🚚 The Way 84% of SA's Goods Move...

Alive and kicking? Tell that to the healthy UK woman who was recently declared legally dead by government computers. Hospitals wouldn’t treat her, she couldn’t draw pension — no matter how hard she screamed at them that she was clearly still alive.

In this Open Letter:

• Big moves: Streamlining SA’s R214bn road freight industry.

• SA’s championship economy, beefier interwebs & trashy power.

• Insights: How to build scalable FinTech for emerging markets.

• What you want AI to do for you: Our poll results are in.

• Free stuff? Share The Open Letter & get business tools.

Sponsored by

TRENDING NOW

Streamlining SA’s R214bn Road Freight Industry

Road freight accounts for almost 84% of SA’s goods transport in SA.

Perhaps in large part due to the failure of other freight systems. But it’s not all sunshine and mufflers, though, as the road freight industry needs to contend with attacks and looting (at R3–R10m per truck), often-undermaintained roads and rising fuel prices. 

Not to mention staving off threats by the Department of Transport to charge additional levies for trucks.

But we can understand why though: SA is in the midst of a logistics crisis the director of the South African Association of Freight Forwarders (SAAFF), Mike Walwyn, says is more concerning than loadshedding, estimating that our economy loses R1bn per day due to the underperformance of ports and Transnet (rail) – which constrained economic growth by 5.3% in 2023 alone.

The total freight and logistics market in SA is anticipated to hit R255 billion this year – shocking since Walwyn says operating our entire logistics industry costs the country 10.5% of GDP (that’s R789bn or a 67% loss). But that’s a story for another edition.

Today, we’re only concerned with the fact that, at 84% of goods transport, that means road freight could account for as much as R214 billion. It’s big business. 

Making the most of the trucks

Like ‘em or not, logistically, trucks power the SA economy. 

But it’s by no means an easy business to run profitably.

SA Road Freight Association CEO Gavin Kelly says fuel alone makes up almost 50% of a fleet’s daily operating costs because SA’s industry is so susceptible to fuel price fluctuations (for comparison, in the UK and US it’s only around 30-35%, in China just 25-30%).

And, though we don’t have solid local figures, internationally the driver’s salary makes up 44%. Sheez, not much left.

(You can get a full look at the expected cost VS operating costs of a truck in SA over its full lifetime here).

But, of course, this game is all about ensuring that every vehicle is fully loaded (or as close as possible) and making trips both ways. Empty trips sink, well… trucks, and that results in lost revenue.

And that’s where some tech ingenuity comes in…

Keeping the lines running

Local startup Linebooker set out in 2017 to build the “Uber of road freight”. And whilst many companies have started and failed with the “Uber of…” model, we can’t help but feel that the truck one is likely the one that has the potential to make it. 

There is limited loyalty with the provider. Moving yourself or, in this case, freight, from point A to point B is often time-sensitive, and when your preferred driver/car/truck isn’t available, anyone of a specific quality will do.

But take handymen or construction service providers. Often we can either wait for the preferred contractor to be available or we simply trust a recommended one. And so many a founder has found out that the “Uber of home renovations” just doesn’t work the same way. But that’s also a story for another day. 

Back to the trucks…

Linebooker is a marketplace for road freight — including finding tenders and bidding on fixed-rate repeat trips as well as offering unused space on trucks already travelling on specific routes. See, when your truck goes from Johannesburg to Cape Town with freight, but doesn’t have a load for the return trip, that’s a massive waste.

Linebooker lets fleet owners list their excess fleet space and allows those who want to make use of it, to bid on it. The platform facilitates the payments and streamlines the round-trip process, likely making some good margins on top.

Linebooker raised a handsome sum of money from ARC (Patrice Motsepe and co) and with road freight on the rise, they are positioned well to capitalise on another SOE failure. We are watching this space…

IN SHORT

👩‍💻 Future Coders. A free coding game, Tanks, Boats, and Rangers, developed by Nelson Mandela University is helping introduce kids in rural SA to code.

👷‍♀️ Google Startups. The 8th edition of Google for Startups Accelerator Africa programme is open for applications until the 20th of May with a focus on utilising AI/ML in a transformative way.

🌊 Beefier Internet. A brand new undersea cable (the T4) will replace the old South Africa-Far East (Safe) cable and is expected to have 1’000 times more capacity, and will hopefully resolve the internet issues SA has been experiencing the last couple of months.

🏆 Another One. SA is claiming yet another first place after the IMF’s Economic Outlook puts SA’s GDP at $373 billion for 2024 — a position it’s likely to hold until 2027 according to the projections.

⚡️ Gas Powered. The City of Cape Town is set to start producing electricity from one of its 2 landfill gas projects as early as this year.

BUILDER’S CORNER

How to Build Scalable FinTech Products for Emerging Markets

If you’re keen on building products that resonate with the local market, this week’s podcast is for you. We sat down with Andrew Katzwinkel, founder and CEO of FinTech LayUp which builds creative recurring payments tech for retail in the form of subscriptions, pre-orders and lay-by, to get some insights on building products that truly resonate with the SA market.

Catch the Highlights

1. The secret to making it sticky

It’s all about engaging deeply and honestly with the local realities, so you can use on-the-ground insights to drive uptake – catch the insights here.

2. Becoming entrenched in the marketplace

It’s not just about serving the consumer, creating value for partners in the wider ecosystem helps cement you in place – see how it’s done here.

3. Building for scale

Yes, you need to build securely but don’t inhibit future growth by building yourself into a corner – learn to iterate and expand here.

You can also grab the Spotify and Apple Podcast links on our website here.

YOUR VOICE

We asked what you’d like AI tech to read on your behalf, and taking over seems like the will of the people (oh and catch some crooks once you are in charge, please)…

🟨🟨⬜️⬜️⬜️ 🤦🏻‍♀️ This report my boss gave me to read. (5%)

🟩🟩🟩🟩⬜️🕵️‍♂️ Zondo transcripts, I’m going to catch them crooks. (30%)

🟩🟩🟩🟩⬜️ 🤖 Everything, read everything, do everything – ready for AI to take over. (30%)

🟨⬜️⬜️⬜️⬜️ 👩🏽‍🏫 I love reading, don’t see the point in this. (2.5%)

🟨🟨🟨⬜️⬜️ 📝 My bank statements – how on earth am I over budget again? (12.5%)

Your 2 cents…

AI is definitely going to speed up research, that’s for sure. Quick reference, lookups and helping make connections. We are here for it!

Alana, you might be onto something. Whitepapers are mostly reserved for subject matter experts, getting AI to break them down for us sounds like a great use case for it.