By Brian Yatich
Despite a growing demand for transport services, Kenya’s road freight still faces a myriad of challenges leading to poor truck turn-around times that hinder the on-time delivery of goods to many consumers.
As the African continent accelerates the implementation of digitalisation, industries such as mining, manufacturing, and logistics are making huge strides to progress the continent.
Saloodo! a subsidiary of DHL has also contributed to this progression of digitization by launching a digital road freight platform called Saloodo!.
The platform provides shippers with the opportunity to seamlessly connect with carriers for domestic and international trucking needs while allowing carriers to efficiently identify loads and increase the utilisation levels of their fleet to generate extra income.
Tobias Maier CEO of Saloodo! shares insights into the firm’s plan in improving customers’ experience in the Kenya and Africa freight sector.
What sets Saloodo! apart from other digitized freight platforms in terms of value, security and efficiency?
Saloodo! offers a transparent and efficient digital platform that gives shippers access to a pool of reliable carriers in Kenya to cater to their on-demand shipments. Furthermore, the platform will enable carriers to better manage their fleets and optimise the capacity of their Full Truck Load (FTL) shipments.
Our competitive edge lies in the unique combination of a smart, swift, and reliable digital offering with our extensive logistics expertise, transparency, and broad footprint under the DHL brand.
Saloodo! provides visibility and security that has been lacking in traditionally-run operations, especially in Africa. We vet all carriers strictly to ensure our customers’ cargo is safe and secure. Carriers also have to be covered by the required environmental and comprehensive insurances. The bidding function on Saloodo! ensures the most economical pricing; and we have just launched a new feature allowing our carriers to submit their offers directly on WhatsApp. Saloodo! connects users on an end-to-end platform that empowers them to handle transport bookings without any additional administration costs.
How would you describe the transport and logistics industry in Africa? More specifically the road freight operations. What is the market value for road freight volumes in Kenya?
Africa has always been a key market for DHL – evident from our longstanding presence in the market. Specific to plans for our digital road freight platform, Saloodo!, we aim to connect extensively with local shippers and carriers, because we are convinced that digitalization helps to facilitate trade not just within the country, but will equally drive activities in the greater continental region. To this end, it is imperative that we actively push to accelerate digitalization to propel business growth for our customers.
In parallel with expanding this solution across many African markets, we ultimately plan to connect the dots and create a strong road freight network across the entire African continent. One of our aspirations is to one day, establish regular road freight connections between Tanger, Durban and Cairo.
How is demand in the freight logistics space like in Kenya? What has driven this demand? Where do you see the maximum demand coming from, in terms of industries and countries?
Several factors are in play to maintain a stable demand for freight and related services. First of all, the Kenyan government’s efforts to attract more foreign investment is paying off, especially with lowered levies as well as increased integration of the regional bloc which is expected to boost intra-African trade by 52.3% by 2022. Another factor is the continued importance of the Mombasa Port (Africa’s fifth-busiest port) as the main trade gateway for the Eastern Africa region connecting Kenya with seven neighbours (such as Uganda, Somalia, Rwanda and South Sudan) and road freight is a key component of last-mile deliveries. While the pandemic continues to take hold of global economies, we are seeing a slow rebound of Kenya’s perishables and horticulture produce to the region and globally.
Against the backdrop of these positive prospects, Saloodo! is an industry agnostic solution that has allowed us to offer our customers truly a one-stop-digital-shop for all their trucking needs. We have continuously worked towards realising our vision of a world in which logistics is smart and digitalised, and this has inspired us to bring our innovative solution to life. With Saloodo!, we have been able to increase our network of shippers and carriers, and provide a solution that emphasises customer experience. We work closely with our stakeholders and partners to outline plans that will ensure minimum disruption to the business and maximum demand.
How effective have technology platforms like Saloodo! been to the industry? Kindly explain some of the economic and social impacts that Saloodo! will contribute?
The trucking industry still offers significant room for improvement. According to the World Economic Forum, up to 50% of all trucks on the roads travel empty on return journeys and utilization levels of the trucks loaded typically range from 50%-70%. In a best-case scenario, however, the industry is probably utilizing 50% of available capacity at the moment.
Our goal at Saloodo! is to push this utilization level across the industry up by making better use of available assets and resources. This will mean more income for truck drivers, less traffic, less carbon emissions – a triple win for shippers, carriers and the entire society.
