Logistics – Global Supply Chains Remain Fragile in SA; Jumia’s Deliveries Improve, Bolt suffers in Tanzania, Lori Grows in Kenya
PwC South Africa’s South Africa Economic Outlook 2022 report reports that local container shipments for export in SA declined by 17.5% year-on-year during the second quarter of 2022 as port activity was impacted by international supply chain disruptions, load-shedding, and flooding in KwaZulu-Natal. The report focused on local companies finding growth opportunities abroad, ranging from exports to direct investment deals. Apart from the transient supply chain challenges, the report shows that SA ports are also challenged by operational inefficiencies. This creates problems for the supply of goods for ecommerce, as well as fulfillment of orders.
Between April and June 2022, around 60% of its deliveries of physical goods were made within a day, according to Jumia’s latest quarterly report released this week. In the first 3 months of this financial year, the figure stood at 57%. Jumia delivered 10.3m orders in the second quarter of 2022, 35% more than the same period last year. Along with the first quarter’s figure, up to 5 million more deliveries were made in the first half of this year than during the same period of 2021.
Bolt, the ride-hailing company, has been forced to change its business model following regulation from Tanzania’s Land Transport Regulatory Authority (LATRA), which requires that ride-hailing operators collect a maximum of 15% commission from their drivers. The company, sensing the impact on its business, disputed the fee. Although the company went on to engage with relevant stakeholders hoping to reach favourable tariff and commission regulations, the introduction of its new business model signifies the engagement was futile. The Estonian ride-hailing company maintains that a 15% commission in contrast to its previous 20% charge is not sustainable for its operations in the country, hence the need for a change in the operational model. So rather than closing its operations in the country, Bolt has switched to corporate client servicing.
Nairobi-based Lori Systems, an e-logistics company digitising haulage and providing shippers with solutions to manage their cargo and transporters efficiently, has raised funding from Google to help it to continue to expand across the continent. Founded in 2016, Lori Systems provides supply chain management solutions to cargo owners, ensuring flexibility, reliability, and cost savings. So far, the startup has helped thousands of shippers and carriers move over US$10bn worth of cargo across the continent, and it is now active in 13 countries, including Uganda, Rwanda, South Sudan, and Nigeria. Lori secured funding and support from Imperial, an African and European-focused provider of integrated market access and logistics solutions, back in 2020, and it has now added Google to its roster of investors as it plans to continue expansion to frontier markets across the continent and beyond. This new investment is the third from Google’s US$50m Africa Investment Fund, which CEO, Sundar Pichai, announced in October 2021, and also comes off the back of the launch of Google’s first product development centre in Africa – also in Nairobi, Kenya.
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