TOP CHALLENGES LOGISTICS COMPANIES FACE IN NIGERIA AND HOW TO NAVIGATE THEM
Tim has always been one to think of solutions to problems, and his friends best describe him as a proactive individual. So, it was not surprising when he decided to start his logistics company.
Looking around him, Tim realized that most of his friends owned businesses. However, they could not make deliveries. He often gets complaints from them about how they were disappointed by a logistics company or had difficulty getting people to deliver their products to their consumers.
All these were motivating factors for Tim to start his logistics company, and he was hopeful that things would go smoothly. However, that was only wishful thinking. Typically, it is common knowledge that things do not usually go as planned.
Unfortunately, Tim encountered some hitches, especially as he ran his company in Nigeria. Thankfully, he is not one to give up easily. Therefore, he managed these situations with suitable solutions that ensured that he didn’t shut down his company.
As you read further, you will learn some of the challenges that Tim faced and how he was able to overcome them. Tim feels that many people often underestimate the stress of running a logistics company. Thus, making them start the business and close up along the way.
But Tim believes that business will run smoother for people when they have adequate information.
Challenges and Solutions
Some of the challenges faced by anyone running a logistics company in Nigeria include:
Lack of trustworthy drivers
Unfortunately, we see that many humans badly behave. Therefore, there are many untrustworthy drivers, making it hard to operate a logistics company.
Of course, no man is an island, and you do not expect to run your logistics company alone. A team of drivers would help ensure that the deliveries are possible. But what happens when these drivers become dubious? We sometimes see that these drivers even make away with bikes and vehicles of the company.
The increasing rate of such atrocities has become alarming, and it has led to the shutting down of many logistic companies. In addition, it discourages the owners of these companies as they believe that such an accident would only keep repeating itself and there is no need of continuing running the company.
Tim also had his fair encounter with some untrustworthy drivers, but he had to be proactive and implement some measures.
- Solution: When Tim noted a high rate of untrustworthy drivers, he ensured to put checks like getting their credentials and personal information. Of course, some people may want to forge these documents. However, he ensured to cross-check them before employing anyone. He also ensured that they provided guarantors who would be held responsible if anything happened, and he physically went to confirm these guarantors before choosing any applicant.
Anyone staying in Nigeria would agree that there is a high insecurity rate, and it also affects logistics companies. People have to be careful about where they make deliveries as you cannot be sure of certain areas.
As a business owner, you are responsible for ensuring that your employees are always safe. Therefore, it would be wrong to endanger your drivers or any other employee because you want to make money.
Unsurprisingly, some logistic companies report strange deaths of their employees and drivers during deliveries, and it has become a cause of concern. It may even lead to the closure of such a company as no one wants to be blamed for the death of anyone.
But you can put some strategies in place to ensure that these employees and drivers are safe to a large extent.
- Solution: Tim was always big about safety and ensured that there was strict timing on the operating hours of his drivers. He put rules in place to ensure that they do not work at night or they will face dire consequences. In addition, Tim also advocated and advised them never to go into the compounds or houses of anyone for deliveries. He always told them to make deliveries in open areas for their safety.
Fuel scarcity is another challenge that many logistics companies face, and it has also become a cause for concern. After all, if there is no fuel, these logistics companies cannot operate as all bikes and cars need fuel to operate.
When there is fuel scarcity, you would see that the logistics company begins to delay the delivery of goods to customers, and it becomes an issue. Humans are typically impatient, and they will not want to hear any excuses on why their delivery was delayed.
When there is a delay in delivery, these customers take it that the logistics company is not trustworthy, and they begin to leave negative reviews. This issue has given many logistic company owners sleepless nights as they ponder what would be the solution.
- Solution: Such a case is always dicey as there is no specific solution for nationwide fuel scarcity. However, we would advise that you act like Tim and be friendly with petrol stations. Good relations with many petrol stations will ensure that they alert you once they have fuel and will always make you one of their top priorities. We can assure you that such a partnership will be mutually beneficial as the petrol station gets your money, and you will get fuel in return.
Everyone would agree that it becomes hard to survive life when there is a decline in the country’s economic situation. But, of course, such a decline would affect everyone, and logistics company owners are no exception.
