike. The parking slots are equally distributed in the zone 350 m from
each other. The dimensions of the bike doesn’t prevent the other vehicles to use the
unloading parking slot. The bike can be parked and locked in a safe way in the parking
slot. And the courier can deliver the goods using a hand truck that is available at the e-
Cargo Bike.
The average distance of the parking slots with the depot is calculated to be 2.5 km.
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Delivery points and orders:
There are 131 delivery points per day in the study area, to simplify the simulations it is
assumed that all the delivery points are equally distributed in the zone. The average
distance between retailers is calculated to be 75 m.
From each parking area can be reached in walking distance 5 delivery points, with a
total of 600 m walking distance.
The total weight of the orders is 5565 kg and the average weight per order is 42.5 kg. It
is assumed that all the orders have the same weight and as the e-Cargo Bikes has a
payload capacity of 300 kg they can carry 7 orders per route.
Delivery operations:
The courier after loading the container in the bike’s module, will move to the first
parking area and distribute the orders to the delivery points with the help of the hand
truck. After serving the delivery points that are reachable from the first park, he will
move to the second parking area and deliver the remaining orders. After he deliver all
the orders available on the bikes he will return to switch the empty container in the
depot.
Figure 16: Example of electric Cargo Bike operations
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Figure 17: Example of courier walking operations
The route simulation was performed. One delivery tour take 135 minutes to be fulfilled
with an average driving distance of 5.35 km and 0.9 km walking distance.
Figure 18: Example of electric Cargo Bike route per tour
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Figure 19: Example of courier walking route per tour
A bike can deliver up to 23 orders per day, having 3 full tours with 7 delivery points
per tour and a tour with 2 delivery points.
There are needed 6 cargo bikes to fulfill this supply chain. Each day three of the bikes
will perform 4 tours and the other bikes will perform only 3 tours. The total traveled
distance by all the e-Cargo Bikes is 106.3 km per day and 30,083 km per year.
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5.3 Cost-Benefit Analysis
The cost-benefit analysis is business process to analyze the decisions. The benefits
produced by the action are summed and then the cost associated with the project are
subtracted. The first step is to compile a comprehensive list of all the costs and benefits
associated with the project
Costs includes direct and indirect costs.
• Fix costs: these costs are related to structural costs as warehouse rent,
vehicles, headquarter bills. They are independent from the produced
service.
• Variable costs: they are related to the volume of the goods handling as
transportation and logistics costs. They increase proportionally with the
volume of the goods.
Benefits includes all direct and indirect revenues and intangible benefits, such as
increased production from improved employee safety and morale. It must be applied a
common unit of monetary measurement to all items on the list, taking care not to
underestimate costs or overestimate benefits.
Figure 20: Cost benefit analysis
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The final step of this analysis is to compare the total aggregate costs and benefits
quantitatively to determine if the project is suitable to be implemented. If the benefits
are greater than the costs, it means that the project can be implemented, if not the
project should be reviewed and make the adjustments to reduce the costs and increase
the benefits.
5.3.1 Project financial costs The project costs analysis include all the cumulative costs to set and operate the
proposed project. The cost-benefit model is developed for a period of 10 years (equal to
the assumed effective lifetime of the e-Cargo Bikes), for the equipment’s that has a
smaller lifetime their cost is calculated based on their real lifetime. Interest rate is
calculated 6 %. The model is developed using the monetary values of each of the
following costs:
Id Indicators Explanation 1 Installation & fixed taxes Cumulative amount of money to register a new company
and business operation fixed taxes 2 Rental cost Depot rental cost 3 Vehicles cost Vehicle purchasing costs 4 Container Cost Container purchasing costs 5 Wages Cumulative amount of money for the wages 6 Depot installation costs Cumulative amount of money for the purchase and
installation of the depot equipment’s 7 Communication units Amount of money to purchase the communication units 8 Re-Charging cost The energy used to recharge the vehicles 9 Utility costs Cumulative amount of money to pay the utility bills,
insurance, security and anti-fire system for the depot
Table 18: Cost indicators of the proposed project
63
Installation & fixes taxes The installation cost of a business includes the cost to register at national register center
and in the municipality and the fixed taxes to the municipality are calculated to be 1000
euro/year.
