Africa Logistics

More than half of top most global companies are situated in Africa which is rapidly changing the current situation of African Business. The Continent abruptly has become the prime destination for multinational companies to functionalize their operation. Recently the government’s approach and many large entities has been involved to improve the logistics infrastructure in the states which in result captivated the existing companies to expand their business and branch out regionally from one African country to another. As the projects for infrastructures and policy improvements has been undertaken, in no time FMCG, Retails, E-commerce, Pharmaceutical industry have been seen to grow in the states of African Countries, howbeit E-commerce industry has been heading up with a greater pace in the African market, Since the logistics infrastructure is being slightly challenged in the African Countries, E-commerce sector is yet to be placed where it would be. Certainly the mobile phone users in Africa has been immensely increased in numbers more than 500 million where it was taken 20 years to connect 100 million and attracted 200 million more users in just next 3 years which turned a massive upshot for internet business scopes of internet business.

1. Challenges are not challenges but opportunities :

Africa’s potential as open source and newly developing market having natural resources and invitation to the new players on the board for business will surely portray a big screen of earning for the logistic service providers. Moreover increased data connectivity, mobile financial services and data usage of smartphones will boost up audience on e-commerce platform but as sweet it sounds as that hard to be successful in the exploitative market of Africa. Big private entities will quite smoothly pass through the current phases of the continent despite may not be having the international level of services or may have to follow a constructive process nonetheless they also bang onto few challenges such as –

  • Political reform
  • Cross border
  • Massive shortfall of infrastructure
  • Forging the right partnership in the local market
  • Implementation of technologies due to integration and local support

Scenario has been rapidly changing in the on-going market with Government’s support and their flexible policies to attract foreign direct investments. Recently around 50 billion $ has been sanctioned by African development bank to develop the road map, here the mission of developing logistics infrastructure does not get stopped. There are numerous uplifting domestic industries has put their effort to build a streamline logistics network even ‘World Bank’ invest more than 90 billion $ every year to narrow the infrastructure gap in Africa.

All the major problems apparently have been taken into account and government’s provision along with domestic trading growth ensure African market a booming opportunity for the logistics and e-commerce industrial. Political party is about to be stabilized, one stop border pass has been incorporated to move the goods to the different countries of Africa but the implementation of technologies suppose to be done according to time and specifically for the different states of the African countries.

Startup companies at the initial stage confront some obvious challenges in African Countries and these undefined challenges could have been optimized only by applying next generation logistics solution. Following observed factors are the key reasons for stagnant African internet business, especially e-commerce sector.

Distrust : Rich Africans have yet to embrace online shopping, due to online fraud. In Nigeria, for example, where phishing is common, people are skeptical about putting their credentials online. Some of the companies offer cash-on-delivery to mitigate this challenge.

Logistics : In Africa, it’s more complicated with non functioning postal systems. Online businesses operate delivery motorbikes, which increase the cost of doing business there.

Fragmented markets : For all the efforts to make Africa appear as one market, it is not. A company has to set up country-specific sites because of barriers from cross-border payments, languages, cultural differences, and other factors.

African open market : In Africa, there are “markets” everywhere. There are open markets, supermarkets, and even unemployed youth selling things at traffic stops in major cities. An e-commerce company must beat these entities on prices to be competitive.

2. Technological Approach :

For Last few years Africa has been welcoming several Technological Approaches but the growing challenges in order to match the standard of a developed logistics infrastructure and services with low cost is yet to be resolved apparently. To identify and streamline a gap in a growing market leading logistics service providers is prominently maintaining a close link to cloud based logistics solution. A  huge change towards successful scenario has been spotted in Phonace Delivery Service, Nigeria who implemented cloud based LogixERP to cop up with such current challenges.

Integrated modules and next generation tools enable monitoring system for Geo tagging of locations where actual delivery or pickup happens. Modern logistics solution provides real time tracking system not only to the sellers but the consumers also to track shipment until it reaches to the destination.

Since Africa’s complex logistics requirement encompasses multiple logistics vendors to move goods from one region to different, data may get processed in different varieties and blur the transparency between service providers and customers. Technology can bring multiple vendors together in a way where they will be able to exchange data and work in a synchronized manner.

Eg: Shipment is booked from Nairobi by Company A, Moved to Mombasa through a Bus Fleet company B. Delivered locally in Mombasa by bikers associated with Company C and all of them are hooked to each other so if customers track the package on a website they will be able to get full information.

Big contributors to e-commerce industries of Africa have assimilated Cash On Delivery (COD) system to carry out the logistics service into a next level. New technology can make it possible to collect the cash at remote areas after delivery or allow customers to deposit cash in local banks and account personnel from miles of distance will be able to realize payments with an updated receipt and electronic signature from the customers as a receiving receipt would have been a forwarding step.

Eg: E-commerce giant has turned this idea on to build a strong base of logistics service.

Nowadays wave of logistics is counting on Mobile applications. Easy and convenient use is about to twist the current logistics scenario of Africa. Accessibility has proved its worth especially in the remote areas and small cities where people would think twice to travel, Arriving technological applications in such areas is sufficiently compatible to manage delivery system through just a mobile application allowing delivery person in these areas to receive the package and update their delivery.

Warehouse management has been a big challenge in Africa since independence. The continent has many borders between the countries, WMS for every centralized logistics providers becomes hard to maintain with increasing number of warehouses. Technology boons logistics providers to move packages securely through Scanning process at every point. Inflow and Outflow of packages get scanned and verified against the system to ensure no wrong package move out of the facility. Next generation cloud logistics solution LogixERP auto communicate intimate SMS to customers regarding pick up vehicle details. Warehouse management has its easy access through LogixERP including management of Goods Receipt, Purchase Order, Customer Return, Invoicing and above possible approaches.

Summary :

Uplifting and fastest growing African market is highly profitable and opportunistic for small, medium and large logistics and eCommerce industries but to take a control on current challenges, innovation is highly important since huge amount of economical support is provided by different sources just technological approach is awaited. It’s time to take a high leap towards success using LogixERP specifically integrated for African market.