Minnesota Department of Transportation

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NS762: Identification of viable commercial cargo electric bicycle business models in Minnesota

Problem

Commercial cargo electric bicycle (CCEB) implementation and pilot programs across various US cities (including New York, Boston, and Seattle) and a growing body of research point to benefits of CCEB adoption for both users and communities. MnDOT is interested in researching viable business models for CCEB use in the context of Minnesota. The aim of this research is to identify and demonstrate what role(s) CCEBs can play in the Minnesota freight system. From this identification, the research will also better inform government agencies as they react to CCEB adoption.

CCEBs are bicycles (or tricycles) that are mostly or fully powered by electricity and are used to transport cargo for a commercial purpose. They are often classified as Class 2 electric-assisted bicycles per MN Statute 169.011 Subd. 15b and are limited to 20 mph with throttle and/or pedal assist. CCEB deployment is growing—the rise of e-commerce being a contributor—with private companies and couriers utilizing CCEBs for local deliveries, and local governments developing programs to encourage usage or develop policy to respond to CCEBs.

CCEBs can provide several advantages to freight delivery, including addressing operations, safety, and climate concerns. Operational efficiencies include right-sizing vehicles for deliveries, movement agility, parking closer and for less time than typical delivery vehicles and avoiding congestion. They also help manage curbside delivery conflicts. In comparison to typical delivery vehicles, CCEBS have a lower environmental cost and produce zero emissions. CCEBs can improve safety as they are lighter and slower than traditional delivery vehicles and their usage results in less road congestion and need for double parking. The nature of CCEBS being both bikes and freight vehicles can help resolve conflicts in a complete streets approach, where the needs of bike and freight vehicles often clash.

This research will identify viable CCEB business models in the context of Minnesota and inform government efforts that facilitate their viability. This research will consider what roles CCEBs can have in improving freight business operations, such as efficiency, costs, emissions, scalability and other concerns. Different business models may be identified across types of cargo, volume of goods, length and time of delivery routes, road infrastructure, time of day, etc. Models will be considered in communities across Minnesota, big and small. Research will engage industry--private, public, and non-profit organizations that may use or supply CCEBs—to connect business needs and CCEB capabilities. 

Additionally, this research may challenge the “traditional” assumptions around economic, human, and environmental benefits and trade-offs. It will describe CCEB business model(s) that provide a win-win-win scenario to bettering the economic, human and environmental aspects of Minnesota’s freight system. The research will also provide recommendations for how government agencies can support the implementation of these business models. This research would enable future study to identify how CCEBs can address challenges in Minnesota’s freight system. 

Objective

The proposed research will identify business use cases for CCEBs in Minnesota and provide information the state can use to support their adoption. This research will build upon past research and conduct new research, considering CCEB business use cases within the context of Minnesota, including through exploration of various stakeholders. The overall aim of this research is to help Minnesota successfully adopt CCEBs, maximizing their benefits and mitigating their challenges.

An end product of this research will be a roadmap for CCEB implementation in Minnesota. This roadmap will include what actions can be taken to support effective adoption of CCEBs in the identified CCEB business models. It will provide strategies MnDOT can take to integrate CCEB considerations into its planning, programming, and operations. 

Expected outcomes

  • New or improved policy, rules, or regulations
  • New or improved business practices, procedure, or process

Previous research

Previous research largely focuses on the benefits of CCEBs for both users and communities. Previous research may analyze use cases where businesses, or city pilot programs, have utilized CCEBs. The benefits and lessons learned from prior research can be a starting basis for this research opportunity. This research opportunity can consider use cases within the context of Minnesota and utilize or discuss methodologies for assessing CCEB viability to identify these use cases.

The success of innovation diffusion—meaning, the adoption of a technology throughout the technology adoption lifecycle—depends on several factors. One avenue of innovation diffusion is through early adopters or the spread of information within the social system under consideration of basic economic conditions, in this case in Minnesota. This project can build on previous research by allowing businesses with shared characteristics to visualize how effective CCEB business models in Minnesota may be beneficial for their operations.