Rental cost
⋅ Depot size: 180 m2
⋅ Price/m2: 5.2 euro/m2/month
⋅ Depot cost is: 11232 euro/year
Vehicles cost ⋅ VELOVE Cargo Bike (electric assisted): 8190 euro
⋅ Extra battery: 550 euro
⋅ Spare wheel 175 euro
⋅ Module platform for city container: 300 euro
Total: 9215 euro
Purchasing cost for 6 e-Cargo Bike: 55290 Euro
Calculated based on interest rate of 6% for 10 years the total cost: 64134 Euro
Salvage value (re-selling) after 10 years: 6000 euro
Amount of depreciation per year = 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃ℎ𝑎𝑎𝑎𝑎𝑎𝑎𝑛𝑛𝑎𝑎 𝑃𝑃𝑐𝑐𝑎𝑎𝑐𝑐 −𝑆𝑆𝑎𝑎𝑆𝑆𝑆𝑆𝑎𝑎𝑎𝑎𝑆𝑆 𝑆𝑆𝑎𝑎𝑆𝑆𝑃𝑃𝑆𝑆𝐿𝐿𝑎𝑎𝐿𝐿𝑆𝑆
Amount of depreciation per year is 5813 euro/year
64
Figure 21: Linear depreciation of e-Cargo Bikes
Container purchasing cost
⋅ 2 m3 city container: 242 euro
12 city container costs: 2904 euro
Calculated based on interest rate of 6% for 10 years the total cost: 3368 euro
Salvage value (re-selling) after 10 years: 0 euro
Amount of depreciation per year is 337 euro/year
Wages
Warehouse manager
Net salary : 520 euro (65,000 ALL)
Gross salary: 646 euro (80,742 ALL)
Gross salary = Net salary + Social insurance contributions + Health insurance
It is assumed that all the equipment’s salvage value after 10 year is 30 % of the
purchased value.
Calculated based on interest rate of 6% for 10 years the total cost: 21877 Euro
Salvage value (re-selling) after 10 years: 5210 euro
Amount per year is 1667 euro/year
Communication units
For the communication between the employees and the vehicle positions smartphone
with GPS service are used.
Price per device: 200 euro
9 x smartphone = 1800 euro
Calculated based on interest rate of 6% for 5 years the total cost: 2090 Euro
Salvage value (re-selling) after 5 years: 0 euro
Amount per year is 420 euro/year
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Re-charging Cost
Electrical energy per vehicle recharging Kw/km/Vehicle: 0.020 kwh/km Price/Kw: 12 cents Average tour length: 5.35 km Total traveled km by all vehicles/year: 30,083 km Total annual energy consumed: 601.66 kW
Total charging cost: 72.2 euro/year
Table 20: Re-charging costs
Vehicle maintenance Costs
Battery change 2 x 550 euro (after 40,000 km)/bike = 990 euro/year
Spare wheel change 175 euro (after 4,000 km) /bike = 1575 euro/year
Normal maintenance 400 euro (after 6,000 km) /bike = 2400 euro/year
TOTAL = 4965 euro/year
Utility Costs
Security system 110 euro/month Fire system 40 euro/month Internet 20 euro/month Sim cards (9 pcs x 12 euro) 108 euro/month Water bills 30 euro/month Energy 70 euro/month
The total cost of the new supply chain is calculated to be 84,497 euro/year. This cost
model is formulated assuming that there will be taken a business loan with interest of
6% and is going to be paid in ten years.
5.3.2 Project financial benefits
In this part are calculated the financial benefits of the project. The benefits are
calculated based on the price of the service and the quantity that this supply chain is
going to serve. The price of the service is assumed to be same with the other express
courier services that are operating in Tirana. The price including the 20% VAT (TVSH)
is going to be 9 cent/kg. The tax on profit according to the Albania law is 15%.
