“In Africa, it is the consumer who pays the additional cost of logistical failures”

2023-08-27 19:30:05

Jean-Claude Homawoo is managing director and co-founder of Lori Systems, which presents itself as the leader in e-logistics in Africa (its turnover is not public). An “Uber of trucks” which connects a network of some 20,000 vehicles owned by local carriers with companies that want to transport their raw materials or finished products. From the major Kenyan or Nigerian ports to the landlocked cities of the Central African Republic, and vice versa: its trucks, the main means of transport on the continent, criss-cross the roads of a dozen countries with the aim of improving fluidity and therefore reducing disproportionate costs logistics, which, according to the start-up, can represent up to 75% of the final price of a good in Africa.

What’s stuck in logistics in Africa?

We first have a problem of circulation of capital. If you are shipping a container from Rotterdam to Mombasa [le grand port du Kenya], for example, you pay the shipping companies in advance, even before it moves. On the other hand, when this container is put on a truck to reach its final destination in Africa, the local transporter will not be paid for at least thirty days, even forty-five or even sixty days. We are talking here about African transport SMEs that never have access to bank loans. They will have to advance the gasoline, pay the driver, provide money to pay the police on the road… If the destination of this same container is Kampala [Ouganda]it might cost them $2,000 [1 850 euros] by truck. So, in Africa, the weakest link in the supply chain is asked to finance the transport of goods, sometimes for very large companies. It’s a shame. In this context, the carrier will raise its prices, which is why freight is so expensive in Africa.

We talk a lot about the state of the roads as the first problem…

For us this is not the case. The bad roads are not the main roads, they are the ones that go to the small villages and the consumption is not there. Of course there are road problems, but it’s more traffic jams, border crossings, etc. If you’re shipping, say, steel to a factory that’s going to process it and you’re stuck at the border for a week, during that time the factory is full of workers who are getting paid, and the line isn’t moving . That too costs.

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With what consequences?

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