Crowdsourced Logistics in Africa: A review

Crowdsourced logistics in Africa and the rest of the world was borne out of the need for cheaper and faster last-mile delivery options. In this article, we carefully examine the nature of this new delivery option in Africa.

Harnessing the power of collaboration and community, crowdsourced logistics in Africa paves the way for innovation and inclusive progress.

 

Introduction

With the rise of e-commerce, there has been a corresponding rise in the demand for speedy delivery of goods and services. In many cases, these deliveries are expected on the same day or within the hour. 

With these demands came a solution – crowdsourced logistics, sometimes called crowdsourced last-mile delivery.

Today many supply chains, delivery, and e-commerce businesses in Africa are investing in crowdsourced logistics. Over 30% of e-commerce businesses in Africa favour this delivery option. It also comes in handy, as customers are less inclined to pay for their deliveries.

 

What is CrowdSourced Logistics?

Crowdsourced logistics is a form of last-mile delivery whereby the company or business leverages a network of contracted and local couriers to get any package or order to the customer’s doorstep.

You may liken the model behind crowdsourced logistics to that of transportation applications such as Bolt or Uber. In fact, these two applications use the same model to deliver food to users and customers across Africa.

Uber has recorded over a billion rides in Africa, showcasing the model’s success.

Crowdsourced logistics in Africa is mostly used by major e-commerce businesses, and a lot of them are prevalent in the food industry.

 

Elements of Crowdsourced Logistics in Africa

A few things have to be in place before crowdsourced logistics is successful.

1. Platform: This is the application that facilitates orders and helps all stakeholders involved in the process track the order delivery progression.

2. Stakeholders: These are the parties involved in the process, such as customers, logistics businesses, and the drivers or delivery contractors.

3. Order cycle time: The time it takes from the point of order to the customer’s doorstep. Keeping the order cycle time as short as possible is a big reason behind the crowdsourced logistics model.

4. Product ordered: This is the final piece of the puzzle. Without it, there is no delivery process. It is the product ordered which is ideally delivered to the customer.

 

Why is Crowdsourced Logistics in Africa Important?

There are substantial benefits to this model of delivery for businesses and customers.

 

1. Fewer Assets

Businesses operating this delivery model have no need for warehousing, fleets, and other infrastructures a traditional logistics company would ordinarily require. This model requires a robust application to run successfully, but that does cost so much to maintain, thereby driving down costs for a lot of these businesses.

 

2. Cheaper and Faster

Last-mile delivery is the most important aspect of the supply chain process and the most expensive. With this last-mile delivery model, businesses run more efficiently, ensuring customers pay less for logistics.

Customers get their items faster because the locals or contracted drivers are motivated to complete the process and move on to other orders because they will earn more.

 

3. Less Workload, More Focus

Logistics and transportation is a complex operation requiring much effort and resources to get the job done. However, with this model, those efforts are shared with the contracted drivers, allowing the business to focus on what it is good at.

 

4. Scalability

Crowdsourced logistics is easily scalable and can give the business access to a large pool of drivers. It also costs minimal capital to scale the business.

 

Challenges of Crowdsourced Logistics in Africa

As much as crowdsourced logistics has significant value on the continent, it also comes with its fair share of issues.

 

1. Loss of Control

With this last-mile delivery model, businesses relinquish control to drivers and locals. Now they can do a lot to motivate and keep them in line. However, what can a business do when its drivers do not report for duty for one reason or another?

 

2. Retention Rates

The retention rate for the business is very low. This is because no contracts bind these locals or contracted drivers to any particular business, so they tend to move from one application to another. In many African cities, businesses in this industry operate with the same pool of drivers.

This can present a problem in the form of downtimes for these businesses, and customers do not like to wait.

 

3. Potential for Brand Damage

Customers are the sole aim of the supply chain or logistics process. This makes a brand’s relationship with them vital. It reflects on the businesses and personnel the brands allow interface with the customers.

However, with crowdsourced logistics, the locals and contracted drivers do not have brand loyalty and, despite efforts, could derail the brand image to customers.

 

4. It can sometimes be more expensive

Crowdsourced logistics make the supply operation cheaper and faster; however, there are situations where it becomes more expensive. For instance, due to the competitive nature of the industry, businesses tend to pay more to keep drivers using their apps. These costs can sometimes spiral out of control, leaving the customer footing the bill.

 

5. Payment Security and Complication

Customers across Africa still need to be convinced about paying online or through these platforms. Some businesses do not integrate payment to the couriers into their system. These are both fine, but it gets complicated for the business to keep track of all payments, especially when the customer is paying cash to these businesses.

 

How Crowdsourced Logistics Works

Crowdsourced logistics in Africa, as with everywhere else, is the last leg of the supply operation. This means it is activated after the product is ready and the customer orders it. There are order-to-make options as well, but those are rare.

The customer would typically order from an existing platform showcasing all the available products. They could also make orders by telephone.

Once an order is placed, the platform highlights any available driver to go to the warehouse, distribution centre, restaurant, or facility where the items are stored and preserved.

Ideally, the facility processes the order in the time it takes for the driver to get to the pick-off location. Once there, the driver logs in, alerting the platform and the customer that he is on the way.

The driver then journeys to the customer’s location, leaving the item on the doorstep or delivering it directly.

 

FAQ on Crowdsourced Logistics in Africa

Q1: Is crowdsourced logistics limited to cities, or does it also expand to rural areas?

Crowdsourced logistics have the potential to spread to both urban and rural areas, easing connection issues and improving access to goods and services in underserved areas.

Q2: How can Africans participate in crowdsourced logistics?

Individuals can participate by signing up for crowdsourced logistics platforms, registering their available transportation capacity, and responding to delivery requests based on availability.

Q3: How important is technology in crowdsourced logistics?

Technology facilitates the efficient matching of available transportation capacity with delivery requests, as well as real-time tracking, payment processing, and participant communication.

Q4: Can crowdsourced logistics help solve problems in Africa’s rural areas?

Yes, crowdsourced logistics can help by bridging the gap in delivering goods and services to rural areas where traditional logistics may be constrained. It does this by contracting locals in rural communities to be their agents.

Q5: How does crowdsourced logistics assist African sustainability?

Crowdsourced logistics can contribute to lower emissions and more effective resource usage by utilizing available resources and minimizing the number of unnecessary journeys.

 

Conclusion

As a last-mile delivery model, crowdsourced logistics in Africa has benefited e-commerce businesses across the continent. However, there remains a gap, especially for the smaller e-commerce businesses.

We will see what happens in the future, but e-commerce seems to have a reliable logistics model for its customers across the continent.