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4 factors frustrating logistics industry in Nigeria exposed

Pundits operating in the nation’ logistics and haulage sub-sector have identified key three factors inhibiting the growth and development of the industry.

According to analysis by experts, the sector is battling with three issues ranging from high-interest rates, operations cost and stringent government regulations.

However, lead in the challenges nationwide remains poor transportation infrastructure which has been delaying the unlocking of the sector for growth over the years.

No doubt, the sector had witnessed sustained sliding profiles in the last few years owing to drops in the state of both federal and state highways across the federation.

Investigations by Business Hilights intelligence Unit (BHIU) revealed that the logistics company’s business model is structured into courier services, freight services, logistics, and support services.

For example, leading indigenous operator and Imo State born core investor, Chief frank Nneji, the President of Associated Bus Company Plc, also known as ABC Transport Plc, a Nigerian transportation company has continued to try several survival strategies in the last couple of years.

First, after years of clear success with lead company, the ABC Transport PLc, he began serial expansion and diversification into such areas as cargo services, haulage services, importation/sale of vehicle spare parts, assembling of heavy-duty trucks, and installation of vehicle speed devices.

Also, Red Star Express’ logistics and freighting services, after observing lull in the sector tried out entries into different market segments, including companies and individual customers’ deliveries of parcels and documents.

However, a look at their performances shows dwindling fortunes over the years as both re-fleeting and additional diversifications are becoming weak in the last couple of years.

Whereas jumping OPEX especially in the areas of maintenance cost and monthly wage bills have been unprecedented, the negative impacts of sector-over regulation remain a key drawback.

Further fact checks show that government policy inconsistencies and over-regulation according to some experts have not only impinged turnover, but have forced several budding companies out of business.

Analysts say regulatory hard knocks coming from the Nigerian Postal Service, the federal agency in charge of the industry had become unbearable especially since NIPOST lost relevance because of the advent of GSM revolution which frustrated mailing activities in Post offices nationwide.