Disrupting Supply Chains: How Nigerian Startups Are Leveraging Technology to Solve Logistics Challenges

Inefficiencies in infrastructure, policy, and rising operational costs are the leading concerns of the logistics and supply chain industry in Africa. Unfortunately, Nigeria is not exempt. These challenges have contributed to a slower pace of economic growth across the continent, especially in the face of growing demand for efficient trade and transportation networks.

My near-decade long journey in the industry has exposed first-hand the complexities and limitations of traditional logistics systems. It has become increasingly evident that the magic of the industry’s transformation will only happen through the leverage of infrastructure for technological innovation.

However, in the last decade, startups in Africa have echoed this “transformation story” at a faster pace than intelligently conceivable. It has been an endless sermon on disrupting established logistics models and offering solutions that promise to redefine the landscape of supply chains across the continent. Nine years later, we are still waiting to witness this “disruption”.

At the core of Africa’s logistics challenges lies a deeply entrenched reliance on outdated infrastructure and processes. Poor transportation networks, inefficient ports, and cumbersome regulatory systems resulting in delayed shipments, high costs, and low levels of operational efficiency.

Interestingly, all the technology innovators tell us about these issues with the promise of a solution in their “novelties”. But with every new one that emerges follows the naivety of a toddler. Or perhaps, the deceit of a conman to voyage on another adventure to “disrupt the ecosystem” with someone else’s money.

Please don’t misunderstand me. My piece does not seek to disregard the thoughtfulness of startups or the transformative power of technology in logistics. In fact, it enforces it. Technology holds the key to addressing many of the sector’s most pressing issues and startups across the world are tapping into this potential, leveraging tools such as artificial intelligence (AI), machine learning, blockchain, and the Internet of Things (IoT) to innovate and optimize supply chains. In other parts of Africa, last-mile delivery companies are rapidly embracing innovation and making significant strides.

The final stretch of getting goods to their final destination is the most complex and costly part of the logistics process and it is exciting to see startups explore technologies such as drones and electric vehicles to address these challenges. These innovations offer the potential to reduce delivery times, lower carbon emissions, and cut costs. So it is absolutely impressive to see their agility and ability to quickly adopt and implement cutting-edge technologies. Unlike larger, more established logistics companies, which often face challenges in adapting their legacy systems to new innovations, startups are able to experiment and iterate rapidly. This flexibility allows them to develop solutions that address specific pain points within the logistics ecosystem.

Whether optimising delivery routes, improving warehouse management, or increasing transparency in supply chains through blockchain. For instance, AI-powered platforms are helping to refine route planning and reduce operational inefficiencies, while predictive analytics enable companies to anticipate demand and plan more accurately.

The integration of IoT technology is enabling real-time monitoring of goods and assets, ensuring improved visibility and reducing the risk of theft or loss in transit. These technologies not only offer tangible operational benefits but also help to build trust and improve customer experience, two essential components for the success of any logistics operation.

More personally, the experience of working in startups has helped my career in a manner that has allowed me the opportunity to lead the development of a third-party logistics (3PL) model designed to streamline the connection between asset owners and goods belonging to proprietors. So I believe that technology is a resourceful solution that works! But at the risk of sounding controversial, I say in the same breath that it’s all fables and tales if the right infrastructure and policies are not in place.

Technology is only effective when it’s dependent on the quality of available infrastructure. For instance, apps by Kobo360 or Lori Systems will only thrive in regions with good roads and functional truck networks. Sadly, in climes with worsening infrastructure leakages, unstable power and deficient internet connectivity are first cousins complicating the potentials of a new horizon with the use of technology, and neither Lori nor Kobo360 can do anything about it. They have both struggled with the implementation of tech like IoT sensors, GPS trackers and their proprietary logistics apps. The problems range from the impossibility to optimize route planning because dilapidated roads and curious tailbacks will defy AI and data analytics. Then to other issues like the impact of the bad roads on asset maintenance resulting in frequent breakdowns, the proliferation of overaged assets, cargo theft and hijacking due to weak security infrastructure, the nightmare of getting illiterate drivers (who constitute 90% of the 3PL sector) to adopt and effectively utilise the technology, the proprietors to at the least, integrate their internal ERPs with the 3PL companies’ solution and a lot more that continues to threaten the entire idea of digitizing logistics in the country.

In more instances than less, it is concerning that beyond the deficits of infrastructure, lies the ineffectual utilization of tech by key stakeholders. This implies that even if the underlying issues are fixed, it will take a toll to achieve full adoption from the traditional,

manual processes that impede transparency and efficiency. The secondary issue being the absence of a societal culture that fosters creativity and bold problem-solving becomes primary, and sadly, its pervasive stench rents the logistics sector. So in shifting away from the backbone roles the authorities must play in developing systems and formulating (and implementing) policies remains the dire need for operators to embrace new thinking and fresh ideas if it is to overcome the systemic inefficiencies that continue to deter progress.
But it is not all dark and doom for the industry in Nigeria. One exciting development is the rise of digital payment solutions and the increasing role of fintech in logistics. As e-commerce continues to grow, digital payment systems are becoming an essential component of efficient supply chains. By enabling seamless transactions and facilitating the movement of goods across borders, fintech solutions are helping to streamline payment processes, making logistics operations more fluid and less prone to delays caused by payment bottlenecks.

Conclusively, the future of logistics in Nigeria will rely heavily on deliberate investments in infrastructure, policies, and mindset. The integration of technology is the icing on the cake. Innovations will only be possible when underdeveloped infrastructure, fragmentation and greater investment in capacity building and workforce training have been addressed.

Emmanuel Ode
Writes from Lagos