Harvard-born idea nurtured in Kenya thriving across Africa
Co-founder and Chief executive Officer of LORI, Jean-Claude Homawoo during an interview at his office located at Gateway Park along Mombasa road on July 4, 2023. PHOTO | KENNEDY AMUNGO | NMG
When Jean-Claude Homawoo from Togo met a fellow African at Harvard Business School and struck a friendship, he didn’t develop the slightest idea of the lengths, the breadths and the heights that the rapport they nurtured would propel them to.
If anyone told Mr Homawoo and his South African associate Josh Sandler then that they would today be sitting at the steering wheel of one of the region’s most renowned Pan-African logistics firms, they would have simply laughed it off.
Founded six years ago by the duo, Lori Systems prides itself as one that powers Africa’s logistics needs by offering cost-effective, reliable and seamless cross-border transportation services.
When Enterprise caught up with Mr Homawoo, who now sits as the firm’s CEO as Mr Sandler takes his position on the board of directors, he revealed that the idea was first mooted at Harvard and came as a result of a thesis authored by Mr Sandler looking at the impact of logistics on emerging market economies.
“So basically, that research showed that logistics, specifically transportation on trucks, actually has a really big impact on the growth and performance of an economy. Because of heightened trade, most of the cargo moves on trucks,” he says.
“But most people don’t think much about trucks on a day-to-day basis. They drive next to them. They see trucks everywhere, but they don’t think about the impact they have.”
The CEO further details that the initial idea was to attempt to improve the truck transportation business, which they found to be very inefficient on the continent, especially concerning cost which was being passed on to consumers as an additional cost on goods. So why pick on Kenya as the first stop?
After graduating from Harvard, Mr Sandler did his internship with the Kenyan government. This, Homawoo explains, made the country the first and most viable launch pad for the business as it is the market that the co-founder had the first opportunity to interact with and conduct research on.
But there was more to it.
“Kenya was just a perfect place to do it. It’s the size of the country. The level of development of the country, you know, 50 million plus people. A lot of cargo moving, a central point across East Africa, a very busy port,” he says.
Another factor that influenced the choice of Kenya was their pan-African spirit, which couldn’t allow them to return to their home countries and had to find a convergence point outside of Togo and South Africa.
“Sandler and I both grew up in the US. At the tail end of it, we both wanted to be back on the continent. Our mindset is pan-African so it’s not like if I’m from Togo I have to go back there because it’s less about my own country than it is about this,” he says.
“The goal was to go back to the continent and make something happen. It didn’t matter where.”
Starting small
The business executive runs down memory lane on the moment the rubber hit the road stating that the starting point was unveiled in a largely manual version where the duo would just move around literally looking for transporters and building a contact list.
After building a sizeable network of say five transporters and 20 trucks, they embarked on the next assignment of trying to convince cargo shippers, with the trust deficit here emerging as the key impediment to their taking off.
“We would leave them with our contacts but they would never call. We’re the ones who kept calling every day until when they had had enough of our nagging they would give us small jobs,” Mr Homawoo reminisces.
“The process would then move to convincing the trucks to come do the job for us, and then hoping everything went well. And then getting paid, and then paying the transporter. So, you know, we started out very manual.”
Role of technology
Understanding that a large part of the targeted clientele is traditional folks who are heavy on manual operations, Lori deployed a simplified software that connects voice calls and WhatsApp chat interactions to an internal database so that staff members can keep track of operations.
“A shipper doesn’t care as much about technology, all they care about is having the lowest possible cost to move their cargo from point A to B, and that’s what we focus ourselves on,” says Mr Homawoo.
Technology, however, comes in handy in processing payments and digitisation of the volumes of logistical documents involved in such a trade.
Lori Systems, which is now commonly referred to as the ‘Uber for trucks’ connecting shippers and transporters, had at the time of this interview onboarded 20,000 trucks on its network, with a majority of them being from small and medium enterprises that own five to 10 trucks.
It has, since inception, served 489 clients, making 70,000 deliveries using 18,000 trucks.
The firm, which has three physical offices in Kenya, Uganda and Nigeria and provides transport services across 12 African countries, says it hasn’t even scratched the surface in response to a question of the market still being underserved.
“The market in Africa just for transportation is $200 billion (Sh28.2 trillion). It’s very, very big. But we’re still, I would say, very early in addressing all of the things that we need to address. And also we’re a startup and building startups takes time,” the CEO observes.
