How African trucking corporations try to make every little thing cheaper

Trucking firm wants to shake up cargo deliveries

Among the “e-logistics” companies trying to shake up the transportation of products is Kenya’s Lori Systems, which makes use of a cloud-based platform to attach corporations desirous to shift cargo with the truck drivers who can transfer it.

“We manage a network of tens of thousands of trucks,” says Jean-Claude Homawoo, co-founder of Lori Systems, which works throughout 10 international locations in Africa. His prospects embody Nestlé (NSRGY), Dangote and Honeywell (HON).

“If one [truck] breaks down, that’s not an issue because we can send another,” he tells Source Business. “Or if the cargo is not ready, we can send that transporter to another site. As long as we keep trucks moving and they’re not running empty miles, which is costly, we believe that the prices will continue to come down.”

Poor infrastructure and logistics can add between 40% and 60% to the price of items in Africa, in accordance with a report this month by the International Finance Corporation (IFC) and Google.

“Even within local markets, inefficient distribution networks can lead locally grown fresh produce to cost substantially more in Africa than in developed markets, even though the cost of labor is substantially less,” says William Sonneborn, senior director of the IFC, a part of the World Bank group.

With higher logistics, Africa may very well be an even bigger exporter of contemporary fruit, says Sonneborn. A cumbersome provide chain means fruit grown on the continent usually spoils earlier than reaching its vacation spot, or it may’t compete on value.

“As you fix the whole system, which includes e-logistics and some investments in ports and other key infrastructure assets, you are creating the opportunity for exports,” he says.

Impact on the digital financial system

Homawoo says Lori Systems has raised “north of $25 million” in funding. Sendy, one other Kenyan e-logistics firm, raised $20 million in an funding spherical backed by Toyota (TM) in January, and final 12 months, Nigeria’s Kobo360 raised $20 million from Goldman Sachs (FADXX) and different buyers.

But Sonneborn says that for e-logistics to actually make an affect, extra monetary backing is required, in addition to extra digital expertise on the continent.

The IFC report cites e-logistics startups as key in rising Africa’s web financial system, which may very well be price $180 billion by 2025, accounting for greater than 5% of the continent’s gross home product.

Homawoo believes that the sector might assist remodel African economies. “If we can make logistics more efficient, the opportunities are endless,” he says.

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