  1. Achamrah, F. E., & Puchinger, J. (2024). A gradient-descent-based framework for solving a stochastic two-echelon delivery problem with cargo-bikes. Transportation Research Part E: Logistics and Transportation Review, 189. Retrieved from https://doi.org/10.1016/j.tre.2024.103677.
  2. Buerklen, A., Schuete, N., & Rudolph, C. (2023). Collaborative Distribution Solutions in Last Mile Logistics. Smart Energy for Smart Transport. Springer Cham. Retrieved from https://doi.org/10.1007/978-3-031-23721-8_113
  3. Choubassi, C., Seedah, D. P., Jiang, N., & Walton, C. (2016). Economic Analysis of Cargo Cycles for Urban Mail Delivery. Transportation Research Record, 2547(1), 102-110. Retrieved from https://doi.org/10.3141/2547-14
  4. Dalla Chiara, G., Verma, R., Rula, K., & Goodchild, A. (2023). Biking the Goods - How North American Cities Can Prepare for and Promote Large-Scale Adoption of Cargo e-Bikes. Seattle: Urban Freight Lab, University of Washington. Retrieved from https://doi.org/10.6069/REXD-W642
  5. Galkin, A., Švadlenka , L., Vrba, R., & de Oliveira, L. K. (2025). Evaluation of cargo bike program for parcel deliveries in a medium-sized city. Transportation Research Part D: Transport and Environment, 140. Retrieved from https://doi.org/10.1016/j.trd.2025.104609.
  6. Gruber, J., Damer, L., Dubernet, I., & Plener, M. (n.d.). Car or Cargo Bike? Determinants for the Use of a Small Vehicle Type in Urban Logistics: A Stated Preference Survey Among Commercial Transport Operators. Transportation Research Record, 2678(11), 1548-1561. Retrieved from https://doi.org/10.1177/03611981241245676
  7. Heinrich, L., Schulz, W. H., & Geis, I. (2016). The Impact of Product Failure on Innovation Diffusion: The Example of the Cargo Bike as Alternative Vehicle for Urban Transport. Transportation Research Procedia, 19(2352-1465), 269-271. Retrieved from https://doi.org/10.1016/j.trpro.2016.12.086
  8. Henry, E. (2024). Location of Warehouses and Routing of Cargo Bikes for Last-Mile Deliveries in Urban Areas. World Road Association (PIARC), 204. Retrieved from https://routesroadsmag.piarc.org/en/Routes-Roads-Magazine-Issue-402-Roads-and-Cycling/8465,Routes-Roads-Magazine-402-Location-Warehouses-Routing-Cargo-Bikes-Last-Mile-Deliveries-Urban-Areas-France
  9. Korn, Jacob; Plovnick, Amy; Sydoriak, Jason; Wilkerson, Alex;. (2023). Electric Bicycle (E-bike) Trends, Impacts, and Opportunities: Literature Review Summary. Cambridge; Washington, D.C.: Volpe National Transportation Systems Center, Federal Highway Administration, U.S. Department of Transportation. Retrieved from https://www.fhwa.dot.gov/environment/bicycle_pedestrian/resources/e-bikes/ebikes_lit_review.pdf
  10. Michalakopoulou, K., Vann Yaroson, E., & Chatziionannou, I. (2024). Decoding cargo bikes’ potential to be a sustainable last-mile delivery mode: an operations management perspective. Transportation Planning and Technology, 48(4), 712–73. Retrieved from https://doi.org/10.1080/03081060.2024.2375630
  11. Mowe, M., Weiß, A., & Clausen, U. (2023). Cargo Bikes in Transport Logistics Review of User Requirements and Related Bike Models. Advances in Resilient and Sustainable Transport. ICPLT 2023. Lecture Notes in Logistics. Cham Springer. Retrieved from https://doi.org/10.1007/978-3-031-28236-2_7
  12. Naumov, V., Vasiutina, H., & Solarz, A. (2021). Modeling demand for deliveries by cargo bicycles in the Old Town of Kraków. Transportation Research Procedia, 52, 11-18. Retrieved from https://doi.org/10.1016/j.trpro.2021.01.003.
  13. New York City Department of Transportation. (2021). Commercial Cargo Bicycle Pilot: A New Mode for Last Mile Deliveries in NYC Evaluation Report. Retrieved from https://www.nyc.gov/html/dot/downloads/pdf/commercial-cargo-bicycle-pilot-evaluation-report.pdf
  14. Sheth, M., Butrina, P., Goodchild, A., & McCormack, E. (2019). Measuring delivery route cost trade-offs between electric-assist cargo bicycles and delivery trucks in dense urban areas. European Transport Research Review, 11, 1-12. Retrieved from https://doi.org/10.1186/s12544-019-0349-5
  15. Urban Freight Lab. (2021). The Seattle Neighborhood Delivery Hub Pilot Project: An Evaluation of the Operational Impacts of a Neighborhood Delivery Hub Model on Last-Mile Delivery. Retrieved from https://urbanfreightlab.com/wp-content/uploads/2023/04/UFL-Sea-Neighborhood-Delivery-Hub-Final-Report.pdf

Expected outcomes

  • New or improved policy, rules, or regulations
  • New or improved business practices, procedure, or process

Expected benefits

The numbers 1 and 2 indicate whether the source of the benefit measurement is from: 

  1. A specific research task in your project that will be measuring this particular benefit, or
  2. A separate effort to analyze data provided by the state or local agency involved in this project.
  • Decrease Engineering/Administrative Cost: 2
    This research will include business models for CCEBs that help reduce conflicts in complete streets planning processes, by providing an opportunity that can balance and address both bicycle and freight needs—two needs which are often in conflict with each other.
  • Environmental Aspect: 2
    This research will identify CCEB business models that will provide economic, human and environmental benefits to Minnesota's freight system and Minnesota as a whole. CCEBs produce zero emissions and have a lower environmental cost than typical delivery vehicles. They can help reduce congestion. This research will help increase their usage so that these environmental benefits can be realized.
  • Operation and Maintenance Saving: 2
    This research will provide a base understanding of how CCEBs can operate in Minnesota and how MnDOT can support their implementation through actions in its planning, programming, and operations.
  • Safety: 2
    This research will help prioritize the needs of vulnerable road users with less competing conflict from freight needs, as CCEBs’ needs are both bicycle needs and traditional freight needs.
  • Risk Management: 2
    This research will provide users and the state on best use cases and information to mitigate the challenges of CCEBs. It will inform MnDOT’s decision-making to better manage adoption of CCEBs, and the freight and road systems as a whole.
  • Other (Specify): 2
    CCEB implementation supports the goals and objectives of the Statewide Multimodal Transportation Plan, State Freight Plan, and Bike+ Plan, and overall Minnesota GO vision. This research will prepare MnDOT to better understand an emerging technology that can address several statewide challenges.

Technical advisory panel

  • Jesse Thornsen, OTAT
  • Lydia Anthony, OFCVO
  • Representative from OSPH
  • Representative from MnDEED
  • Representative from a City
  • Representative from an MPO
  • Representative from an RDC