Around the world, there are fears that drones and robots could take over a lot of jobs in the near future. For the Nigerian logistics sector, however, this is going to have its challenges.

The Nairametrics Business Half Hour radio show hosted Moses Enenwali, where he recounted how his inability to send a parcel out of the country during the lockdown led him to start Topship Logistics.

Moses said that a lot of real-life scenarios on Nigerian roads would have to be factored in, as well as the cost-effectiveness of the system.

Explore the Nairametrics Research Website for Economic and Financial Data

“One has to consider the bumpy roads, thugs on the roads, thieves and several others which are a possibility on Nigerian roads. One also has to factor the cost of the drones, and decide if it is cost-effective,” he explained.

As several sectors mourned the spread of the Coronavirus pandemic and the resultant shutdown of the global economy, entrepreneurs in the logistics sector were smiling to the bank, due to the sudden change in fortunes and the realization that the world was indeed going digital.

READ: NNPC GMD gives reasons for shutdown of refineries, to get private managers

“Logistics found me…”

Moses Enenwali, co-founder and CEO of Topship logistics, a business that rose from the dust of the pandemic, affirms that his faith in the logistics industry was strengthened at this time. With everyone locked in their homes and countries at this time, it became glaring that logistics was not only an important business, but an essential one.

In January 2014, he started out with Ernst & Young as an associate and worked there for about 17 months. He moved to Africa Courier Express (ACE) as a client manager, which formed his initial experience in logistics. He later worked with Sage as Strategic Business Development Manager, and as a consultant with Sahel Consulting.

Moses then served as a part of the Sendbox team responsible for driving supply-side growth across service lines. He recalled that all of those jobs gave him extensive experience in the logistics industry.

“I did not discover logistics. I think logistics found me. I was looking for a certain kind of leader and founder and that was what I found in Tunde Kehinde that inspired me to go work for ACE,” he recalled.

The business was born in the midst of the lockdown arising from the pandemic, at a time most people were looking for safer but cheaper options to move things in and out of Nigeria. Moses recalls that he was trying to move some things into the country and could not get one that suited his needs.

“I was able to find two providers but one of them was very expensive and difficult to understand, while the other was not selling to people like me who wanted one-offs,” Moses explained. This clearly showed a gap in the space and given his extensive experience in logistics, he reasoned that he could provide a solution.

READ: NIPOST’s new charges could have ruined the e-commerce/logistics industry

A light model that comes without strings

Logistics is a complicated and difficult space to operate in, and most startups there find themselves choked by the sheer enormity of the initial set-up costs and operating expenses. Often, they could struggle to recoup initial costs and loans before breaking even, or even contemplating expansion.

Topship started with the aggregator model – one that allows them to enter partnerships with parties that have some of the required startup resources. Instead of going for a mass purchase of vehicles, motorbikes or airplanes, the company entered several partnerships with these parties.

Moses explained, “This model allows us operate and scale significantly faster than most. We are like the Uber for logistics, aggregating partners and working with them to ensure that we give the most effective services.”

The model came from his previous work experiences. “ACE raised a lot of money but used a huge chunk to buy logistics assets and solve logistics problems so I learnt not to do that because that would make it even more capital intensive. At Sendbox, I also learnt that a lot of people are willing to partner with you when you present an opportunity to them to sign up on your platform, so we saw that the uber model can also work for logistics,” he said.

Customers for this business include students sending scripts and documents to countries like Canada, or small-scale entrepreneurs trying to export their products (wigs, shoes and bags), or even parents trying to send supplies to their children schooling in other countries. Corporate bodies also use the company for their logistics.

READ: Mr Bigg’s revamps operation, introduces contemporary restaurants 

Connecting with customers

Topship thrives on technology, which means that most of its customers connect digitally. Enenwali notes however that there is always need for a physical presence, even though the company offers doorstep pickup. “People want to know that there is a physical location where they can see and connect with you and know if their packages would have issues with the customs. They can walk in, weigh their packages and send the desired packages to their loved ones,” he explained.

Still in its first year of operation, Topship has two locations in Nigeria, one in Lagos and another in the Federal Capital Territory, Abuja. The goal is to have physical presence in all states of Nigeria, with a processing manager to man these centers.

To protect customer satisfaction, insurance policy is a necessity for fidelity guarantee, and theft of goods in transit, if they occur.

READ: Boeing to halt production of troubled 737 Max 

Business in the new normal

The new normal has come with new sets of rules on occupancy and social relations. Employees no longer meet physically to bounce ideas off one another. In this new plan, Topship has a bulk of its staff working remotely with just the processing manager left to work physically from the office. Customers have to abide by the new guidelines as well, to limit contact.

“It is not a work culture I am very comfortable with, but we all have to make adjustments for our safety. I like to look people in the eyes and interact with them, but there is only so much we can do with zoom.”

Raising funds

Having eliminated major expenses, the founders of Topship were able to bootstrap the initial costs. However, there are plans to raise funds from external investors for expansion purposes, since the model is not capital-intensive.

“Nigeria is opening up to the world and exporting her products to other countries. Local manufacturers in places like Lagos, Ibadan and Aba would like to take advantage of it. This means that there is a large market for us, and I believe that in the next five years, we would be a 200-300 million dollar business,” Moses said.

Topship logistics is aiming high in the Nigerian logistics market. Moses sees the business becoming a last stop for e-commerce businesses, given its rich network and model which allows it to handle on-demand deliveries and real-time deliveries. It is both cheaper and more effective so more businesses would be willing to key in.

