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.
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“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.
“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.
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.
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.
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.”
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.
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.
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Attaining food security in Nigeria is beyond having more farmers – Christopher Abiodun, Co-founder, FarmCrowdy
On Nairametrics Business Half Hour, Co-founder of FarmCrowdy, Christopher Abiodun discusses everything Agriculture.
Nigeria is nowhere close to attaining food security, and this is no secret. Very recently, President Muhammadu Buhari encouraged more people to venture into farming and increase farm produce “so that we don’t have to import,” as Nigeria has no money to import foods.
However, Co-founder and Chief Technology Officer at Farmcrowdy, Christopher Abiodun, thinks that attaining food security in Nigeria is much more than having more farmers.
Speaking as a guest at the Nairametrics Business Half Hour, Abiodun notes that there is a lot of waste along the Agricultural value chain in Nigeria, due to the dearth of processing and storage players in the chain.
“There is a lot of planting going on, but there are a lot of post-harvest losses so it goes beyond planting. Most farmers don’t have where to sell their produce, and even if they do, they don’t know how to get it to where it supposed to be sold. The result is that we have as much as 40% waste across the value chain.”
He further explains that Nigerians need to think more about venturing into processing and preservation, instead of more planting. Some farm produce perish within 48 hours or less if they are not gotten across to the end consumers, so building a processing plant close to the farm will help largely reduce some of the post-harvest losses.
Everybody wants to get land and start planting, but there are many places to key into the value chain that can help the entire results. Access roads to the farm can also work wonders for the entire agriculture food chain. There is a lot of support coming from the government and CBN for farmers coming through the enablers, but support has to be channelled into processing and proper storage.
Farmcrowdy and food security
In January 2016, Onyeka Akumah reached out to his friends and co-founders Ifeanyi Anazodo, Akindele Philips, Christopher Abiodun, and Temitope Omotolani with a new idea to connect farmers to funds. Together, the team had experts in tech, data, finance and agriculture who left their jobs to get the business off the ground.
By November 14, 2016, Farmcrowdy commenced operations as an agri-tech platform to help small farmholders achieve food security by crowdsourcing funds from individuals, and helping the farmers with the necessary technology to boost food production.
“What we discovered is that instead of giving farmers the money, it is better to buy input and take to them and teach them how to use to achieve needed results. Then we mop up harvest and move it to buyers,” Abiodun explains.
At the end of the farming cycle, sponsors receive their capital with 40% of total returns, farmers get 40% returns and the company keeps 20% of the returns.
By early 2019, in a bid to shed off the capital-intensive model, the crowdsourcing platform was separated from the agri-tech company, making Crowdyvest different from Farmcrowdy. Under the new structure, Farmcrowdy structured finance provides farmers and low-income earners with small loans or small capitals to farm; Farmcrowdy aggregation moves the products from the farm gates to the processors after the harvest; Farmcrowdy marketing helps different small holders or small scale businesses to push their products out into the market using topnotch marketing strategies.
Farmcrowdy Insurance connects farmers to insurance companies so that they can insure their health, farms, farm produce; while Farmcrowdy technology & data services all other arms by getting and keeping data which will later be used to make informed decisions.
The lockdown resulting from the COVID-19 brought up a new business model for Farmcrowdy. People could not go out to get food for themselves. Farmcrowdy foods was launched in April as a B2C to allow users order food and meat from the app and have them delivered at their doorsteps.
Farmcrowdy as an agri-tech company does not deal with individual farmers, but with farming communities and associations that will make it easier and more productive to hold the farmers accountable through their leaders.
There is sometimes the issue of trust, with the old farmers wanting to stick with heir old methods and traditional ideas of farming. Abiodun says they handle the trust issues by using some plots of land to run pilot studies where the farmers can now see the improved production process and results.
“If you can show them something that works, then they will come to trust the process,” Abiodun said.
“Agriculture goes beyond planting” | Christopher Abiodun Co-Founder and CTO FarmCrowdy | BHH