Over the last 3 weeks, I have been writing about how tech is playing a significant role in the evolution of the Nigerian transport and logistics ecosystem. I started with ride-hailing, where I wrote about Nigeria’s first attempt at Uber (Easytaxi) and how (or why) it failed, same as GoMyWay. I covered current incumbents (Uber and Taxify) as well as a new entrant (ProTaxi). I also wrote about bike-hailing and how the model evolved from e-commerce logistics and delivery infrastructure (ACE, then MaxGo and now Gokada).
Today, I will write about the trucking and logistics vertical; how technology is making that space a lot more efficient, increasing the earning power of truck drivers, making goods trackable, and improving insurance penetration, thereby ensuring that manufacturers can focus squarely on their production and marketing, while “tech” handles distribution and logistics.
Today, I will be profiling a few startups – Delivery Science, Trade Depot, Kobo360 and Truckit. But before then, I will look at how the FMCG companies are solving their logistics needs at the moment.
Logistics is no doubt one of the biggest pain points of any consumer and industrial goods business. There is no point in manufacturing or spending money on marketing any product if there is no clear path for getting the product to market. How do I get my soft drink to Udi in Enugu, Odukpani in Cross River State, Barkin Ladi in Plateau State, as well as Ogbomoso in Osun State? This is a difficult task.
Companies typically have departments to manage this operation. A lot of times, most companies invest in their own trucks to better manage the process from their own ends. This investment is in addition to working with independent trucking companies to meet up with the shortfalls in truck availability.
As you can imagine, if a cement company in Benue needs to truck its product from Benue to Lagos, the truck will be fully loaded from Benue, but return to Benue empty. This is grossly inefficient.
Logistics managers also have problems of tracking the goods. Since they do not control all the fleet available to them, they must track each truck. A lot of times, some of the goods in transit get stolen (or reported as stolen). As the managers have no means of verifying, they accept the incidents as fate.
CEOs of consumer goods companies would rather not have to invest so much in that space, that is why third-party truckers come in handy. However, these third-party trucking companies are replicating the inefficiencies of the company-owned trucking system. The companies still have no visibility to the location of their goods per time. Companies still do not have local insights to what consumers think about their products in locations outside their corporate head office vicinities. These are the problems that technology-driven logistics look to address.
Lori Systems in Kenya brought this trucking business to limelight (not saying that they are the first to start the business in Africa), after they won the Startup Battlefield in Nairobi, Kenya. Since then, we have seen investments in many other similar or variations of startups including Trade Depot and Kobo360.
Delivery Science is one of the startups I will profile today. Delivery Science helps large organizations with a mobile driven platform to manage and monitor their distribution assets – people, products, customers and logistics smarter. Delivery Science brings a unique value to organizations – data gathering and aggregation. It “connects field to office”. The Data aggregation platforms allow for real-time collection and aggregation of market share, customer satisfaction, and quality-of-service information. This information was previously unavailable to organizations. They just distributed their products and hoped that consumers loved them. The platform also allows organizations to track field officers through its fully interactive map.
Truckit is trying to assist truck drivers and owners to optimize their trucks. It also offers services to smaller vehicle owners including minivans. Truckit appears to be playing the retail game, which is long and tough to win. It is trying to create an Uber for trucks by encouraging individuals to put their vehicles and trucks on the platform, while they match these trucks with loads from the supply base that they have built.
Trade Depot, on the other hand, is positioning to be the “engine of retail in emerging markets”. Through its platform, it can provide Secondary Distribution, which is the direct-to-retail distribution for the informal retail space, thereby helping FMCG companies achieve better retail coverage and demand discovery by providing simple tools to retailers, supported by Trade Depot’s field sales teams. It also provides Networked Distributors that leverage real-time integration between your back-office inventory systems and the stock held by your 3rd party logistics providers and in distributor warehouses for effective demand planning with accurate stock level information. Salesforce Automation – through its Retail CRM, Trade Depot uniquely delivers an optimized route-to-market approach for field sales teams, enabling businesses to flexibly plan and monitor sales routes and in-store execution for sales representatives and Finally, Trade Depot provides Trade Insights, Trade Intelligence and Retail Insights from millions of trade transactions in categories. Trade Depot runs targeted campaigns, prices products competitively, delivers the best brand mix to retailers and distributors and eliminates out-of-stock situations.
Trade depot seems to provide an end to end view on products, from factory to the performance of the product in stores, while giving the manufacturer the unique insight into its product performance in the market place, as well as working with the manufacturer to improve product perception and sales.
Kobo360 on the other hand focuses on the hard problem of logistics. It currently has over 5,900 trucks in its fleet, serving more than 450 customers and has moved over 55.6m kg of goods. Kobo360 facilitates insurance for the goods in transit, while giving real-time updates on the location of goods at every point. Kobo360 is taking over the logistics hassle from the manufactures. It manages the truck drivers, collects payment and ensures the safe delivery of the goods to their destinations. Kobo360 also allows members of the public (individual investor or pool of investors) to invest in a reliable truck with a seed investment of N14m per truck. This will ensure the continuous expansion of its fleet, while making money for the investor.
Back to the beginning, consumer and industrial goods companies are facing real challenges and these 4 companies and many more are working to solve these problems. Manufacturers can rest assured that their goods will get to their destinations; if anything goes wrong, they are insured. Additionally, these manufactures get unique on-the-ground insights about their products and how to improve their value offerings (previously unavailable to these companies). It is indeed a good time to be alive.
Next week, I will write about God is Good Motors, and how they are leading innovation in interstate travel and package delivery. I will also write about other incumbents in that space.