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Value of Nigeria’s logistics market estimated at $80bn
Value of Nigeria’s logistics market has been estimated at $80 billion with lots of possibilities to scale further, Obi Ozor, founder of Kobo360, a logistics firm has said.
Assessing how technology and strategic partnerships could serve as catalyst for further development of the industry, Ozor was delighted about the potentials in the industry despite the myriads of challenges confronting it.
Justifying the value, Ozor who said his firm has worked with some principal players in the sector like Chisco, Dangote, Nigeria Railway, Maersk Line, Nestle, Lafarge, and partners in Kenya, and Ghana, said there are about 90 million trucks movements annually, and the average trip revenue is about $923.
Ozor revealed that the market over-charges customers by over 50 per cent due to inability of trucks to find goods on reverse journey after offloading goods at a certain destination.
He said logistics cost in Africa is about 150 per cent because operators assume that there will be no reverse logistics. “Customers are overcharged by at least 50 per cent, but KoboApp is solving this problem as it dispatches about 72 per cent of trucks with both forward and reverse logistics, thereby saving customers at least 30 per cent which is ploughed back to grow their businesses”.
On the impact of Kobo360 in the area of technology disruption, Ozor said his firm is using technology to tackle the issue of pricing. “We have removed the opaque pricing, as there is too much of bargaining back and forth. We have been able to nip this challenge in the bud using our proprietary algorithm known as Hedge logistics, and it’s on our new KoboApp which was made available to the public last October”
Ozor who was speaking to newsmen recently in Lagos also identified supply as one of the most critical problems in the logistics industry due to the shortage of trucks. “The cost of a truck is N32 million and that makes it difficult for any investor to finance that because it’s quite exorbitant.
“Aside from the likes of Dangote, who owns more than 7,000 trucks, other companies just don’t have the capital to purchase such fleet or have the human resources to run the operations. Many manufactures would rather invest in the business to increase capacity while they rely on KoboApp to access hundreds of trucks on the platform. We have seen industry titans embrace the KoboApp to increase logistics capacity: Lafarge, Dangote, Nestle, PZ Cussons, Flour Mills, and others”.
He said his firm is able to secure business from large enterprises because of its ability to pay drivers upfront instead of the drivers waiting for a month for payment from some enterprises. “This also helps a lot of large enterprises to manage cashflow well while we take that headache off from them. We also have N25 million insurance on every trucking trip to ensure that customers enjoy peace of mind. Most importantly, the customer enjoys real-time visibility through the app which combines driver and truck tracking all on your phone”.
The whole idea is that all the truckers could make at least 8 trips in a month with the KoboApp. The app is really revolutionizing the logistics industry. For the first time, drivers and truck owners can open their phone and access more than 800 trips requests daily, customers can now get as much truck as they need from the click of a button. KoboApp is on track to aggregate more than 250,000 trucks out of the estimated 900,000 trucks across West Africa by end of 2018, he said.
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