Indicator Value Unit
Price /Kg 9 Cent
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Price (ex. VAT)/Kg 7.5 Cent
Quantity/Year 1,575 Tons
Income +118,110 Euro
Costs -84,497 Euro
Profit 33,613 Euro
Tax on profit -5041.9 Euro
Benefit/Year +28,571 Euro
Table 22: Project financial benefits
The total annual benefit is calculated to be 28,571 Euro. As the benefits are greater than
costs the project is suitable to be implemented.
5.3.3 Break Even Point analysis
The break-even point analysis was done for this business model. The analysis was
conducted in annual terms. To calculate the breakeven point, the fixed and variable
costs were divided. Considering the type of vehicles used in this project the variable
costs are very low.
The break-even point was calculated with the following formula:
BEP = FC / (p-vc)
Where:
BEP – Break-even point
FC – Fixed costs
p – Price/Unit
vc – Variable costs/Unit
Fixed Cost 79459 €
Variable Cost/Unit 3.2 €/Ton
Price/Unit 75 €/Ton
BEP 1106 Ton (70%)
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The annual break-even point is reached after 70% of the demand, in other terms is 1106
tons over 1575 tons of goods. Following is reported the break-even point graph:
Figure 22: Break Even Point graph
6. BEFORE’ AND ‘AFTER’ SCENARIOS COMPARISON
6.1 ‘Before’ and ‘After’ scenarios assessment
The first step of this chapter is to show the current situation (Before) and the expected
situation (After) after the project implementation.
In the current situation, is assumed that all the supply chains are served by diesel vans
with maximum payload capacity >3.5 tons. There are 1920 diesel commercial vehicles.
There are identified 43 supply chains that serve the zone.
0
20000
40000
60000
80000
100000
120000
0 200 400 600 800 1000 1200 1400 1575
Break Even Point
Total Cost (€) Sales (€)
71
Figure 22. ‘Before’ Scenario representation
There were selected eleven supply chains that are suitable to implement this project.
The selected supply chains have a total of 37,000 deliveries/year corresponding with
16% of the total deliveries of the zone. In the survey was estimated that the selected
supply chains have an annual freight quantity of 1,575 tons/year.
Figure 23. ‘After’ Scenario representation
In the table 23. reported below a summary of two scenarios is given
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Features
Scenario Before Scenario After
All the supply
chains
Supply chains
served by e-CB
Remaining supply
chains
Annual deliveries 234,000 37,000 197,000
Annual quantities (ton) 30,000 1,575 8,386
Daily deliveries 827 131 696
Daily quantities (ton) 106 5.6 29.6
Number of vehicles 1,920 diesel
vehicles
6 e-Cargo
Bikes
1,616 diesel
vehicles
Table 23: Before and After scenarios summary
6.2 Logistic Sustainable Index calculation
To evaluate the impact of the project a set of indicators are selected from the Annex A
of LSI to compare the ‘Before’ and ‘After’ scenarios. The selected indicators are
reported in table 24.
Impact Area
Criterion Indicator Unit
Economy and Energy
Development Local/regional development Likert scale
Benefits Income generated Euro Strength and diversification of diversification of local economy Likert scale
Costs
Installation & fixed taxes Euro Rental cost Euro Vehicles cost Euro Container Cost Euro Wages Euro Depot installation costs Euro Communication units Euro Re-Charging cost Euro Utility costs Euro
Environment Air quality CO emission gr/year NOX emission gr/year
Greening Green reputation Likert scale Green concern Likert scale
Convenience Perceived visual and audio nuisance Likert scale Diffusion of information Likert scale
Living standards
Perceived alternative mobility Likert scale Quality of life Likert scale Changes in consumer behavior society Likert scale Lack of awareness of UFT impacts Likert scale Bad habits of UFT users Likert scale
Policy and measure maturity
Awareness Awareness level Likert scale
Managerial risks
Information flow problems Likert scale Time planning misjudgment Likert scale Poor or lack of know-how Likert scale Lack of cooperation Likert scale Lack of knowledge about stakeholders' requirements Likert scale
Background Replication Likert scale
Social acceptance
Social approval
Public acceptance Likert scale Social consciousness Likert scale Final user awareness Likert scale Final user acceptance Likert scale Decision making acceptance Likert scale
Regulations’ acceptance
Compliance with regulations Likert scale Enforcement Likert scale Eco-driving practice before the journey Likert scale Eco-driving practice during the journey Likert scale
Table 24: Logistics sustainability index indicators
The values for the cost and the benefits are taken from the Cost/Benefit analysis
reported in the previews chapter.
