The “ubernisation” of last-mile delivery in Sub-Saharan Africa is taking shape. Traditional carriers and independent transporters still dominate the landscape, but mobile apps are increasingly becoming more popular — driven by high mobile internet penetration and young growing population.
Customers are searching for mobile solutions that offer real-time visibility, security, easy payment and low-cost delivery — in an industry previously untouched by technology. Below are several players trying to disrupt the African delivery and transportation landscape:
WumDrop has evolved from a diaper subscription service to a last mile delivery app. The company operates in Cape Town, Johannesburg, Durban, Pretoria, and sold a majority share to Makro, a South African retailer in 2017.
PicUp offers 90 minute, same-day and national delivery. The startup makes use of WeChat and customers can select the distribution means such as bicycle, scooter or vehicle — taking into consideration the size and type of package. Payments are made with a debit card or WeChat e-wallet, powered by PayU.
Pargo offers click-and-collect and return solutions for online and omni-channel businesses. The startup allows customers to send and receive parcels at dedicated pickup points — currently 750 around South Africa.
Sendr’s last mile delivery service differentiates themselves with a onetime password system. In order to receive a package, the recipient needs to provide the driver with the password. This not only eliminates potential security risks but safeguards against the wrong person receiving a package.
Rush allows customers to compare couriers, prices and delivery services in real-time, and select the best provider. The startup also offers insurance on parcels, underwritten by Hollard Insurance.
Fastvan, started as an eCourier platform targeting individual consumers, but has changed their model to an on-demand SaaS platform for logistics firms.
Sendy’s last mile package delivery service, accepts M-Pesa payments and provides insurance on packages. Sendy announced that they are piloting last mile drone deliveries in the Kenyan capital. Sendy operates in Kenya, Uganda, and Tanzania.
Lori Systems and Senga are on-demand trucking platforms connecting customers and transporters in the East African region. Lori Systems has operations in Uganda, Rwanda, South Sudan and Nigeria.
KOBO360’s digital platform aggregates end-to-end transportation — connecting customers with truckers. Besides Nigeria, they also have operations in Ghana, Kenya and Togo.
Max.ng and Parcel-it are targeting the busy streets of Lagos, using motorbike deliveries. Their mobile apps provide fast, reliable and affordable delivery of parcels.
Kamtar offers an online transportation booking platform targeting both businesses and individual consumers.
Aquantuo’s peer-to-peer (P2P) platform allows people to transport goods from one country to another — using spare space in their bag or vehicle.
Besew is a peer-to-peer courier service and also targets deliveries around the country. The system taps into the traditional way of transport collaboration, often used in open markets. To share transport costs and reduce less-than-truckloads, customers can connect with individuals who plan a trip to a selected location.
Musanga is an on-demand delivery startup and primarily works with FMCG brands to help them distribute their products countrywide. Deliveries are done by independent truck drivers.
Africa’s transportation challenges
Moving parcels and goods around the continent, is not always an easy task. Below are some factors impacting delivery and transportation on the continent:
Road network – Africa’s transport systems vary significantly across regions and countries. The Democratic Republic of the Congo (DRC) still has less than 3 000 km of paved roads, compared to Algeria in North Africa, of a similar size, that can boast of more than 70 000 km of paved roads.
Lead times and costs – The long lead times and high distribution costs are two of the biggest challenges for companies. Long supply chains and numerous intermediaries, are increasing supply chain costs and making supply chains less efficient. It is estimated that the cost of transporting goods is 60-70 percent higher than the US and Europe. Africa’s numerous landlocked countries further drive up transport costs.
The rough road factor – Transport costs escalate the rougher the road, as carriers need to factor in truck maintenance and potential breakdowns. In some countries there is an absence of all-season roads, isolating cities and villages during the rainy season.
Urban roads – In urban environments, customers are sometimes situated in congested areas with narrow gravel streets roads. In some cases, delivery vehicles can’t enter — delaying delivery teams, which sometimes need to travel on foot to reach customers. African cities often suffer from grid locked traffic — leaving many city residents and delivery companies frustrated.
Street addresses – The majority of people on the continent lack a street address and street signs often don’t have names. The lack of signage makes it difficult for companies to do deliveries and assign customers to routes.
Poor visibility – Supply chains often lack visibility on the continent. Often organisations don’t have the required information technology to track goods and share information with customers.
Third party logistics (3PLs) – In some African countries, organised 3PLs revolve around independent transporters with limited number of vehicles. Large 3PLs often cover the major road networks well, but might avoid tougher road — leaving these areas to smaller independent truckers.
Less-than-truckload – Retailers and businesses are fragmented, and volumes are lower — resulting in less-than-truckload deliveries driving up costs. Many truckers also struggle with backhauling and empty non-paying loads on return journeys.
Supply chain risks – African markets provide additional supply chain risk, ranging from breakdowns to conflicts, which leads to major disruptions in transportation.
Urbanisation – Two thirds of the African population still live in rural areas, significantly lower than other continents. In some African countries, a large percentage of the population is not linked to any major road network. For example in Ethiopia, 38 percent of the population is five or more hours away from a city of at least 50,000 people. But by 2030, it is estimated that around 50 percent of Africa’s population will be urbanised — putting additional pressure on the continent’s creaking city infrastructure.