Checklist for Partnering With a Logistics Providers in Africa

Partnering with logistics providers in Africa can be tricky, but with the right guide, you can navigate that industry for optimal experience.

The supply chain world is evolving, and in many cases, supply chains are no longer under a single house. 

Businesses are partnering with external stakeholders who can help them facilitate and process their supply chains better and faster.

However, when partnering with these stakeholders, there are checklists to look out for, and in this article, we review some of those for logistics providers in Africa, whether 3PL or 4PL.

 

 

What are Logistics Providers (3PL & 4PL)?

Logistics providers are businesses or suppliers who provide logistics services for another business or supply chain. 

These businesses are in the business of getting your supply chain flowing seamlessly.

Although logistics implies transportation, that is not always the case, especially with 4PL (fourth-party logistics services).

Logistics providers have evolved from mere logistics to offering inventory, warehousing, security, and transportation of goods and services between supply chains and their customers.

An example of a major global logistics company is Amazon. 

In Africa, you have Jumia and GIGM. These companies are helping businesses, especially e-commerce businesses, simplify their supply chain.

 

 

Why are Logistics Providers Important in Africa?

Logistics providers help you simplify your supply chain. Many businesses in Africa and the rest of the world outsource their entire supply chains to these companies.

Here are some of the reasons why.

 

Infrastructure Expertise

Africa is diverse and large, not just in population but in land mass with tricky terrains and poor infrastructure. 

Logistics providers have the expertise and resources to navigate these challenges seamlessly and efficiently.

 

Reducing Supply Chain Costs

Logistics providers help your supply chain cut down costs. They have the resources and capacity, including warehouse and transport vehicles, to help you transport and safeguard your goods and services at a much cheaper rate.

They do this by optimizing routes, consolidating shipments, and using their network of carriers to help you cut costs.

 

Risk Mitigation

Africa can be prone to various risks. Depending on your region, you must have heard or experienced the almost monthly coups.

Risks such as political instability have plagued the continent. In recent years, the continent and the rest of the world felt the impact of Covid-19.

You can develop risk mitigation strategies and contingency plans to address these challenges with logistics providers.

 

Market Expansion

E-commerce businesses are increasingly rampant on the continent, which is great. However, many of these businesses are small and lack the reach that logistic providers can provide.

Examples are businesses in the food industry or the Hair industry, which is very popular.

Food businesses can put up their menu on Apps like Jumia Foods, which helps them process and facilitate their orders for a fee.

Other industries can patronize 4PL businesses for the same effect.

 

Focus on core competencies

As we mentioned earlier, not every business is a supply chain guru or can afford to manage its supply chains, especially small businesses on the continent.

However, with logistics providers, these businesses can focus on their core competency, whether it is in R&D, marketing, or manufacturing while allowing their logistics partners to manage their entire supply chain.

 

 

So, How do you know the Right Logistics Provider to Partner With?

Partnering with the right logistics providers in Africa can be tricky, especially when you do not know what to look out for.

The following checklist will guide you.

 

1. History/Market Presence

When selecting a logistics business to partner with in Africa without prejudice to new logistics providers, consider their history and market presence.

Logistics providers with a history of on-time delivery, product safeguarding, and customer satisfaction are the way to go.

This business will typically have a very good presence or at least a substantial market share.

You favour these businesses because they have the pedigree and expertise to ensure your products are managed safely and efficiently.

Now, this doesn’t mean you shouldn’t consider new players in the industry, especially when they offer better deals. 

However, when considering them, always check the management team; you should be able to find comfort in their expertise and careers. If you don’t, approach with caution.

 

2. Infrastructure

Before partnering with a logistics service provider, consider their infrastructure and expertise. 

Do they have the necessary tools and technology to ensure that the portion of your outsourced supply chain will do better under their care?

This is a very important question you need to answer. You don’t want your supply chain to go from bad to worse in your bid to find a solution.

Infrastructure in this context typically involves vehicles, storage facilities, technology, and distribution centres that can help them effectively manage your supply chain process.

 

3. Visibility & Transparency

The modern supply chain is evolving even in Africa. Today, visibility and supply chain transparency are no longer cool features but are now essential aspects of supply chain management.

