Challenges Faced by Logistics Companies in Nigeria

1.0 Introduction
This report seeks to analyze the problems faced by logistics companies in Nigeria and
recommendations for better and efficient service delivery.
Logistics business in Nigeria is a new industry which evolve to solve the problems
associated with sending and receiving goods within the country. Before the advent of logistics
companies, local means such as commercial bus drivers and sending people who are going the
same way with the goods were used for sending and receiving goods. Today there are many
Logistics Companies in Nigeria both indigenous and foreign investors. Even though the sector
looks big and functions smoothly, it is still in its nascent stage, this can be seen in the 2018
Logistics and Supply chain industry report by Vanguard which showed its estimated value
around 250 billion naira ($696 million) (Armstrong M. A, 2019). If this is compared to other
countries across the world such as the US logistics industry which was valued around $213.5
billion dollars in the same year. Also very few people still patronize these businesses in the
country, which makes their turnover incredibly lower than expected. The logistics business in
Nigeria have a diversify mode of operation, from goods delivery to transportation of goods from
one place to another, they also perform services like information, inventories, warehousing,
material handling, packaging, clearing and forwarding, disposal and securities, just to mention a
few. List of logistics companies in Nigeria are almost infinite because of the huge investment in
this sector by both indigenes are foreign investors, even though the revenue contributions of the
sector to the economy is still at the low ebb when compared to other sectors of the economy and
also its counterparts in other countries. Examples of logistics companies in Nigeria are;
AB Logistics
This is a foreign Irish logistics company which operates in various countries across the
world Nigeria inclusive, it is a family business which offers efficient personal, reliable and
competitive price rates, their policy includes considerations of time, committed to complete and
customer priority. They offer courier services, sea freight, airfreight and road freight services.
GIG Logistics
This was established in Nigeria back in 2012 and since then it has been one of the leading
logistics company in the country. Its operates both local and international, GIG logistics can be
shipped to over 200 countries around the world. It is easily affordable and convenient. It offers
express delivery, inter-state transportation, commerce logistics services, domestic courier
solution and both local and international courier services.
Distinctcushy Freight
This is another logistics company at the top ladder of the Nigeria logistic sector. It is an
international freight forwarding and sea cargo shipping company and customs clearing agent in
Lagos Nigeria. Their services include door to door delivery, clearing services, sea cargo
shipping, procurement and supply chain etc.

DHL International
This is a German logistics company which have its subsidiary in Lagos Nigeria, this is a
leading brand in the world logistics industry and had contributed a lot to a lot of economy
through its courier, parcel and express mail delivery services. The company delivers more than
one billion parcels yearly and has over 300,000 employees over 200 countries.
Fed Express Logistics Company
This is one of the oldest logistics company around the world. It was established back in
the 1970s and still operates today and also in Nigeria. It has over 400,000 employees worldwide.
Their services include third-party logistics, freight, express mail etc.
The challenges faced by this sector is a limitation to its success and the economy at large because
this sector contributes a large quota to the economy of other countries of the world. This project
is undertaken to identify the problems associated with this sector and proffer lasting solution to
the problems. The major problems identified in this sector are both internal and external
problems affecting Logistics companies in Nigeria.
 Internal Problems
Unreliable Personnel
The drivers are the most important employees of the logistics companies because they are the
ones saddled with the responsibilities of getting the product to the customers and their actions
directly represent the values of the company. Unfortunately, there are so many untrustworthy and
ill-mannered people among the drivers and this has been a limiting factor to the logistic
companies in Nigeria. A lot of driver engage in bad unprofessional activities which leads to
accidents, theft and even bad image of the logistics companies. These had led to bankruptcy, loss
of value and even shutting down of lots of logistics company in the countries.
Risk Management
For every business wiling to survive the harsh business world must a reliable way of managing
risk (Pementer K. P. 2016). Unfortunately, risk in logistics business are not identified early as that
of other businesses, which make risk management a bone of contention in logistics business.
This lack of risk management strategy exposes the business to a lot of danger which can cut short
the lives of the business.
 External Problems
These are problems that are beyond the control of the business, they occur as a result of the
shortcomings of the economy where they operate and Nigeria as a country I not beyond short
comings. The problems include;

