How technology is bridging logistical infrastructure gaps in Africa
This post was written by Tshepo Morabane, Co-Founder & COO of MEST portfolio company Truckr Technologies (TruckrTech), an end-to-end tool that enables cargo owners in Ghana to book trucks and track the progress of their shipments.
Technology has played a major role in transforming the way business is conducted. Robotics and automation technologies are steadily substituting labor for tasks like picking and packing, internal routing and material flow and loading /off-loading. As the 4th industrial revolution takes shape, the industry requires companies to provide on-demand, personalized and secure modes of doing business, where the consumer is afforded new transactional control.
We find that one of the biggest beneficiaries of this opportunity is the Transport and Logistics industry, also argued by Nicolas Debock on Medium. This is an industry that can now connect a “raw and unprocessed” product to a consumer who is “comfortable and in bed”, demonstrating how comprehensive the logistics supply chain is becoming through technological intervention.
Logistics Industry
The Logistics Industry is estimated to be worth US$4.6 trillion by PwC in its report on The Future of the Logistics Industry. The report takes into account logistics service provisions such as carrying, couriering, freight forwarding and handling.
Despite the comprehensive advancements made by the big multinationals such as DHL and others, the African logistics terrain continues to be disadvantaged by physical and digital infrastructure. Building and maintaining infrastructure is expensive but critical to economic development.
A number of African countries are making great strides in bridging the gap by investing heavily in infrastructure. An example is Ghana’s ambitious One District One Factory Policy to boost local manufacturing. According to Issah Abdullai Gombilla the challenges in Ghana extend to fragmentation, “with 80% of operators owning less than five trucks, and most of them being lane specific.”
For the purposes of sustainable development, African businesses are to adopt the principles of SDG number 9 which promotes investment in Innovation and Infrastructure.
Digital advancements impact the way we manage logistics
Perhaps there is a shortcut for Africa, a much faster way to play catch up. In the recent past, we have seen how technology and innovation have played a major role in reshaping the global economy. Albert Zeufack, World Bank Chief Economist for Africa, says that “digital transformation can increase growth by nearly two percentage points per year and reduce poverty by one percentage point per year in sub-Saharan Africa alone”. This is a game changer for Africa.
Many industries are being impacted and transformed by digital infrastructure all over the world. We see this in the rapid rise of e-commerce, which is set to become the largest retail channel globally. As argued by Forbes, it brings people’s shopping experience online with new complexities in warehousing and supply chain activities.
Other considerable advancements are made by those choosing to take on those logistical question marks brought about by the e-commerce experience. We are proud to note that the call to action has been heeded by young minds across the continent of Africa — specifically making mention of some key players in Ghana:
- Vestracker, now Metlo, which has developed cloud-based software that allows freight forwarders to easily track consignments
- Jetstream, a supply chain platform that makes global logistics easy for African suppliers
- Then there are those providing easy investment in farming activities, like Complete Farmer
- And, TrotroTractor increasing the mechanization of farming activities through USSD provided tractors.
Where we fit on the value chain is in the transportation and haulage space. We, at Truckr Technologies, aim to seamlessly connect trucking companies and their drivers with cargo owners such as freight forwarders, shippers, farmers, distributors, manufacturers, etc at the tap of a button. We are playing our part in bridging the digital divide between transporter and shipper.
Transport and logistics in Ghana
It is not news that infrastructure development in Africa has taken a backseat for a long time, and Ghana is no exception. The road networks are few and far between, with only one motorway linking the Tema port and the capital city of Accra. The condition of the road infrastructure has depreciated, causing an unpleasant driving experience for all motorists.
Beyond physical infrastructural issues, Truckr has identified more operational challenges in the transport and logistics Industry.
- Cumbersome operations
Trucking business owners can easily get overwhelmed by the number of tasks that they have to perform to get a shipment right. The majority of these businesses still use phone calls from agents to get new business, wasting a lot of valuable time that can be allocated to other crucial business functions.
2. Empty trucks — lost revenue opportunities
Trucks often come back fully empty on the return leg of their trip, essentially wasting fuel and contributing to severe underutilization of load capacity. Getting freight trucks to be fully loaded on return trips has become a hefty task which, if properly executed, can unlock new revenue opportunities and better resource utilization overall.
3. High agent fees
The middleman, or the agent in the trucking industry, usually takes hefty commission fees for bringing new business. Because trucking business owners depend heavily on these agents to get new shipment requests, they usually agree to their demands, resulting in lower profit margins or higher shipping costs for customers if they decide to put the cargo on them. This can be solved in part through access to a digital marketplace.
4. Security issues
Truck owners often have little or no information on the location of their trucks and drivers, as no tracking technology is being used. Using phone calls is time consuming, error-prone, distracting and creates a critical communication gap. Owing to the lack of control and tracking, issues like misuse of trucks, cargo being stolen, and delays in delivery have become common. Handling emergency situations also becomes difficult and, without cargo-in-transit insurance, these inefficiencies become very costly for businesses to handle.
These are real issues experienced by shippers and transporters in Ghana and across the continent. After our successful launch of the Truckr app in beta, we are making progress toward tackling these problems. We’ve been able to provide 5% cost savings on transportation, timely shipment with real-time tracking and competitive rates on Goods-In-Transit Insurance to our individual users, distributors and top manufacturers/producers in Ghana, and have since completed over 40 in-app trips /month.
The overall role of technology in building new infrastructure
Looking at the bigger picture, it is plausible that technology would advance Africa’s developmental agenda at a rapid pace. New transportation infrastructure will overtake otherwise inadequate road infrastructure.
This can be seen with companies such as Zipline who is using drone technology to deliver critical medication to remote areas. Other technological advancements are building infrastructure to harness renewable energy. A key player in the space is Azuri Technologies who providing pay-as-you-go solar power and connecting off-grid households to the modern digital world.
Join key industry players at the Mest Africa Summit 2019 to discuss how advancing technology will be the game changer for Africa’s infrastructure challenges!