Human capital

Topship operates a model that is centred around partnerships, and to protect this, the company uses Service Level Agreements (SLAs) to protect it from defaults.

“However, there are points where we have to employ empathy because we understand the situation in the country. Sometimes the dispatch riders make all attempts but traffic, rainfall or accidents could disrupt their arrival time so we have to apply a human face before dishing out sanctions,” he explained.

Besides the partnerships, there is a need for staff, and getting good manpower often poses a challenge for startups. Topship adopted a Stu-tern method, getting undergraduates and graduates interested in interning for a while where they learn while earning

“More importantly, I work with referrals from A players because I believe that A players know A players. The choice of staff can make your brand the best or worst for your customers,” Moses emphasized.

Dell Technologies has partnered with some global tech firms to establish a Tech Experience Centre in Nigeria. The centre is a technology project designed to bridge the gap to cutting-edge technologies for millions in the country.

This was disclosed in a statement issued by the company and seen by Nairametrics on Thursday.

In the statement, Nicholas Travers, Director, Central and West Africa, Dell Technologies explained that the project, which will be launched on October 1, would save huge costs and capital flight while also boosting technology adoption in Nigeria.

Explore the Nairametrics Research Website for Economic and Financial Data

He said, “We believe the Tech Experience Centre will help reduce the decision making cycle and save huge costs and time of traveling to locations outside our continent to visit and experience these technologies at work. This is a fantastic initiative by TD Africa, perhaps the first of its kind in the region and we are proud to be part of it.”

According to him, the project will go a long way in helping Dell Technologies showcase its suite of cutting-edge technologies.

‘‘The launch of the Experience Centre will support the growth of technology in Nigeria and the West African region. Also, it provides a fantastic platform for Dell Technologies to showcase the very many technologies we offer,” Travers added.

READ: How Apple lost over $500 billion in 12 trading days

Minister of Communications and Digital Economy, Dr Isa Ali Pantami, is expected to commission the Tech Experience Centre, the first of its kind in Africa.

Travers added that the Centre marked the first time global tech giants would come together to establish their respective experience centres under one roof to create a truly immersive and rich experience of latest technologies in action.

Leading carrier neutral data centre operator in West Africa, Rack Centre, has announced an expansion programme that will increase capacity to a total net lettable white space of 6000 square metres, which will pave way for 13MW of  IT power capacity in its Lagos campus.

This was disclosed in a press release by the company, which was seen by Nairametrics.

The expansion is expected to bring carrier neutral scale to West Africa, and this is in response to increasing demand for data centre space from cloud uptake, telecommunication investment and outsourcing of IT facilities by enterprises in the region.

READ: Multichoice, StarTimes, others’ reception increase by 23% in Nigeria- Report

The funding for this expansion will come from a $250m pan-African data centre platform, established by Actis and Convergence Partners, a leading ICT infrastructure investor in Africa.

In addition to the expansion in  Rack Centre, the platform is also actively developing additional buy and build opportunities across Africa, to establish a network of carrier neutral data centres aimed at catering to carrier, cloud and hyperscale customers. 

Back story:  It is noteworthy that on March 2020, in a bid to pave way for the expansion programme, Actis, a London private equity firm, announced an investment in Rack Centre, taking a controlling stake in the business alongside Jagal.

READ: Are we heading towards a food crisis?

Why this matters

Nigeria is a key entry point for global telecommunications, content, and cloud players seeking access to the region. Despite the potentials of the country; with 138 million internet subscribers, more than any country in Africa or Europe, and the largest population and GDP in Africa, a lack of cost-effective, energy-efficient IT infrastructure, has been a constraint to doing business in the region. 

However, in a bid to create unrestricted connectivity between customers, telecommunication carriers, and internet exchange points within its data centres in the region, as a unique scale carrier neutral player, Rack Centre brings global best practice to Nigeria, as the first carrier neutral data centre in the region, to achieve Uptime Institute Tier III Certification of Constructed Facility (TCCF).

READ: Lagos announces N10 billion public-private partnership for aquaculture centre

The global leaders that the platform has engaged include:

• Tim Parsonson, Co-founder, Teraco Data Environments – the largest carrier neutral operator in Africa, who joins the Board as Chairperson on the board.
• Frank Hassett, a veteran of the global data centre industry and previous Vice President of Infrastructure, at Equinix, brings over 1300MW of build and operate experience, to assist with hyperscale expansion.

While speaking on the expansion of capacity, Andile Ngcaba, Chairman of Convergence Partners, said;  “Africa is at the start of a critical time in its development, as the 4th industrial revolution offers the chance to leapfrog many of Africa’s challenges, and harness the immense potential of its people. Convergence Partners is delighted to partner with Actis in accelerating the growth of high quality data centre infrastructure, an indispensable part of the foundation of this revolution in the region.”

Dr Ayotunde Coker, Managing Director of Rack Centre, emphasized that the group is proud of the quality and scale bar which they have set in the region.

“We are proud of the quality and scale bar we have set in the region and are scaling to be the de-facto digital data hub for West Africa

“Mass adoption of digital working models and content distribution is driving growing investment in the region and Rack Centre offers a world class location to house these IT and telecoms facilities,” Coker said.

Supporting this ambition, engineering consultancy Arup, have been appointed for the project.  The leadership status of Arup is uncontested,  having designed over 2,000MW of IT capacity for industry-leading tech giants, and co-location providers across the globe.