Malobi Ogbechie is the founder of a logistics firm that is driven by technology, Kadan Kadan (loosely translated as “little by little” in Hausa language). In this interview by KINGSLEY ALUMONA, he speaks about the logistics industry, and how the government can assist logistics startups and reduce Nigeria’s over-dependency on importation.
You studied foreign languages at the undergraduate and postgraduate levels. What inspired your work/career in logistics and tech/IT-related businesses?
I was first introduced to the logistics and freight forwarding space during my first corporate job in the United Kingdom (UK) as a sales representative for a freight forwarding company. This was right after getting my master’s degree. At that time, the work experience seemed irrelevant, considering what I studied, but after seven years, a lot of the knowledge and experience I got from working there have been very useful in helping me set up my logistics company.
The main inspiration behind the logistics company came from my struggle to find a logistics provider that could offer the services I was looking for. My first business involved exporting fonio (acha), a grain that grows in Jos, to the UK. When I first started exporting, sending the goods by air was too expensive. So, I had to find a way to send them by sea. I spent many days running around Apapa port, looking for an agent to join my goods with another exporter’s shipping container.
With many logistics startups/firms in Nigeria, what specific problem is Kadan Kadan designed to solve?
When it comes to exportation, there are two main ways this is done. One is to send your goods by air, also called air freight, and another is to use sea freight. Both have their pros and cons. Air freight is a lot quicker, but it is also a lot more expensive. Sea freight is much cheaper but takes a month on average for goods to reach their destination. Many exporters in Nigeria would like to send their goods by sea to get the best rates, but they do not have enough money to pay for a full shipping container by themselves.
Kadan Kadan specialises in groupage, which means we consolidate multiple shippers into one container. This significantly reduces the cost of shipping for all exporters involved. For example, moving 1 ton of garri from Lagos to Houston Texas by air would cost about $3,500 to send it if we include clearance costs. However, if the exporter used Kadan Kadan groupage services, the cost would be close to $400. You can see with this amount of savings, many exporters are looking for this solution.
You mentioned that your logistics firm is powered by technology. What kind of technology and how does it work?
Our company has a mobile app, currently in its second stage of development, which makes the logistics process a lot more transparent and functional. The shipping industry is not very technologically-enabled and hasn’t been for a long time. A lot of the documentation is still done manually which can be frustrating for more tech-savvy customers. With our app, our customers can track their shipments, get instant quotes, and check the availability of shipments. We also have many other features in the pipeline.
Most Nigerian businesses and the economy are not ripe for tech-driven logistics services. What are people like you in the industry doing to create more awareness to enable local businesses to see the benefits of logistics services?
A lot of our marketing involves education. We have the Kadan Kadan Podcast which has many interviews with logistics professionals, exporters, farmers, financiers, and much more sharing their experience doing business across Africa. We believe that to get more customers, we need Nigerians to be educated on the opportunities there are in exporting. By listening to the stories of others, potential shippers can be inspired and avoid mistakes made by others in the past.
How are you bracing up for the stiff competition and challenges in the industry and where do you see your organisation in five years?
There is a lot of competition, but I welcome it. When I first started this business, many logistics companies neglected group age as a service and they are now taking it more seriously. This is good for the exporters because they have more options. In addition, more competition means more competitive prices.
As for our future plans, I see Kadan Kadan being the largest international shipping company in Africa. We have our eyes on other countries such as Ghana, South Africa, Kenya, and Egypt. There is a lot of room to grow. We also see ourselves owning ships but we will take it one step at a time as the name suggests.
In what ways do you think the government can assist small logistic startups to thrive and be on par with those in developed countries?
The government needs to reduce trade barriers. One of the issues in Nigeria is the illegitimate taxation that goes on. By that, I mean some agencies collect money from exporters and forwarding companies illegitimately. These costs pile up and make exporting out of Nigeria considerably higher than in neighbouring countries.
How would you advise the Tinubu-led Federal Government on the huge dependence of Nigerians on imported products and what would be your own contribution to this?
Sometimes, the problem is a lack of knowledge and transparency. If Nigerians were informed about which products are imported that can be easily grown or substituted in Nigeria, many would go into it. Many people in Nigeria have money but don’t know where to invest it.
Most importantly, our security issues need to be sorted out as soon as possible. If farmers no longer feel safe to go out to farm their goods, it will reduce our food supply and increase our dependence on imported products. We need an administration that can deal with our security threats head-on, once and for all.
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