How Stakeholders Can Ensure Sustainable Value Creation and Capturing in the Nigerian Logistics Industry in 2020

How Stakeholders Can Ensure Sustainable Value Creation and Capturing in the Nigerian Logistics Industry in 2020
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In the last decade, the place and importance of logistics industry have been synonymous with the changes in other industries, which the industry must serve with the adoption of the right processes, people, technology and solutions. There is no doubt the industrial is evolving everyone and a hybrid-centric one. The evolvement is a hybrid-centric because a significant number of people and governments rely on it throughout the world for employment and generating national income and foreign investments inflow.

On the demand side, the logistics industry is helping many businesses to increase competitiveness and deliver the promised value to their stakeholders. Hence, the logistics industry has a strategic mission of revitalizing and improving industries competitiveness worldwide.  Like other industries that lack sufficient data to determine market worth, there are different data on the worth of the industry in Nigeria from experts, researchers and public analysts. A recent view indicates that the value of the industry hits N250 billion in 2019.

Source: Global Logistics Performance Index, 2010-2018; Infoprations Analysis, 2019

In spite of the growth, various reports have indicated that there are challenges restricting value capturing by the businesses, governments and other stakeholders. In its recent report, PwC, a business management and advisory consulting company, identifies infrastructure deficit as the greatest problem facing the industry in Africa and placing the continent well behind the rest of the world.

In Nigeria, the issue of corruption, tribalism and power supply are the additional challenges preventing the stakeholders’ from creating and sharing sustainable value, and to trade development across the country.  Despite the problems, some stakeholders believe that the future of the industry is bright. Some experts have opined that the industry needs a Commission that would continuously deal with the identified challenges.

What has impacted Quality Logistics Services

Source: Google Trends, 2019; Infoprations Analysis, 2019

Using the Global Logistics Performance Index, which is being released every two years by the World Bank, our analysis shows that the average ranking of select indicators from the Index facilitates public interest in the industry by 52.9% in 2019. Analysis further indicates that activities of the customs connected with quality logistics services by 90.2%, while tracking and tracing methodologies used by the players and timeliness (timely delivery of goods) associated with the quality logistics services by 49.8% and 31.3% respectively. In what appears as a validation of the stakeholders’ views on infrastructure being the main challenge in the industry, our analysis reveals negative connection between infrastructure and quality logistics services. We specifically discovered -5.8% linkage, which suggests a 5.8% reduction in the quality of logistics services offered by the players in 2010, 2012, 2014, 2016 and 2018. The reduction was high when we analysed the ranking of the country’s shipment of goods to other countries along with the quality of services during the period. Our analysis reveals 22.5% reduction.

Based on the insights, our analyst believes that players and government have a lot of challenges that needs holistic solutions in the next decade, if the country is really ready to be at par with other countries in the world. Beyond the identified issues, experts have noted changing in customer experience, emerging technologies and smart logistics planning and execution as trends that would impact the industry in 2020.

It is therefore imperative for the players and concerned stakeholders to reexamine the processes, technologies and people being used for offering varied logistics solutions in the country. This is necessary because Nigeria cannot continue to be a second fiddle to South Africa, which has been consistently ranked as the best logistics performer on the continent.

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