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From bustling cities to remote communities, last-mile delivery is the crucial link that connects businesses to customers in Africa’s rapidly growing economies. This market may seem modest in size, with a value of just over US $1 billion as of 2021. But it has a compound annual growth rate of 8.45% and is projected to reach $2.35 billion in value by 2030. And since it powers major industries like retail, e-commerce and manufacturing, its potential value could be far higher: Based on our internal research at Motions, we believe this market could be worth US $25 billion.

The growth of the last-mile delivery sector reflects its increasing importance to these vital industries on the continent. Though a reliable count of total last-mile deliveries is hard to come by, based on our market research, we estimate that anywhere from 1 million to several million packages are delivered to their final destinations across Africa each day. And the final leg of a package’s journey is often the most challenging, expensive and time-consuming part of the logistics chain.

According to the United Nations Economic Commission for Africa, the informal sector plays a major role in African economies, generating up to 90% of GDP in some countries — and these informal businesses often rely on informal delivery channels to reach their customers. Our market research suggests that most packages are transported by individually owned micro-courier businesses, which mostly lack the sophisticated logistics technology that could streamline their operations. These inefficiencies contribute to the high cost of delivering goods in Africa, where the cost of transport and logistics is three to four times higher than the world average.

The Business Impact of Inefficiencies in Last-Mile Delivery

To understand the impact of these inefficiencies on last-mile delivery in Africa, consider the daunting task faced by the couriers and dispatchers who deliver packages to different destinations across the continent. They must overcome challenges ranging from poor addressing systems and largely manual operations, to the customer trust issues that are prevalent in the market. In a developed country, couriers are typically expected to navigate complex routes that involve multiple stops — often using optimized navigation systems or applications offered by their company or an external provider — then drop off packages directly at the customer’s doorstep, mailbox, P.O. box or other location. However, in Africa, most couriers must navigate even more complex routes without using any navigation application or system, since even free apps like Google Maps often can’t integrate with their company’s dispatch management software, and require access to smart mobile devices with mobile data that is rarely available. This causes delays when they have to stop to ask locals for directions.

Further complicating things, most orders involve home delivery, in which the recipient must be present at the time of delivery or have a third party receive the package on their behalf — a practice aimed at reducing theft and boosting customer trust. This introduces more delays, since the courier must sometimes wait for the customer or designated recipient to arrive due to poor communication. And a good number of these deliveries fail: Based on our market research, first-attempt delivery rates can be as low as 60% for most courier companies. That means four out of every 10 deliveries require multiple attempts, for one reason or another, and some ultimately fail permanently. Retailers must take this failure rate into account when planning their operations: For instance, Jumia, a major African e-commerce company, has a policy of only attempting delivery two times per package before canceling the order, which suggests the extent of the material cost of repeat delivery attempts to their business.

To understand the cost of these delivery challenges from a business perspective, it is important to consider factors such as the size of the market, the frequency of delayed and failed deliveries, and the cost of redeliveries, each of which plays a crucial role in determining the impact of these inefficiencies on a company’s bottom line.

For example, our research suggests that the average cost of a single last-mile delivery attempt in Africa is about $2.70, though it’s typically lower in cities and higher for interstate deliveries. This cost can quickly add up: It’s difficult to reliably determine the average cost of failed deliveries across Africa’s multiple markets, but we estimate (very conservatively) that the cost amounts to at least $2.7 billion per year. These expenses represent a loss not only for delivery companies, but also for the businesses that rely on these services to reach their customers, since either the retailer or the courier business may be required to cover the cost of redelivery and delivery failure, depending on the circumstances. As a result, inefficiencies in last-mile delivery have a significant impact on profitability and are slowly killing the competitiveness of businesses that use these services at scale. Therefore, it is crucial for these companies to reduce these inefficiencies in order to improve their profitability and overall customer experience.

Transforming Last-Mile Delivery Through Automation

Despite the clear need to address these issues, transforming last-mile delivery operations is a herculean task — one which many delivery and logistics companies would rather avoid, so they can focus on meeting other customer needs within the same market, like warehousing, order management and fulfillment. But this transformation is possible if the industry focuses on one key area: automation.