As the world’s youngest continent with 60 per cent of the population below the age of 25, Africa’s economic decisions and growth paths are increasingly driven by a dynamic generation of digitally-minded young adults. These are ideal conditions for offering and further developing our smart solution in the business context. Kenya is an important driver of the logistics and technology sectors in the greater continental region as we have seen with the upgrade of railway, seaports, airports, and the development of geothermal power stations.
What is the state of the logistics and transport industry in Kenya and how is it different compared to other countries in the region?
Kenya has seen its fair share of road freight-related challenges like many countries in Africa. These include poor truck turn-around times attributed to poor cargo off-take and delivery infrastructure, cargo pick up delays after it is released at the port, and high frequency of stops taken along the Northern Corridor. These challenges are similar to many countries in the region.
However, Africa as a whole has proven itself ahead of the curve in many respects, with countless opportunities lying just beneath the surface. For logistics operators, Africa is the land of opportunity. It covers 20% of the world’s land area, has 1.3 billion people, a huge market potential and a dire need for an efficient logistics ecosystem.
Yes, the continent’s infrastructure is not as well established as more developed parts of the world. Nonetheless, we have seen investments in Africa that have made a difference to the infrastructure, we are confident of the growth prospects and remain committed to investing ahead of the curve.
What is the current number of active users on your platform in the East African region your platform has been able to capture? Shippers, trucks & Carriers.
The service has grown to encompass more than 30,000 shippers and over 12,000 carriers covering more than 50 countries since 2017. During this time, the trucks managed by Saloodo have travelled a total distance of more than 25 million kilometers, which is equivalent to over 630 trips around the earth and 35 voyages to the moon and back.
In the light of the Corona Pandemic, how has it affected your operations globally, what measures is Saloodo! deploying to meet its targets?
Like almost every other industry around the world, border restrictions have impacted the logistics industry significantly. To mitigate any fallout however, the industry has stepped up its efforts to respond to the pandemic efficiently by looking at various alternative solutions and offerings. Ever more so than before, businesses have to focus on maintaining trade, especially to ensure that essential goods and services can continue to reach their end destinations such as the transportation of Personal Protective Equipment (PPE) as well as fresh produce. It is against this backdrop that we ensure the platform remains freely available to them 24/7 so both transport providers and shippers can gain access to the marketplace to meet their freight needs.
Times of crisis have historically also been opportunities for change. Are you optimistic that as we emerge from this, it could be a chance to create a better economy?
Winston Churchill’s famous quote “Never let a good crisis go to waste” is currently as relevant as ever. Clearly taken out of context since we are not at war in the traditional sense! But firstly, it was great to see that despite all the challenges we have been experiencing across the world, the supply chains kept going at all times. While we could not assess the full economic impact of the pandemic, the silver lining is evident in the pace of innovation and digital transformation as companies evolve and adapt to remain relevant. It is almost inevitable that this transformation is accelerating in the logistics sector where we are seeing a huge push. This is especially so at Deutsche Post DHL Group which Saloodo! is a part of, as we have embarked on our digitalization for several years now and made it the core element of our Strategy 2025 – “Delivering Excellence in a digital world”. Now, many people realize that a lot can be organized online in a smooth way whilst not taking any risk to get infected. Other trends we have seen during the crisis, for example an increase in working from home will change our working lives beyond the current pandemic.
Aside from the pandemic, were there other uncertainties that Saloodo! has encountered prior to establishing operations in the African region? How did you sail through from such challenges?
Connectivity and data costs are one of the biggest challenges that users may experience but we see that the situation is gradually improving as digital tools are embedded into every aspect of our lives, from homes to industrial systems.
Where do you envision Saloodo! in the next few years? What are your plans for the Kenyan market?
Under the DPDHL Group’s Strategy 2025 that focuses on our core offerings and delivering excellence in the digital world, we have committed to invest €2 billion into digitalisation projects over the next five years. Digital transformation is a top priority for the industry and this push for digitalisation is in line with the Group’s purpose to connect people and improve their lives by enabling trade and helping businesses to grow.
The platform has provided reliability and efficiency to businesses and it will help open up the African market including Kenya for organisations to capitalise on local opportunities. We are continuously thinking about optimisation features that will simplify the job of shippers and are constantly in dialogue with our carriers to find out what we can do to make the platform more compelling from them and all parties involved. We want to establish Saloodo! as the brand for digital trucking across Africa with Kenya being a key market and pillar in our footprint.