The air emissions indicators:
⋅ CO emission
⋅ NOX emission
⋅ NMVOC emission
⋅ NH3 emission
⋅ PM emission
⋅ N2O emission
Are calculated by using the COPERT Methodology ‘EMEP/EEA air pollutant emission
inventory guidebook 2013’, using the algorithm of the first method (Tier 1)
Ei = ∑j ( ∑m (FCj,m x EFi,j,m ))
Ei = emission of pollutant i [g],
FCj,m = fuel consumption of vehicle category j using fuel m [kg],
EFi,j,m = fuel consumption-specific emission factor of pollutant i for vehicle
category j and fuel m [g/kg].
In this project the mean value of the emission factors is used. The maximum and
minimum values correspond to :
⋅ the maximum values correspond to uncontrolled vehicle technology
⋅ the minimum values correspond to a European average in 2005 (before the introduction
of Euro 4).
The greenhouse gas (GHG) emission is calculated based on the formula:
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CO2 emission g/MJ of fuel = 3,67 x cC / Ha
Where:
cC = fuel carbon content (mass basis)
Ha = lower heating value of the fuel
The noise level is calculated using a model formulated by the French
‘Centre.Scientifique.et.Technique.du.Batiment’ with a predictive formula of equivalent
emission level based on the average acoustic level (L50):
Leq = 0.65 L50 + 28.8 [dB(A)]
L50 is calculated considering only the equivalent vehicular flows (Qeq)
and is given by:
L50 = 11.9 Log Q + 31.4 [dB(A)]
The other indicators are evaluated using the ‘Likert Scale’ based in a reasonable analysis
using the stakeholder feedback through questionnaire survey was done. For each of the
selected indicators was given a value thinking of what their impact could have been in
before and after scenarios.
The indicators are computed for ‘Before’ and ‘After’ scenarios, in the tables 27 and 28
reported below are given the values for both scenarios:
Criterion Indicator Value Unit
Development Local/regional development 2 Likert scale
Benefits Income generated 0.00 Euro Strength and diversification of diversification of local economy 1 Likert scale
Costs
Installation & fixed taxes 0.00 Euro Rental cost 0.00 Euro Vehicles cost 0.00 Euro Container Cost 0.00 Euro Wages 0.00 Euro Depot installation costs 0.00 Euro Communication units 0.00 Euro Re-Charging cost 0.00 Euro
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Maintenance costs 0.00 Euro Utility costs 0.00 Euro
Greening Green reputation 1 Likert scale Green concern 1 Likert scale
Convenience Perceived visual and audio nuisance 4 Likert scale
Diffusion of information 2 Likert scale
Living standards
Perceived alternative mobility 1 Likert scale Quality of life 1 Likert scale Changes in consumer behavior society 2 Likert scale
Lack of awareness of UFT impacts 1 Likert scale
Bad habits of UFT users 1 Likert scale Awareness Awareness level 2 Likert scale
Managerial risks
Information flow problems 1 Likert scale Time planning misjudgment 1 Likert scale Poor or lack of know-how 5 Likert scale Lack of cooperation 3 Likert scale Lack of knowledge about stakeholders' requirements 3 Likert scale
Background Replication 1 Likert scale
Social approval
Public acceptance 2 Likert scale Social consciousness 2 Likert scale Final user awareness 1 Likert scale Final user acceptance 2 Likert scale Decision making acceptance 2 Likert scale
Regulations’ acceptance
Compliance with regulations 2 Likert scale Enforcement 2 Likert scale
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Eco-driving practice before the journey 1 Likert scale
Eco-driving practice during the journey 1 Likert scale
Motivation for eco-driving practice 1 Likert scale
Table 25: Values of the LSI indicators in ‘Before’ scenario
Criterion Indicator Value Unit
Development Local/regional development 4 Likert scale
Benefits Income generated 28,571.00 Euro Strength and diversification of diversification of local economy 3 Likert scale
Costs
