The last-mile challenge in Nigeria begins with insufficient postal service distribution. Poor addressing systems in sprawling urban and rural areas, combined with inadequate transportation infrastructure, results in frustrated customers, struggling businesses, and a lot of motorcycles.
The Nigerian Postal Service (NIPOST) operates 955 post offices across the country, as well as 3000 postal agencies in areas where it does not provide service. There is one postal service for every 48,000 Nigerians when both offices and agencies are counted. This is in contrast to the United Nations’ recommendation (via its Universal Postal Union) of one post office for every 6000 people.
Notwithstanding the Nigeria’s low ratio, NIPOST’s overall service quality has deteriorated over time. Multinationals such as FedEx and DHL, as well as enterprising Nigerian logistics firms and a network of informal courier services, have worked hard to fill the void left by NIPOST’s failures.
Exorbitant licensing requirements, outright bans on motorcycles, security threats, and criminal allegations against couriers, on the other hand, disrupt business. The impact is most noticeable in the rapidly growing e-commerce sector, where everyone from large startups to WhatsApp vendors must deliver goods to their customers offline.
Benjamin Adeyemo and Udochukwu Nwaogbo founded SmartParcel to address the issue of last-mile delivery. Their goal was to make it easier for businesses to ship products or fulfill orders to customers who could then pick them up at their leisure.
Registered users and businesses can use SmartParcel to deposit parcels and documents in a nearby smart locker operated by a SmartParcel franchisee. The goods are then delivered to a locker near the receiver or to any locker requested by the consignee by SmartParcel’s courier partners. Courier partners can also deliver the items directly to the homes or offices of the consignees. Only when the courier agent or consignee enters the correct automatically generated four-digit PIN will the lockers open.
In essence, it is an Instabox for Nigeria.
DHL, the German logistics company, launched a similar service in 2017, but only in its office locations. SmartParcel, on the other hand, intends to place its boxes in NIPOST offices, malls, residential estates, and other secure but high-traffic areas. It has already signed an agreement with NIPOST to install smart lockers in post offices across Nigeria’s 774 local government areas.
According to Adeyemo, his company’s goal is to “have 10,000 Lockers across the country via a franchise model where individuals and corporate entities can own lockers, monitor activities from a dashboard, and earn revenue.” It has already placed boxes in several Lagos locations, including TDA Mall and some Sterling Bank branches.
A smart locker system that promises to free up delivery agents and reduce costs is an ambitious project.
Because of the reality of outdoor self-service postal boxes and its current growth strategy, SmartParcel will be limited to deploying lockers in mostly secure urban areas. This combination could result in the service being deployed in mostly-gentrified areas, lending the brand an elite aura. It could also imply that the company’s impact on simplifying last-mile logistics in rural areas will be limited. Or it could simply be part of a strategic plan to limit its expansion to areas with commercial appeal.
Nonetheless, SmartParcel’s collaboration with NIPOST suggests that it is proactively building bridges with the public service that also serves as the regulator. The collaboration also suggests that, despite losing revenue and user appeal, NIPOST is still interested in remaining relevant.
The path to efficient last-mile delivery systems is not easy. Intelligent locker startups like Instabox claim to reduce inefficiencies and cut delivery costs, but they operate in regions with infrastructure that is several times more sophisticated than what is available in Nigeria. SmartParcel must demonstrate that it can do the same in spite of these differences.