There are indications the Government may shift transportation of cargo from Mombasa Port to Nairobi strictly through the Standard Gauge Railways as a way of cushioning the multi-billion shilling railway project.
Even though the policy direction, initially pronounced by the Kenya Revenue Authority and the Kenya Ports Authority, has been shelved, for now, truck drivers and owners are opposed to it and are pushing for further dialogue on how best the policy measure can be implemented.
This industry employs thousands of drivers who, together with truck owners and their families and dependents, are grappling with an uncertain future. In every sector, only those innovative enough will remain afloat.
What then is the role of technology in all this? It’s difficult to talk about innovation without technology because the two go hand in hand. That said, the evolution of technology is pushing the boundaries and changing how the world does business. Today, we’re accustomed to everything being online and right at our fingertips for immediate access.
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Through platforms like SkyGarden, Jumia and other e-commerce platforms, for example, it’s possible to receive a package less than an hour after ordering, depending on where you live.
Improved technology has also increased productivity in the supply chain, minimizing costs and errors, because the primary goal of technological innovation is to make tasks less costly and more efficient.
Even without the SGR, there is a strong case for expanding the benefits of technological innovation to the logistics business. Indeed, and quoting a KPMG 2014 report: “As the next industrial revolution sweeps the world, and the Internet of Things rides the wave, the reality here and now is that, organizations of the future are destined to be digital by default.”
Faced with this reality, app developers and investors in the logistics business are converging to explore ways of addressing some of the existing and emerging challenges that continue to threaten their future. Early this year, Amitruck, a web and mobile-based application that connects vans, pick-ups and trucks to potential customers was unveiled in Kenya.
The benefit of this platform is two-pronged. To the customer, Amitruck provides a safe, simple way for the customers to transport their goods whilst accessing competitive rates and tracking them in real-time. For the truck owners and drivers, they benefit from the application by accessing more business outside of their networks and having full control of their trucks and what jobs they engage in.
In China, a similar app known as Manbang allows companies to connect with truck drivers. Since inception just a couple of years ago, the app has registered impressive success with 5.2 million of China’s 7 million freight trucks registered and using it.
The Kenyan government appreciates the place of digital platforms and recently released the Kenya Digital Economy blueprint, which seeks to create a nation where every citizen, enterprise and organisation has digital access and the capability to participate and thrive in the digital economy.
As rightly captured in the blueprint, digital platforms create new opportunities for companies of all sizes to engage in trade. They can lead to efficiency gains through lower transaction costs and reduced information asymmetries supported by rating systems.
Other benefits include lower consumer prices, increased market access, more competition, better use of underutilised resources and increased flexibility for the providers of services.
For truck drivers and owners, new technologies like the apps above give access to markets that were previously closed and removes distortions in demand by giving customers direct access to products previously controlled.
That said, there are several risks associated with such online trade transactions with three main concerns – trust, payment and fulfillment standing out. Some of the precautions we have put in place to address these concerns include rating and vetting drivers and the vehicles on our platform.
When it comes to payment, we hold payment in escrow as an independent party. This gives the transporter assurance that if the payment has been made, on completing the job, he will receive payment.
If the job is on credit, we disclose this information quite clearly on the application so transporters can see the payment terms which they can cross-reference with the client’s track record to determine if they want to extend the credit or not. Besides, we also act as a neutral go-between helping to work through any challenges that may come up from time to time.
–Mark Mwangi- CEO and Co-Founder, Amitruck.
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