Installation & fixed taxes 1,000.00 Euro Rental cost 11,232.00 Euro Vehicles cost 5,813.00 Euro Container Cost 337.00 Euro Wages 54,455.00 Euro Depot installation costs 1,667.00 Euro Communication units 420.00 Euro Re-Charging cost 73.00 Euro Maintenance cost 4965.00 Euro Utility costs 4,536.00 Euro
GHG emission CO2 emission 120,734,592.00 gr/year Noise Noise level 67.04189 dB (A)
Level of service Customer satisfaction 4 Likert scale Supply chain visibility 4 Likert scale
Transport system Violations 10 Percentage (%)
Network barriers 4 Likert scale
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IT, infrastructure and technology Infrastructure usage 4 Likert scale
Greening Green reputation 5 Likert scale Green concern 5 Likert scale
Convenience Perceived visual and audio nuisance 1 Likert scale
Diffusion of information 4 Likert scale
Living standards
Perceived alternative mobility 5 Likert scale Quality of life 5 Likert scale Changes in consumer behavior society 5 Likert scale
Lack of awareness of UFT impacts 5 Likert scale
Bad habits of UFT users 5 Likert scale Awareness Awareness level 5 Likert scale
Managerial risks
Information flow problems 1 Likert scale Time planning misjudgment 1 Likert scale Poor or lack of know-how 1 Likert scale Lack of cooperation 1 Likert scale Lack of knowledge about stakeholders' requirements 1 Likert scale
Background Replication 5 Likert scale
Social approval
Public acceptance 5 Likert scale Social consciousness 5 Likert scale Final user awareness 5 Likert scale Final user acceptance 5 Likert scale Decision making acceptance 5 Likert scale
Regulations’ acceptance
Compliance with regulations 5 Likert scale Enforcement 5 Likert scale Eco-driving practice before the journey 5 Likert scale
Eco-driving practice during the journey 5 Likert scale
Motivation for eco-driving practice 5 Likert scale
Table 26: Values of the LSI indicators in ‘After’ scenario
Considering that the values of the indicators are expressed in different units: (Euro,
g/year, dB(A) ), all of them must be monetized in Euro. This step was done by using
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the ‘Harmonized European Approaches for Transport Costing and Project Assessment’
guideline. The external costs of the pollution are calculated by the annual production
of the pollutant agent (ton/year) and the external cost of that agent (euro/ton).
Considering that the external cost for Albania, aren’t available, for this actual study
case the Italian standards are used.
Emission Cost Unit
CO 0.004 Euro/g
NMVOC 0.0016 Euro/g
NOx 0.0032 Euro/g
PM 0.39 Euro/g
N2O 0.003 Euro/g
NH3 0.0221 Euro/g
CO2 0.0001 Euro/g
Table 27: Air emission indicators
The same guideline determines, also the methodology to calculate the monetary cost
for the noise pollution. The population is divided in: highly annoyed people annoyed
people a few/not annoyed people Using the following equations:
Where:
⋅ (%HA) - % of highly annoyed people
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⋅ (%A) - % of annoyed people
⋅ (%LA) - % of a few/not annoyed people
Group % Cost
Highly annoyed people 20.3 85 Euro/person
Annoyed people 41.3 85 Euro/person
Few/not annoyed people 38.4 37 Euro/person
Table 28: Annoyed level of the population for noise pollution
The next step is the value normalization. The values of the negative indicators is signed
with a negative sign (minus) and the values of the positive indicators are signed with a
positive sign (plus).
The final step of this ex-ante evaluation is the performance calculation of each impact
area using the following formula:
LSIi = ∑ 𝐼𝐼𝑀𝑀𝑚𝑚=1 Rm * Wm
Where:
LSIi = Logistic Sustainability Index assessing the performance of impact area i
Im = Normalized value of indicator m with minus or plus sign
Wm = weight of indicator m
The total Logistics Sustainable Index is calculated as the weighted sum of the LSIi with
the following formula:
LSI = ∑Ri LSIi * wi
Where:
wi = are the weights of the impact areas.
