Kobo360, IFC-Backed Uber of Trucks Reshapes Nigeria’s Haulage Market
An Uber-like App for trucks is making it easier and cheaper for firms to move goods in Africa’s most populous nation.
Freight logistics startup, Kobo360 is using technology to connect cargo and truck owners with drivers and customers. Logistic managers can now schedule and monitor trips from the comfort of their offices, Kobo360 CEO Obi Ozor said in Lagos interview.
The ports in the Apapa district of Lagos account for 70% of all imports into the country and is famed for its traffic gridlock caused by long lines of empty trucks waiting to enter or leave the ports. The collapse of rail infrastructure in Nigeria means that more than 90% of cargo has to be transported by road.
“Before, they had to go to Apapa and look for trucks parked on the roadside,” Ozor said. “Now if you place an order for trucks, you can be matched within 24 to 48 hours.”
The country loses an estimated $19 billion annually from traffic jams, illegal charges and insecurity at its ports according to the Lagos Chamber of Commerce and Industry.
Nigeria ranks 182 out of 189 countries, below South Sudan and Iraq in the World Bank’s Trading Across Borders survey, which measures the time and expense involved with importing and exporting goods.
The two-year-old firm which has TLcom Capital, Y Combinator and the International Financial Corporation as investors – raised $20 million in August in a funding round led by Goldman Sachs and an additional $10 million in local-currency working capital from Nigerian banks.
Kobo360 has moved $2.1 billion worth of goods since 2017 and has a network of 10,800 truck drivers, larger than any fleet in the country, according to Ozor. It charges an average of 385,000 naira ($1,063) for a trip. Transporters who use the platform typically have one to five trucks.
“The market in Nigeria is highly inefficient and the customer is willing to pay for faster delivery, which we offer,” he said. The company takes 15% commission on each trip processed through the Kobo360 app.
Drivers on its platform do an average of 40% more trips in a month compared to other truck drivers. Haulage is 27% cheaper than existing transporters, and have 92% on-time delivery, said the CEO.
“We achieve transparency for cargo owners through the tracker that we put on the trucks on our app. We are able to guide drivers on best routes based on feedback from them.”
Kobo360 has made pricing more transparent for both truck owners and businesses through the two-way quote system on their platform.
Taking out the opacity around pricing will help firms have some certainty around their logistic costs and boost investments in the sector, said Ozor.
– Bloomberg
