5 interesting facts about Africa's logistics industry

The logistics industry in Africa is undergoing significant transformation, driven by technological innovation and strategic investments.

Logistics is the backbone of trade, facilitating the movement of goods and services that power businesses and industries. However, Africa’s logistics landscape has long been marked by challenges such as high operational costs, inadequate infrastructure, and inefficiencies in cargo handling.

These barriers have stifled growth and increased costs for businesses across the continent. In recent years, innovative solutions have emerged to address these hurdles, paving the way for a more dynamic and efficient supply chain ecosystem.

As Charles Thuo, founder of Apexloads, notes, “Africa’s logistics potential is immense, but unlocking it requires embracing digital tools and rethinking traditional approaches.” His platform exemplifies how technology is bridging gaps in the industry, connecting cargo owners and transporters with unprecedented ease and transparency.

1. Digital platforms are revolutionising freight matching

Innovative digital platforms are streamlining logistics operations across Africa. Apexloads, a Kenyan-based tech-logistics startup, exemplifies this trend by connecting cargo owners with transporters through an online load board.

This approach reduces inefficiencies and enhances transparency in the freight-truck matching process.

Charles emphasises the platform's role in addressing the underdeveloped logistics sector in Africa, aiming to make the process more efficient and cost-effective.

What we are doing at Apexloads is building an ecosystem that empowers logistics providers in Africa to find each other, create a trust between them so that they can work seamlessly together and also give them some financial solutions so that they can stay liquid. Third party logistics providers or 3PLs include freight brokers, freight forwarders and transporters.

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2. Logistics costs constitute a significant portion of business expenses

In many African countries, logistics expenses account for a substantial share of total business costs.

For instance, in Rwanda, logistics can represent up to 40% of a company's total expenses, underscoring the critical need for efficient supply chain personnel and solutions to enhance profitability and competitiveness.

Part of what we are doing at Apexloads is also making this knowledge accessible. We are creating this platform where young people can get excited about logistics. We are trying to partner with colleges like Strathmore, Kenyatta, Makerere and NIT (National Institute of Transport) in Tanzania where we can also teach these young people the best practices in our industry while they are still in school. That way, when they go into the industry they take those best practices with them and they don't have to work for someone, they can be self-employed and we give them the tools to do that.

The future is African, you can see that companies like Microsoft and Google are setting up in Kenya. Global economies are starting to see that and Africans can get ahead of it by learning the necessary skills and operating that future. For example, you can see that a lot of e-commerce platforms are springing up in Africa, all those are going to need logistics planning and that's where Apexloads becomes a solution.

3. Infrastructure challenges necessitate road transport dominance

Due to limited rail networks and infrastructure challenges, road transport remains the predominant mode of cargo movement across Africa. This reliance underscores the importance of developing and maintaining road networks to facilitate trade and economic growth.

4. Expansion of dry ports enhances inland connectivity

To improve cargo handling and reduce congestion at seaports, several African nations have developed dry ports.

These inland intermodal terminals facilitate efficient cargo distribution to landlocked regions, bolstering trade and economic integration across the continent.

5. Investments in logistics infrastructure drive economic growth

Significant investments are being channeled into Africa's logistics infrastructure to support economic development.

For example, the African Development Bank approved a $1 billion loan to South Africa's Transnet to enhance its freight rail and port operations, aiming to improve efficiency and boost trade.

Africa is organising for the African Continental Free Trade Area policy where we are going to see, for example, a freight trader in Nigeria working with a transporter in Kenya. Apexloads can make that happen now.

With a strong belief that the future of tech is Africa, Thuo is optimistic that if entrepreneurs in the continent would realise the potential within the continent then they are likely to transform the landscape in logistics.

A lot of people by now know about OpenAI but not a lot of people know Kenyans trained it. Looking at a platform like ours, Apexloads, it's built in Africa. I just want to challenge young people, they don't have to sell their tech innovations abroad, we have enough problems and we don't have to wait for someone from San Francisco to come and fix it for us.

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These developments reflect a dynamic shift in Africa's logistics landscape, with technology and infrastructure investments playing pivotal roles in shaping the future of supply chain management across the continent.