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The commercial models aren't readily available in New Zealand and they are rather pricey, although still cheap compared to a car. If other people can hack one together from chopped up bikes, then why not me?
I'm not much of a welder but luckily I have a friend, Bevan, who has a TIG plant and is a dab hand at welding bike tubes, having built himself a tandem bike amongst other projects. I drew up a quick plan and procured the necessary donor bikes. In the end the rear bike was given to me by the same friend who did the welding. I wanted to put a disc brake on the back so a vertical dropout frame was preferable. The frames I had were all the older style sloping dropout so the donated frame was more suitable.
I decided to go with a 26" wheel mountain bike for the rear because most of the bikes in my stable are mountain bikes and I figured a triple chain ring could come in handy when hauling a big load. For the front I bought a trashed old kid's BMX which came with an extra beefy front wheel which I was glad of.

To shape the tubes accurately for joining, I used one of the many tube notching programs available on the web. I cut the tubes with a hacksaw and then did the shaping with a half-round file. I bought a good file for the job which made it much faster.
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The rear steerer tube was fabricated by cutting the steerer tube off a donor fork and extending it with some extra tube of a similar diameter. The steering arm was again made from the reused end of a donor fork.
The steering strut that joins the rear steerer tube to the front fork was cut and welded rather than bent because it was easier to do and it also matches the sharp angle of the front of the box better. Getting the positioning of the steering system correct was quite important to allow sufficient turning angle. I didn't get it quite right so that on full left the steering strut rubs on the back of the front tire. Not a big deal really as the full lock is never reached while actually riding. The steering strut has M6 nuts welded into the ends to mount the M6 threaded ball rod ends. I left the rod ends loose in the steering strut so the strut is free to pivot out of the way of the front tire when it hits.
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The only other modification was to weld a disc brake mount to the rear of the main donor frame and a small reinforcing brace next to the mount.
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After about six months of intermittent work on the cargo bike and the delivery of a new daughter to use as cargo, I was finally ready to give the whole lot (not the new daughter though) a couple of coats of gloss black enamel paint from a can. A free ride to anyone who can correctly identify all the parts in this photo.
Update 7/5/12
I weighed the bike and it comes in at a very respectable 25kg with the box. Compare with the commercial models which run high thirties.
I added a removable aluminium bar to support a weather cover. It seems to work (see photo below).
The steering bar has turned out to not be quite stiff enough. It is fine during normal riding but flexes when the wheel is pushed on hard. I'll upgrade it to 12mm or larger at some point.
The stand retaining clip was a bit light weight and I had a couple of complaints about it so I remodelled it using a spring.
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