Obtaining new delivery jobs from retailers, assigning these jobs to couriers, routing and tracking delivery attempts, and maintaining communication between couriers and dispatchers are all critical business processes that should be automated. The more automated the process is, the more efficient it becomes — that is a simple truth. At Motions, we have taken up the task of building both the physical and digital last-mile delivery infrastructure needed across Africa to unlock the industry’s growth and help it reach its potential as a $25 billion market. To that end, we’re creating a service that addresses the many issues that are holding the industry back, by providing solutions like delivery operations automation, telematics (i.e., devices attached to the courier to track essential data like GPS location, fuel usage, etc.), dispatch management tools and smart locker infrastructure (i.e., storage for packages awaiting delivery by a courier or pick-up by a customer).

Our all-in-one solution is currently in private beta, receiving active feedback from delivery companies to help us fine-tune the product for its public launch. This solution will help automate last-mile delivery processes, so that courier companies can unlock the full potential of the logistics business. Automating these processes can have a vast impact on these companies, improving dispatcher efficiency by 200% and reducing operating costs by as much as 50% (according to our internal calculations). Let’s put this in simple terms: Imagine a courier’s delivery capacity is 10 packages per day, with most deliveries barely arriving on time. We have found that, with automation, the same courier can deliver up to 30 packages per day — with on-time delivery.

We believe Motions’ solution will become the most exciting innovation available in Africa’s last-mile delivery sector — one that can solve the automation needs of retailers and delivery companies across the continent. The technology enables delivery companies to optimize their routes, collect and assign jobs automatically to couriers, track and communicate delivery progress to both customers and the dispatchers who are tracking the order, and ensure improved delivery efficiency. This has proven to help reduce delivery times and costs, while also improving the overall customer experience.

Motions’ solution is based on a web app that can be accessed by both the couriers and their dispatchers over the internet — primarily via mobile devices. Once the admin account is set up, multiple couriers can be added to the account, and they’ll receive a link to access their own interface of the app. When a delivery job is received from the customer, it can be automatically assigned to the couriers, who receive a list of jobs assigned to them (either by a dispatcher or automatically) on their app, with each job optimized to help them use the shortest route between pick-up and drop-off points, and also to avoid traffic congestion or other delays on the road. The algorithm covering this part of the application is built to handle operations that are either based on on-demand pick-up and drop-off operations, in which the courier delivers the package immediately after picking it up, or batch pick-up or drop-off operations, in which the courier delivers a series of packages during the same trip.

Errors generated due to the manual communication of addresses or poor addressing systems are common in last-mile delivery in Nigeria (the first market where Motions will initially operate), but they will be non-existent using our tools. Couriers will receive the exact addresses provided by the customer, and those can be as precise as pinning a location on the map, as GPS technology enables the courier to follow the directions provided within the app to navigate to their destination.

One of the most promising aspects of last-mile delivery automation is that it gives all sizes of courier companies the ability to automate delivery job collection. Most couriers — whether they’re employed by a single company, or serving multiple companies as “gig economy” workers — collect delivery jobs via WhatsApp, Instagram or other social media platforms, and this process requires them to communicate with customers individually to coordinate drop-off times and share other information. Motions’ all-in-one solution supports these existing job collection channels, offering compatibility with common social media platforms, chatbots, web APIs, CSV file bulk upload and other online tools. With Motions, couriers can set up a simple way to receive job orders through automatic messages, without manually having to interact with any customer. The entire process is fully automated, from the initial delivery job request to completion of the delivery by the courier.

When a courier company’s customers make a delivery order — whether the order comes from a retailer or consumers themselves — the customer also gets to pick their preferred pick-up and/or drop-off window. Allowing the customer to tell the delivery company what time to pick up or drop off their packages will help avoid late or failed deliveries due to customers’ unavailability. To ensure a smooth delivery process and to eliminate the possibility of failed deliveries, couriers can set up messages to be sent automatically to customers at important times during the process — i.e., a day before the delivery, the morning of the delivery and 30 minutes before delivery. These messages will help the customers plan to be available when expecting a delivery, or reschedule if the slated delivery time is inconvenient.

With this level of operational transparency, customers will be able to track their packages in real time, and delivery companies will also get data on the real-time movement of their fleets. Performance indicators like couriers’ idle time, the number of on-time deliveries, route efficiency and more can be monitored for each courier. This will enable delivery companies to reward the best-performing couriers based on real data and insight into their current performance.

We are on a mission to help African businesses in the last-mile delivery space realize the full potential of their logistics operations — and to delight customers with every delivery. By making deliveries 10 times faster, cheaper and more reliable through innovative technology solutions, we aim to revolutionize how goods are moved in Africa.

Samuel Odeloye is the founder and CEO of Motions; Demilade Onajobi is business development manager at RoadPreppers Technologies.

Photo courtesy of Adam Cohn.