As much as it is essential within your supply chain, it is even more critical for your business partners to have this, which, in this case, is the logistics provider.

With visibility and transparency, you can track the movement of your products in real-time while monitoring the social responsibility of the business you are partnered with.

Supply chain visibility and transparency allow you to make an informed decision about your business without blindly trusting the report of the logistics provider.

For instance, if your goods take too long to get to your customers, that impacts your brand, which calls for concern. 

This allows you to decide whether to use a different service or talk to the logistics provider about improving the service.

 

4. Security

Your products cost money to produce or secure. Ensuring it is secured until it gets to the consumer is far from unreasonable, and it is your business’s right.

Partner with logistics providers who can secure your goods and services, whether it is through warehouse security to avoid theft and damages or adequate storage facilities for perishable goods.

For example, Apple requires a cooler temperature during long-distance transportation, which necessitates a special kind of storage for it. Petroleum products are another example.

Aside from the security of your product, you want to ensure the process between you and the consumer is secured against unnecessary disruptions that can impact your order cycle time.

 

5. Diversification of Services

Today, logistics providers in Africa offer much more than just transportation of goods and services, especially for small or e-commerce businesses.

Depending on the company, you can now access insurance, inventory management, international shipping, and warehouse/distribution.

For many e-commerce start-ups on the continent who just want to focus on marketing, these services can be very critical to the success of their business.

For instance, some e-commerce businesses ship straight from the source or supplier to the customer’s doorstep. This type of service is quite popular with businesses on Shopify, the Canadian behemoth.

 

6. Operational Capacity

This usually applies to bigger organizations with a lot of sales and production. When partnering with a logistics provider, you want to know it can handle your business efficiently despite its volume.

Organizations with large volumes typically need dedicated facilities from the logistics provider to ensure uninterrupted flow.

Before getting in bed with these companies, you must ensure they have the operational capacity to handle all your outsourced operations with ease.

For instance, if you do a truckload of shipment a day, the logistics provider should be able to handle that irrespective of any situation, with the exception of matters beyond their control, such as political instability.

The logistics provider’s operational capacity is a critical checklist when partnering with one. It could disrupt your entire supply chain process.

 

7. Cost

Logistics providers are primarily supposed to help you simplify your supply chain process and cut down on costs substantially. Otherwise, there is no reason to partner with them.

Factors like transportation costs, customs duties, warehousing fees, and any additional services required play a huge role in your cost considerations. Request detailed pricing quotes and compare them with other providers.

You must properly calculate the direct cost-saving value you stand to gain. However, when calculating cost, look out for more than just the money saved in the logistics process. 

You should consider the efforts and the toll it will have on the company. For instance, the infrastructure needed to do this yourself is capital intensive, and if you take a loan from the bank, you will have to pay interest, which also plays a significant role.

 

 

FAQs on Partnering with Logistics Providers in Africa 

Q1: How can I evaluate an African logistics provider’s dependability?

Check their track record for on-time deliveries and service quality, ask for references and client testimonials, and see if they have been certified or accredited by trade associations.

Q2: How many types of transportation services are offered in Africa?

African logistics operators frequently provide road, rail, air, and sea freight services. Depending on the area and infrastructure, these services might not be readily available in all places.

Q3: How can I send goods into Africa while ensuring that all laws and regulations are followed?

Select a logistics company with knowledge of African customs processes and paperwork. They should ensure compliance on your part and have a good understanding of import and export laws.

Q4: What part does technology play in African logistics?

Technology makes tracking shipments, increasing supply chain visibility, and effectively managing logistics operations possible. Inquire about the technical infrastructure and capabilities of possible providers.

 

 

Conclusion

Partnering with logistics providers will often benefit your supply chain. Over 75% of businesses on the continent, including e-commerce platforms, outsource their logistics.

However, when partnering with a logistics provider, your business needs a good checklist that protects its interests and ensures its supply chain is uninterrupted.

In a business world where your customers are very critical or demanding, getting your supply chain right is not just a necessity, it is survival and a competitive edge.