Insecurity
Insecurities is no more a news in Nigeria as the whole citizens and even people living in diaspora
are aware of this situation, and this affect every business in the country. Logistics business is a
very fragile business because it deals with lives and properties of their customers. Armed
robbery, deaths and kidnapping are some of the results of insecurities faced by the logistics
companies and these had been a limiting factors to the expansion and revenue generation of the
logistics companies.
Economic Crisis
Apart from the insecurities issues in the country, the level of economy is also a big problem to
the logistics company. So many Nigerians are in abject poverty, so many Nigerian live below $1
per day, this made it hard for them to patronize the logistics companies (OECD 2018). Even the
cost of maintaining an already established logistics company is really high compared the number
of patronage they get from their customers.
Competitive Market Space
Despite the dwindle economic situation of the country and insecurities there is still a
fierce competition in the Logistics industry companies like DHL, Distinctcushy Freight, FEDEX
to mention a few, are international giant in this field, the fierce competition from these
companies create a big problem for the indigenous logistics companies.
Technical details of the project
The project started with the introduction of the project which includes the project description, the
scope of the study and business method of the chosen area. The reason for embarking on this
project is also narrated this includes the problem and the possible solution to the problems. The
method which will be used to execute this project will follow and the justification for choosing
this method. In the running of the project, the researcher will the project will be delivered and the
steps which will be undertaken to deliver the project from inception to completion. Also the
project life cycle will be discussed, the potential problems faced in the course of this study and
how these problems will be tackled also stakeholder management will be emphasized and
information flow in the project.
Handling over of the project to the client will also form part of the project, the expected
outcome, benefit and impact the project will have on the client business and finally how the
results and recommendation are maintained so as not to create another problem. The references
and appendices will form the concluding part of this project.
The execution method of these project is a long essay and research mode because of some
limitations at the point of executing the projects.
Lack of data is one of the major problem in the country, unlike other nations who have adequate
and updated data for further research, Nigeria lack the necessary available data and this is one of
the reason for choosing the research and essay method.

1.2 Running The Project
Since the mode of carrying out the project is the long essay and research method, the
compilation will be delivered to the client in hard cover and seminar will be given on the reason
for carrying out the project, problems discovered during the research and the possible solution to
the problem, also the ways to implement them and how to maintain them so that other problems
do not arise from the solution proffered. The benefit of the project will also be emphasize, that
means the positive results which are gained with a help of the product. The result verification
will be carried out by the client with close monitoring by the researcher, here emphasizes will be
laid on time limitations, budget constraint and quality requirement of the client. The research will
take a month from inception to completion because of the problems encountered during the
compilation of the work and the seminar will take two weeks, because every bit of the work will
be practical so that it can be taught effectively.
The project begins from the problem identification, these problems will be discussed one
after the other and will be linked to the present economic situation of the country. The problems
have to be understood because that will bring about lasting solutions to the problems. The similar
problems will be reviewed from both academics and real life situations. These problem must be
related and also have similar causes or near similar causes, then the solutions to the problems
will be reviewed. When reviewing the solutions to the problem, the efficiency of the solution
will be tested and also the implications of the solution so as to make sure they do not create
further problems. The first two days of the project delivery will be non-practical while the rest of
the project delivery are practicalised. Just like it was laid out in the PMP in the appendices below
while the next two days are for project evaluation.
 Scope Creep
This refers to the project change requirement from the initial agreement to project initiation. This
is a popular problem since it has been identified by professionals in project management but it is
very easy to manage if done properly. For example, if the client suddenly makes a change from
the already agreed plan, the changes will affect the delivery and the project purpose. Increase in
both project finance and duration would be the only way to make the change possible. Also
being proactive when mapping out project is very important as it will help focus more on the
goal while project reviewing continues.
 Changes In Budget And Restrictions
This can also be a big problem during project delivery. Funds can be a big limiting factor for the
project manager and requesting more funds from the client might result in breach of contract so
the project manager must adequately map out the cost accurately to avoid such problems.
 Communication Issues
Communication is the very important in all sphere of life, lack of communication between the
two parties might result to loopholes in the efficiency of the project, it is also n hindrance to
effective and efficient project implementation. Bringing people together to sort out the problem
in communication is a very important way of sorting communication problem. Creating a projrct
environment where constructive feedback is valued is a tool for solving communication problem.