• Friday, June 21, 2024
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Logistics firms mine gold from data to optimise cost

Logistics firms mine gold from data to optimise cost

Despite the soaring cost of doing business, logistics businesses are leveraging data to grow sales.

“Data has been very instrumental in navigating the troubled waters. It has helped us to better optimise pricing, earnings, and even visibility; so our drivers earn better,” said Joseph Omosebi, fleet operations manager, Bolt Nigeria.

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Omosebi spoke at BusinessDay’s Technological Disruption in Logistics Conference on Tuesday in a panel session titled ‘The role of technology in the logistics business’.

The logistics sector has had to navigate several economic challenges. The announcement of the petrol subsidy removal by the president led to a significant surge in fuel prices across the country, with an average increase of 174.6 percent.

The rise in fuel prices resulted in higher transportation costs for both private and public individuals. Ride-hailing services were not left out as most of their drivers demanded a 200 percent increase in fare price.

“Data helped us understand that it is better to have various classes of offerings to different riders hence why we launch the economy category which helps our riders that cannot afford the price increase, to now afford our services,” Omosebi said.

He mentioned that data-driven insights have enabled the company to optimise pricing. According to him, recognising the impact of fuel costs on profitability, Bolt introduced vehicles running on Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) in Abuja, offering drivers significant savings of up to N60,000-N70,000 weekly

Ope Onaboye, co-founder of Renda Africa, a firm that handles storage, inventory, and track delivery for e-commerce businesses, said that it has been able to offer more value to its customers through data.

Onaboye said for their customers, using data to identify new market trends, customer preferences, and product development strategies is important to enable them to make better decisions.

“Has a logistics company trading for over two years to over 50,000 customers historical data allows us to help our customers with insights on areas with high demands of their goods, and customers with the most demand for their goods all this information helps small business optimisation, so they can focus on key areas to channel their product too,” he said.

A research BARC BI-survey, one of Europe’s leading analyst firms for business software, focusing on the areas of data, business intelligence showed that 58 percent of organisations base at least half of their regular business decisions on gut feel rather than on data and information. ‘Laggard’ companies base 70 percent of their decisions on gut feel, while ‘best-in-class’ companies base 60 percent of their decisions on relevant information.

It said this illustrated a clear link between using data and information for decision-making and being able to achieve a strategic advantage over the competition.

The experts at the event agreed that to improve Nigeria’s logistics sector and match its Western counterparts, technology must be adopted more widely. They also emphasised the need for a stronger regulatory framework, consistent policies, and better infrastructure to boost the sector’s growth.

Mbanefo Obiora, CEO of Yoris Africa Ltd, spoke on the importance of technology adoption in the Nigerian logistics sector, noting that only 10 percent of Nigerian SMEs currently use technology.

Obiora said that despite being touted as one of Africa’s technological leaders, the industry struggles with hurdles such as concentrated smartphone adoption in urban areas, and hindering logistics uptake due to payment issues.

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On conservation regarding streamlining regulations to enhance the logistics industry’s viability, Olusola Obabori, executive director, Nigerian Aviation Handling Company (NAHCO), said that the logistics was often hindered by an excessive regulatory framework that impedes its growth and efficiency.

He said that in particular, the courier service segment faced a complex licensing and taxing structure involving multiple layers, including “thugs,” which add unnecessary bureaucracy and administrative burdens to businesses. This fragmented regulatory landscape stifles innovation and hinders the sector’s ability to adapt to evolving market demands.

Morolayo Igeleke, of the United Parcel Service (UPS) Nigeria, said there was an urgent need for a robust and comprehensive registration system for logistics businesses, “the current system fails to comprehensively identify and address unregistered or non-compliant businesses.”

“This lack of proactive enforcement allows unlicensed operators to operate in the shadows, potentially compromising the quality of services,” Igeleke said.