In October, a two-year-old Nigerian logistics startup shifted its focus from connecting business owners to last-mile delivery providers to providing fleet management software for companies with in-house fleets.
A truck-hailing startup, backed by Goldman Sachs, is in the process of developing fleet management software for manufacturers, fast-moving consumer goods (FMCG) suppliers, and micro-fleet truck owners. This software aims to assist users in managing their trucks, planning routes, and accessing invoice discounting.
The trend of software-focused fleet management is gaining popularity among logistics startups due to higher profit margins compared to traditional aggregator models.
Furthermore, software solutions offer scalability advantages over aggregator models, which require significant investments in building networks. This shift is appealing to investors seeking rapid revenue growth.
These software applications empower businesses to have better control over their cargo movement, reducing risks associated with lost shipments.
Factors such as rising fuel costs have made traditional logistics platforms with commission-based models less cost-effective for cargo owners and transporters.
While the revenue potential is substantial, selling fleet management software comes with its challenges, including customer acquisition difficulties and complexities in closing deals with valuable clients.
The established relationships of a long-standing logistics startup may play a key role in introducing their new fleet management software to businesses.