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6.3 LSI Results
The performance for each impact area is calculated for both ‘Before’ and ‘After’
scenarios. The results are given in tables 29 and 30 reported below:
Impact area Impact area performance
Economy and Energy 0.056 Environment -0.327 Transport and Mobility 0.095 Society 0.089 Policy and Measure maturity -0.085 Social acceptance 0.134 User uptake 0.029
LSI -0.009
Table 29: Performance of the impact areas in the ‘Before’ scenario
Impact area Impact area performance
Economy and Energy 0.20 Environment -0.28 Transport and Mobility 0.25 Society 0.30 Policy and Measure maturity 0.05 Social acceptance 0.39 User uptake 0.06
LSI 0.97
Table 30: Performance of the impact areas in the ‘After’ scenario
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The following radar graph represent the comparison of the performance of each
indicator between both scenarios.
Figure 24: Impact areas performance
Considering that the costs are signed as negative values and the benefits as positive
values, we have that by the increase of the Logistic Sustainability Index the overall
performance of the selected measure improves.
Economy and Energy: The performance of this impact area is improved as the
implementation of the selected measure bring operating financial benefits. This type of
sustainable and eco-friendly measures has a good effect on the local economy and
development.
0.20
-0.28
0.25
0.30
0.05
0.39
0.060.052
-0.3270.095
0.089
-0.085
0.134
0.029
-0.40
-0.30
-0.20
-0.10
0.00
0.10
0.20
0.30
0.40Economy and Energy
Environment
Transport andmobillity
SocietyPolicy and measure
maturity
Social acceptance
User uptake
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Environment: We can see a light improvement on the environment impact area as
the implementation of this measure is decreasing significantly the number of fueled
commercial vehicles. The air, GHG, and noise pollutions are lightly reduced and, in
both scenarios,, they are in negative values.
Transport and Mobility: In this impact area we have a significant improvement.
The new served supply chain will have a greater transparency with the clients. The
new used vehicles are going to reduce significantly the violations, the infrastructure
usage is greater, and they don’t have network barriers due to their dimensions and
characteristics.
Society: The performance is significantly improved as the evaluation is based mainly
in life quality, this type of eco-friendly projects have a positive impact to the
environment and they have greater values in the ‘after’ scenario evaluation.
Policy and measure maturity: This impact area consider the level of the
stakeholder involvement and level of implementations of standards or procedures on
information flow between stakeholders affect by the measure implementation.
Social acceptance: This impact area have similar considerations with the society
impact are, they consider the life quality and as the implemented measure has an eco-
friendly approach the evaluation of after scenario is greater.
User uptake: In this impact area is considered the stakeholder acceptance of the
implemented measure and the possibility of re-use or replicate this measure in other
contexts.
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7. FINAL CONLUSION
In this chapter are reported the final conclusions of the master thesis and the
suggestions for further researches are proposed. The survey, analysis, findings and
simulations has revealed that the implementation of e-cargo bikes, is a potential
solution for a sustainable urban freight distribution.
7.1 Conclusion
The demand for goods is daily increased and brings with it a daily increase of the
externalities. The urban freight distribution is not a problem only for Tirana or certain
cities, but a world widely challenge. The urban context itself with the narrow streets,
lack of parking and traffic jams, limit the urban freight distribution. In the other hand
the externalities of the road traffic to the life-quality and environment force the local
and central governments to implement policies that limits the operators to distribute
urban freight within the city. Having an increase of the demand and a decrease of the
ability to perform the operation for the demand fulfillment, we can say that the
scenario of urban freight distribution is going forward a collapse.
Tirana is one of most polluted cities in western Balkan. The air pollution, noise and
traffic jams are great negative factors that affect the life-quality and the environment. A
big influence in the road traffic externalities is due to the commercial vehicles that are
supplying the city necessities for goods. The municipality of Tirana is doing many
investments and policies to reduce the pollution. The main focus is in the investments
for new bus lines and lanes, bike promotion and bike reserved lanes and public
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parking. In the field of urban freight distribution there is not a proper policy to
evaluate and solve the problem. The only action of the municipality is the time-
windowed traffic limitation for commercial vehicles. A sustainable solution is needed.
