Understanding The On-Demand Logistics Service Market In Africa

As an entrepreneur, it is important to look for new opportunities every now and then to grow your business. 

Transporting goods from one place to another seems to be a strength in Africa, and it’s time to introduce an on-demand logistics service in the continent. 

You’ll get to know the logistics market in Africa, trends that are growing and how to implement them, and lastly, some examples of on-demand businesses doing great out there! 

Let’s get going! 

What is an on-demand logistics service?

An on-demand logistics service has an online platform that aids you in the pickup and delivery of goods, depending on the real-time location and other parameters such as distance, customer proximity, delivery time slots management, and more! 

The on-demand logistics business app serves as a connecting platform between the service providers and the people who want the logistics service. 

An amount of commission is extracted from the end-users and it becomes the income of both the admin and the logistics service provider. 

What is the future prospect of logistics services in Africa? 

South Africa seems to be having one of the most reliable transportation and logistics sectors in the world. 

The growth rate of the South African logistics industry is about 4% in the year 2020, and it is estimated to grow even more.

The pandemic hasn’t affected the road freight logistics industry in South Africa. The percentage of e-commerce customers has systematically gone up. This means the market of logistics services is breathing just fine! 

Trends that show Africa is the right market for on-demand logistics services:

These are the three major trends that could shape the future of the logistics industry in Africa. And we insist you do in-depth research on the same! 

The African Continental Free Trade Agreement that came into force on 30th May 2019 formulated by the World Trade Organization has made Africa one of the largest free trade areas. 

The African companies have slashing border tariffs to cross-continent for business engagements. 

The three trends to follow to maintain business excellence is to;

  • Bridge the gap between the urban and rural through logistics services. 
  • Digitization of the logistics services. 
  • Increasing the B2B on-demand logistics companies in the continent. 

9 things to note when you start an on-demand logistics service in Africa

When planning to start an on-demand logistics business in Africa, you have to follow these 9 basic steps to make the process more trackable and methodological. 

  1. Try to understand the customer’s needs, tastes and preferences by conducting thorough market research. It could be a survey or talking to business owners who would like to simplify their delivery process, etc. 
  2. Check out the financial performance, the platform performance, the market, and the strategies your competitors implemented in the continent. 
  3. Learn about the legal procedures to start an on-demand logistics business in the African continent and stick to them. 
  4. Narrow down your business plan and needs for your on-demand logistics platform. 
  5. Find an appropriate software development team that’ll help you create an on-demand platform (app) that is equally new and user-friendly. 
  6. Make sure about their tech support, before and after-sales support, and pricing plans. So it fits your budget. 
  7. Think about your business and revenue model to implement in your on-demand logistics business. 

[Recommendation – Aggregate business model & commission-based revenue model] – do your research! 

  1. Brainstorm what features and functionalities that the people from the particular locality prefer in your on-demand logistics app. 
  2. Create an online presence using social media once your logistics business is up and running.

Tech startups in Africa that provide on-demand logistic services:

Let’s get to know about the two tech startups that are going great in the on-demand logistics industry in Africa. 

Fast Van:

Fast Van is an on-demand network of local couriers started in the year 2015 in Johannesburg, South Africa. Their primary focus of the business is to work on major delivery services and courier delivery. They have both a web solution and an app for customers to make their bookings. They also have a real-time tracking system. 

Droppa:

Droppa is an on-demand delivery marketplace that helps in transporting light cargo such as furniture and other household items. It was founded in 2015 and is located in Midrand, South Africa. This on-demand platform connects the shippers, a network of truck drivers, and the end customers.

Conclusion

Starting an on-demand logistics service involves a lot of research, patience, and market understanding. Also, having the right budget to procure the apt on-demand logistics app for your business makes all the difference in running and maintaining a successful business in Africa!  

Do think about it and make the best choice! Cheers! 

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