How startups are disrupting Nigeria’s logistics industry with technology

According to a global report by Cisco, the Internet of Things (IoT) will present an opportunity for the global logistics industry to hit $1.9trillion by 2020. The said report also estimated that by 2020, more than 50billion objects would be connected to the Internet, compared to a little over five billion objects presently connected. The logistics value chain in Africa, meanwhile, is currently estimated at $150billion.

In the developed nations, logistics technology companies are already using the IoT in different ways. One of such companies is Zipment, a logistics firm based in New York. It provides services like offering freight quotes and trucking capacity and does not own any asset. It uses humidity and temperature sensors that constantly monitor the supply-chain and quality control, thereby experimenting the technologies that detect when a delivery or package has been tampered with.

Unfortunately, Nigeria does not possess the requisite technology solutions, for example, IoT and 5G, or the necessary infrastructure such as good roads and modern rail system among others to optimise its logistics ecosystem and grow the economy like other countries in the developed world.

According to the 2018 Logistics and Supply Chain Industry report, logistics sub-sector of Nigerian economy stands at N250billion. The report also said that the value of the logistics sector as at 2017 was N200billion in terms of the value of goods and services as well as the value of the decayed infrastructure.

Meanwhile, the 2018 report was intended to drive organisations to scientifically manage their logistics operations with a view to increasing value for their businesses while keeping cost and capacity issues in check. But a competitive logistics and supply chain ecosystem requires a constant and strategic upgrade of technological and regional infrastructure-mix which is currently lacking.

GIG Logistics (with 70 percent locations nationwide) and Efex Express are among logistics firms known in Nigeria. Founded in 2012, GIG has defined its freight forwarding and e-commerce logistics market path in Nigeria. And so do Efex and other competitors in that sector.

Nigerian startups from edutech to agritech and from fintech to logistics-tech are already disrupting the country’s space with cutting-edge technologies., a digital logistics platform appears to be leading the pack of disrupters in that space by deploying some of the latest technological inventions.

Considering when it ventured into the Nigerian market in 2016, the company stands at the forefront of logistics, covering over 80% of the country and recording a 40% cost reduction in the supply chain. It recently expanded its operations into Accra, Ghana and Nairobi, Kenya.

Backed by international and African investors, including International Finance Corporation (IFC), Y Combinator and TLcom, Kobo360 is reportedly poised to build a global logistics operating system (G-LOS) that will power trade and commerce across Africa and Emerging Markets. Its partners include Dangote Group, DHL, Unilever and Lafarge and it has reportedly moved over 297M KG of goods, serviced over 1,450 businesses and aggregated a fleet of over 10,000 drivers and trucks.

Chief Operating Officer, West Africa of Kobo360, Bilal Abdullah said in a report that the company aimed at using data and technology to match user requests with a selection of quality trucks of all categories and across all regions of its country of operation. Using a combination of its mobile technology and analytics, Kobo360 is fixing inefficiencies which exist in the road-based logistics business, delivering value to its global logistics partners, including Flour Mills of Nigeria.

A survey carried out by the Lagos Chamber of Commerce and Industry (LCCI), members of the Organised Private Sector and the Centre for International Private Enterprises in 2018, showed that the Nigerian economy lost an estimated annual revenue of N3.46trillion due to the current crisis of poor infrastructure, poor implementation and corruption at the ports, of which N2.5trillion were corporate earnings losses across the various sectors of the economy.

Interestingly, various components of e-commerce, e-retailing, data mining and data warehousing, which are critical operational elements of the logistics industry are being redefined by technology.

However, according to the World Bank’s Logistics Performance Index, there are some factors other than the proliferation of e-commerce companies. It considers, among other factors, time delay in international shipment; poor tracking and tracing capabilities; poor logistics quality; competence and efficiency of customs clearance process; quality of logistics services; ability to track and trace consignments; frequency with which shipment reach the consignee within the scheduled time; quality of trade and transport-related infrastructure and ease of arranging competitively priced shipment.

Simply put, the benchmark for measuring the success and growth of any logistic industry is inevitably dependent on the adoption of technology and availability of infrastructure. Nigeria’s startup logistics tech companies such as Kobo360 may have negotiated the fast lane of technology, whether the quality of trade and transport-related infrastructure required for them to thrive will be provided by the government remains to be seen. Moreover, the Internet of Things which can only be powered by 5G is still far from African shores.


Leave a Reply

Your email address will not be published. Required fields are marked *


    No comments found.