The main purpose of the thesis was to evaluate if the implementation of a new supply
chain served with alternative vehicles, is suitable and effective in Tirana. The objective
was to create a supply chain that reduce the costs, the traffic externalities and satisfy
the demand.
Considering this problem and lack in Tirana, a research was made to find a sustainable
solution that is feasible and suitable based on the city characteristics. Among different
alternatives, the usage of electric Cargo Bikes was chosen as an avantgarde and eco-
friendly solution. Based on market researches and knowledges the zone to conduct the
study case was selected to be on the busiest districts of Tirana, Blloku district.
The lack of studies, data and information brought the need of the survey to reveal the
current situation of urban freight delivery in the study area. The data that were aimed
to obtain form the survey were: the freight demand in terms of yearly quantity and
volume, the actual supply chain characteristics, establishment characteristics and the
problems that the stakeholders are facing.
The field survey was conducted in Blloku district, with the assistance of two colleagues
and the necessary data to simulate the new supply chain were gained. There were
identified a total population of 842 establishments. Their characteristics as area,
warehousing capacity, number of employments and number of vehicles were obtained.
The current supply chains their characteristics as vehicle type, parking availability and
delivery operating time were identified.
Another important goal of the field survey was the identification of the freight demand
in terms of yearly quantity and volume. Based on the data gained by the survey the
demand quantity of each type of good was estimated.
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In the survey there was an open question for the shopkeepers to express their problems
and expectations. The main problems that the stakeholders in the study area are the
lack of reserved parking for loading/unloading operations, traffic congestion, illegal
parking, audio and visual pollution, lack of available warehouses. The also express the
need and the importance to take some sustainable solution to eco-friendly alternatives.
After the reveal of all the supply chains that were operating in the zone, there were
selected the ones that could be suitable for the new project. The selection was done in
an empirical approach that exclude the ones that have limitations to be applied in the
proposed project.
In order to simulate the new proposed supply chain and to check if it was a realistic
and efficient solution all the characteristics of the supply chain were designed
according to the real-world parameters. The depot location and characteristics, vehicles
selection, logistic operations including staff duties were designed and simulated. To
check if the new proposed model was economically efficient and suitable a
Cost/Benefit analysis and a Break Even Point analysis were conducted.
In the proposed supply chain there is projected to have 27 new reserved parking slots
for the loading/unloading operations. These new reserved parking lanes will be used
also by the other supply chains that are served with fueled commercial vehicles. This
will reduce many externalities that are caused by traffic congestion and illegal parking.
The thesis consisted in comparing the current situation with proposed project. To
evaluate the impact of the project an ex-ante evaluation of the scenarios was
conducted. The impact in different impact areas and with different indicators was
evaluated and compared, to see the results of the proposed project. The analysis of the
results revealed that the proposed supply chain is feasible, efficient and will reduce the
traffic congestion, illegal parking, air pollution, GHG emission and noise pollution.
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As conclusion ,this study has revealed that the implementation of electric cargo bikes
for urban freight distribution is an efficient a sustainable solution. Based on analysis
and the simulations conducted in the thesis it can be said that the proposed solution
confirm the hypothesis that cargo bikes reduce road traffic externalities, reduce costs
and has a sufficiently good level of service.
Finally, to answer the research question, we can say that the implementation of a
supply chain served by electric cargo bikes in Tirana, has the potential to be a
sustainable urban freight distribution model. This model is able to provide economic,
environmental and social benefits.
7.2 Further researches
The results of this thesis has provided interesting results for the performance of electric
cargo bikes in urban freight distribution in Tirana. However, considering that in some
cases the data and information taken from the survey and other sources can deviate
from reality is important to have further researches to evaluate the effects in different
city context. Another aspect can be the researches to see the effects, that different
policies or measures alters the potential modal change from fueled commercial vehicles
toward electric cargo bikes or other eco-friendly vehicles.
It would be very interesting if the proposed project is implemented as a pilot project in
Tirana and to obtain real performance data. The encounter of the proposed project with
the real-events as traffic congestion, weather conditions, routes and human limitations
can lead to more realistic conclusions.
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