It was late on Saturday evening, and I was preparing to embark on a journey from Ibadan to Abuja as early as possible on Sunday morning. Rather than having a fun Friday night, I was on the phone, trying in vain to get in touch with the driver who was meant to deliver my hair two days earlier. For the next two weeks, Feyisayo, the hair vendor, kept trying to track the location of the hair, going back and forth between the NURTW and the driver. Eventually, she was informed that “the driver was robbed and the package could no longer be found,” which was apparently a lie, and they stopped taking her calls afterward. She therefore had to find a way to replace the missing hair.
Unless you are Jumia or Konga with enough financial capacity to build your own logistics arm, many small business owners deal with varying degrees of disappointment after employing delivery companies to convey products to customers.
The Logistics Industry
The rise in e-commerce ushered in a gradual shift in courier and delivery services in the 21st century. Logistics and delivery services became much sought after; even businesses in other sectors started branching out into delivery services.
Operating in both B2C and B2B models, the market is quite large, especially with recent evidence showing an increase in online transactions and demand for home deliveries. Every day, millions of dollars worth of goods and services crisscross the length and breadth of this country, at an alarmingly high cost. A situation exacerbated by needless inefficiency, inordinate regulation, and deficient infrastructure. According to the 2018 Logistics and Supply Chain Industry Report, the economic value lost by this inefficiency was worth well over N250 billion. That’s about 3% of the 2018 budget.
Challenges
After mechanics and tailors, dispatch riders come a close third on the “Amaka Disappoint Chart.” Stories abound of people who have had their deliveries delayed for days and even weeks. There are also stories of parcels destroyed or lost before reaching the recipient. For these small businesses, the problem remains finding a delivery service that can guarantee and deliver just as promised.
For Opemipo, who runs Teni Organics, a skincare product line, getting a good delivery company is quite difficult, and sometimes small business owners end up settling for alternate options, like using friends and siblings to make their deliveries. As a producer of skincare products, Opemipo’s deliveries are often booked days ahead, and she has to get the entire schedule sorted out.
To deal with late deliveries, some business owners book an earlier date than agreed, so that all the delays can be factored in. While this option is possible for people in the business of non-perishables like beauty products and fashion items, it is not feasible for those in the business of consumables.
The general opinion is that the cheaper the service, the more certain you are that it will disappoint. So, it is often advisable to ignore the cost and go for more reliable options. While there are delivery businesses that only require one to call and book the time and date for pickup and the location for delivery, others may require you to pay a registration fee ranging from N5,000 to N25,000, depending on the size of the business, if you intend to use their services more regularly. This delivery option has been reported by most business owners to be more reliable. This option may not be available for interstate delivery.
The option explored by some business owners for interstate delivery is usually between the fairly reliable but more expensive GIG Logistics and DHL, or the inefficient NIPOS,T from whom a business owner reportedly lost her goods worth more than N690,000 and is yet to get compensated. Unfortunately, most business owners resort to using public motor/truck parks, a cheaper alternative that is riskier. Incidents of lost goods, unreliable delivery timelines, and arbitrarily set prices are the status quo.
Is there a Solution?
The question now, as @FoodTemplars tweeted, is, “…but what do we do when dispatch companies or their riders decide to show us pepper?” This raises the issue of insurance (You can check our article on Business Insurance here). Why go for a delivery service that does not offer any insurance for your parcel?
Most business owners opt for dispatch riders because they are cheaper and less cumbersome. Some who have tried using registered logistic companies with insurance coverage could not sustain it because clients are already unwilling to pay extra delivery charges, so they have to look for the cheapest alternative. I can relate to this — imagine paying N3,000 in delivery fees for a product worth N1,000! This often results in the loss of customers who would just rather buy from somewhere nearby.
According to Samuel Ajiboyede, CEO and Founder of Zido Logistics, Africa, an expert in the logistics business, a holistic logistics solution for SMEs, rather than randomly calling a dispatch rider whenever they need a delivery, will be more sustainable. He suggested that business owners should collaborate with a logistics company that can take their parcels, along with other parcels going to the same location, and move them all at once. Depending on the arrangement, the logistics company could assure same-day delivery for all parcels registered before 9 am, with the rest delivered the following day. With this approach, the business owner could spend much less on the unit cost of delivery.
In addition, he encouraged business owners to work with those logistics brands that provide cover and insurance for their goods, even if their services may be more expensive. For example, Fidelity insurance protects businesses from losses that could result from events like the driver/rider running away with their goods or losing their goods, while Goods in Transit insurance prevents losses arising from goods being damaged, tampered with, or destroyed. This explains why their costs could be slightly higher and their processes cumbersome, but it reduces worries at the end of the day.
Conclusively, the burden is on the small business owner to pick the solution that works, keeping in mind that even when the cheapest option does not offer client satisfaction, the most expensive may not offer that either, since customers are always trying to spend as little as possible.