Typically, one would always need to maintain their bikes and cars to ensure that they operate smoothly. But once there is an economic crisis, it won’t be easy to continue such maintenance procedures. Moreover, once the prices of things go higher, people begin to seek cheaper alternatives, and it may adversely affect the vehicles.
At this point, these owners begin to think of selling their vehicles to get a small profit, ensuring that they do not run at a complete loss. But is that a feasible solution? First, no company will be left when you sell off everything, and you won’t have any business.
- Solution: It would be best to have good relations with suppliers, ensuring that they continue to give you the best products. In addition, it would be best to stick to some of these vehicles and stop using others until the economy bounces back. For example, if you have 4 bikes and 2 cars. You can stick to using 2 bikes and 1 car to maximize usage and get the best materials for them fully.
Every business comes with various risks, and it becomes a challenge when there are no efficient hands to identify these risks. Typically, every business is supposed to have a risk manager. This risk manager identifies potential risks to the business and brings up solutions on how to curb such risks on time to ensure that it doesn’t interfere with the running of the business.
But when there is no risk manager in a logistic company, you know these risks would not be identified early. Therefore, exposing the business to threats that may lead to the shutting down of the business.
Some people may say it isn’t easy for every logistics company to get a risk manager due to the financial implication. Yes, we agree with such a claim. However, we also advocate that every business owner should have risk management risk.
- Solution: When Tim noticed that he could not afford the services of a risk manager, he decided to take online courses to equip himself with the needed skills. He no longer needs a risk manager as he doubles in that position and his business is well-protected. One can take risk management courses on various online learning platforms.
Competitive market space
One thing about most humans is that they are attracted to success. Therefore, once people see and notice that a particular business line is booming, they would also want to venture into that business. So, we can say that the logistics market space s heavily saturated as many people are now into the business.
And, everyone would agree that it becomes a jungle to survive in such a market space. Every business owner in this space is looking for the best strategies as they need to outdo their competitors. After all, if you do not act fast and right, your competitors would take all your customers, and you would have no one patronizing you, which would have you out of business in no time.
It is always best to keep in mind that it is a game of survival of the fittest to survive in the logistic business market space, and you must be proactive if you want to excel.
- Solution: The best way to succeed above your competitors is to keep in mind that the world is a continuous learning space. Therefore, you need to be on the lookout for new strategies and you have an open mindset. The knowledge you gain daily is what you will use to surpass your competitors.
The laws of the land and region are also restrictive when it comes to running a logistics company. We often see that most business owners in this industry do not understand the region’s laws concerning running a logistics business, which gets them into trouble with the authorities.
It could be that there are certain levies to pay before getting certification, or there is a test to undergo. If the business owner is not aware of all of this, you are sure that they will default, and it will put them on the wrong side of the authorities.
We have seen cases where business owners of logistics companies are charged, and they have to pay huge fines because they were unclear and unsure about certain laws.
- Solution: Tim believes in human resources and understands that everyone has various strengths and weaknesses. Of course, the law was not his stronghold. So, he sought the help of his lawyer friends. He ensured that they interpreted everything to him in the simplest form to ensure that he understood and abided by these laws. Once he understood everything, he never got into trouble with the authorities, and his business ran smoothly.
Frequently Asked Questions
Below are some of the frequently asked questions about running a logistics business in Nigeria:
How can I start a logistics business in Nigeria?
You can start a logistics business in Nigeria once you have a clear aim, goal and focus on what you want to achieve. Therefore, the reason why you are starting this company shouldn’t be because others are doing it. Rather, it should be that you want to solve a need and have a clear plan to achieve your goal.
What are the solutions to the challenges facing logistics companies?
The solutions to the challenges facing logistics companies come in many ways. We have talked about some of them above, and we advise that you incorporate them when running a logistics business. It helps ensure that you do not run at a loss.
As people who are passionate about business owners and their businesses, we always want to bring solutions to challenges that business owners face.
The idea is to ensure that business owners experience ease in their various transactions.
If you own a logistics company, ensure that you follow our highlighted solutions to minimize the losses your company will incur.