Case Study Outspoken Delivery

Case Study – Outspoken Delivery

Background

Outspoken is a cycle courier business in Cambridge, established in 2005 by brothers Rob and Peter King. We use specially designed cargo bikes to deliver small and medium-sized packages and ensure there are less vans moving goods in our City. Outspoken Delivery is now the largest cycle courier business of its kind in the UK.

Bikes & equipment

Outspoken use “8 Freight” bicycles designed by Mike Burrows, famous for designing the Lotus time- trial bike ridden by Olympic gold medalist, Chris Boardman. (See http://www.8freight.co.uk/).

Advantages

 They are extremely dynamic bikes: light and fast and capable of carrying up to 80kg in weight. A large box can be easily installed or removed. It means that we can use the bikes for small multi-drop documents but have the capacity to easily switch to larger loads.

 Their long wheel base makes the 8 freights fairly smooth, meaning delicate items such as computers and platters of sandwiches can be transported without worry.

 They are no wider than the handle bars at any point which allows couriers to utilise cycle lanes and filter effectively, avoiding traffic congestion.

 The unusual design of the bikes means that they are well known about the city. This raises awareness of the company and allows us to sell advertising space to local businesses.

Disadvantages

 The bikes are very light and this trade-off means the frames are liable to brake and repairs are awkward and expensive. A new 8-freight design is due out imminently.

 The bike parts are not standardised and are made to order by Mike Burrows himself. This again will soon change and production levels are aiming to be much higher.

 Using large company owned bikes means that storage is a cost that perhaps other cycle couriers would not encounter.

 Like all bicycles, they are designed for a purpose, so the bicycles are good for small and medium sized packages but are heavy for anything really light and not big enough for larger items. Services

Ad Hoc services

Outspoken offers four basic same day services with additional costs for large or oversized items:

 Early Bird (Ready by 10, delivered by 5, so essentially a 7 hour service)

 4 Hour

 2 Hour

 1 Hour

These are booked in usually by telephone on an ad hoc basis

The pricing is based on the service and is fixed for a given area (actually the whole of the City for us).

The 4 hour is by far the most popular used regularly by printers, designers and parts of the university. This and the earlybird service are our most profitable as we can tie many deliveries into one (multi-drop) making it far more efficient, despite the difference in price, to the more urgent services.

The 1 hour and 2 hour services can work out very well and can be a real headache as they are so unpredictable and rely on having couriers in the right place at the right time. Economies of scale definitely helps here.

Outspoken also offers a same day service to London. This service utilises regular train connections between Cambridge and London and folding bikes to transport urgent items. Outspoken can convey documents from Cambridge to Covent garden in under 90 minutes, with no congestion or fuel charges. A motorbike can’t get even close to this level of service.

Outspoken offers next day delivery as an alternative to Royal Mail, designed for small multi drop items with costs starting from as little as £0.95.

Contract Work

Outspoken offers regular DX services and contract work such as a daily postal service between different branches of the same company. This comprises the majority of Outspoken’s income (around 65%). It is regular and therefore can be well planned with good use of courier time. It also requires less management with no booking phone call.

Outspoken employs 7 part time couriers, a full time Operations manager and a part time permanent member of staff. On a day to day basis deliveries are organised from the central hub by the Operations Manager, who controls logistics and maximises rider efficiency.

All of our couriers are employed and this helps us to hold onto staff despite the extra costs of Employer’s National Insurance, Liability Insurance and associated staff costs.

The physicality of the work means that none of our couriers are employed on a full time basis. Couriers work varying hours between 2 and 7 per day but almost always regular and often based around other jobs.

The main draw to the job is lifestyle – keeping fit and being outdoors whilst paying the bills. We have never had to actively recruit cycle couriers.

Marketing

Most of Outspoken’s marketing is done directly to businesses by phone or visits. This has proved by far the most successful method of promoting the services provided. The unusual design of the bikes serves to get the company seen by potential customers all over Cambridge. An additional marketing tool is the ‘green’ angle, which generates positive publicity but we have found is not in itself a reason why companies choose us. The decision to use us is based on service and cost and the green angle is an extra tick if these first two essential areas have passed.

Costs incurred by the company centre around staff and premises. The management cost is high as we have a relatively low turnover in such a small town. This cost could come dramatically down with economies of scale. Premises need to be centrally located with storage space for bikes and workshop space for maintenance and repairs.

It is worth mentioning that it could be possible to make profits higher by having couriers who are self-employed and who look after the bikes at their own home but this comes with a new set of challenges as well.

Customers

Outspoken’s customers are almost exclusively businesses and the majority of the work is B2B with a small amount of B2C. The majority of income comes for contract banking work, or from solicitors utilising the DX service. Other work comes from a diverse range of sectors including printers, florists, bakeries, office mail, payroll services and many departments of Cambridge University.

Challenges

Workload

The ad hoc work is very difficult to manage as days can vary from very quiet (with employed staff having nothing to do) and very busy at the other end with no good predictions of which days/parts of the year will be busier.

Costs We work in a small City and have a very niche service. Generating even a modest turnover requires large volumes of work. Compare this to a van courier who might take just one same-day job from Cambridge to Newcastle and charge £300. The equivalent for us might be 100 x £3 jobs.

Future

 Widening our services – using larger vehicles such as electric assist trikes would mean we can move larger and heavier loads.

 Next-day deliveries. We could become a micro-consolidation point for last mile deliveries and obtain large contracts with multinationals such as TNT to do their last mile deliveries for them.

 Door-to-door flyering. This is a very competitive area but could suit our freight bikes well.

 On-forwarding. Providing businesses with an all-stop shop for their courier needs by accessing the national and multi-national carriers such as TNT and DHL.

 Providing a service for local shops to offer a home delivery service.

We have a number of other cycling related businesses where we are able to share resources to improve our profitability.

 Outspoken Training, founded in 2008, is the largest sister company of Outspoken Delivery, offering cycling instruction. The majority of work in this sector is publicly funded training for school children. There is also public funding available for cycling for health and cycling for people with disabilities. Privately, individuals, businesses and organisations are targeted and offered cycling training services. Outspoken is one of 18 national Instructor Training Organisations (ITOs) accredited by DfT to train new cycling instructors. Outspoken Training also runs bike maintenance courses, Dr Bike services and local events to promote cycling.

 Outspoken Cycles is an online retail outlet founded in 2006, specialising in selling single speed and fixed wheel bicycle components, as well as safety equipment aimed Outspoken Training’s customers.