Kobo360, a Nigeria-based tech-enabled logistics startup with a presence in Kenya, has called on East African Community authorities to increase testing capacity for the new coronavirus and speed up the procedure at borders in order to facilitate the movement of goods and services across the region.
The bloc recently issued new guidelines meant to curb the spread of the virus among long-distance truck drivers in the region. They require testing for all drivers while keeping all border crossings open for freight traffic so that trucks can be cleared as quickly as possible.
While the move helps to reduce mistrust among truck drivers and border officials, an issue already causing new frictions between neighbors, the new procedures come with their own costs. The mandatory testing at Kenya-Uganda borders, for instance, has led to reduced clearance for drivers and slower movement of cargo with Kobo360 seeing clearance for its truck drivers carrying essential goods shrink to less than 50 percent.
“Because of the driver testing along the borders, we’ve seen that the time it takes for cargoes to cross from Kenya to Uganda has gone up,” Kobo360 Chief Strategy Officer Kagure Wamunyu told Ventures Africa in an interview. “Usually, it takes four hours on a good day and maximum of a day but now we are seeing delays of 48 to 72 hours because drivers have to be tested and wait for the results to come back before they can proceed. So this is what has created challenges.”
Some of the challenges the firm is facing are underutilization of its pool of truck drivers leading to loss of revenue and increased costs to run trips. Truck drivers have experienced additional fuel expenses, increased mileage per trip, and even truck and cargo security, raising their monthly costs. Lengthy turn around times (TAT) are also leading to financial pressure on drivers, some of which are defaulting on loans.
The “inefficiencies in cargo movement” also mean that it would take longer for the end-user to access products and they may end up paying more for basic items, even though Kobo360 is not passing the extra costs over yet, Wamunyu said.
Despite incurring extra costs and facing other challenges, the precautions are necessary from a health perspective, Wamunyu noted but calls for improvements in the mandatory testing procedure. “The first thing is to definitely increase the capacity of testing. If you are going to be looking at truck drivers, you should have many testing kits and points to reduce the queue. And then the speed at which they release their results should also be increased,” she said. “(The) second thing is embracing technology (in the process). I think it creates an opportunity for minimizing human contact.”
Moreover, Kobo360 has been supporting government efforts against the virus outbreak. It has implemented work-from-home orders in certain jurisdictions to ensure safety, minimized business travel, as well as provided hand sanitizers, masks, and gloves to employees and drivers. “The health of our staff is of the utmost importance to us and also that of all the stakeholders in our ecosystem. And right now, the most important thing is to test and so as Kobo360, we are also encouraging drivers to get tested,” Wamunyu said.
In response to the disruptions caused by the pandemic, the startup is leveraging technology to provide remote access to the supply chain, allowing for business continuity and facilitating a steady stream of trips. Using its Global Logistics Operating System enables operations to continue without the need for physical interaction or pitching for jobs with cargo owners.
Kobo360 is also using digital waybills to keep goods moving amid the crisis, with Wamunyu noting that the logistics industry traditionally has been “quite resistant to digital waybills” with a preference for paper. “But now we’ve shown them that this product that we’ve been pushing comes in handy. Even when your offices are closed, you can be sure that cargo has been delivered.”
The ongoing pandemic has totally disrupted almost all global economies and put entire sectors at standstill. Also due to restrictions of movement, the trucking and logistics sector is also seriously affected and threatens the survival of some players but Wamunyu allayed such fears as regards Kobo360. “There has definitely been a sector impact on logistics, however, I would not describe it as a general decline. Because as much as we’ve seen declining cargo, especially in nonessential goods like cement, there’s also been an uptick in essential products such as medical supplies.”
Experts suggest leveraging advanced technologies can help logistics companies to improve visibility across the end-to-end supply chain and support their ability to resist sudden shocks such as the coronavirus outbreak, an idea Wamunyu echoed. “The advice I would give is to embrace technology. This will support transporters to improve efficiencies and survive this period. Embrace tech in invoicing, waybill, and tracking.”
Speaking on the post-pandemic era, Wamunyu expects a quick rebound in the sector as the general economy recovers from the coronavirus-induced slump. “I think as the economy rebounds, so will logistics. Logistics is usually a good mark of how the economy is doing.”
More so, she expects a “new normal” in the logistics sector after COVID-19, with major changes to how players in the industry operate. “We see more utilization of technology (post-COVID-19), where an industry that’s traditionally shied away from technology now embraces the platform,” Wamunyu said.
“The new normal is digital waybills, something that hasn’t been present in African markets,” she continued, “we have said that you would not have to submit a physical piece of paper as proof that cargo has arrived… that order and discussions can be made without physical meetings… that you can minimize the number of people who are needed at a specific location. This is why there is technology and that is what we anticipate.”