What exactly does a 20 foot container mean to Africa
Transcriber: Naomi Ezaz
Reviewer: David DeRuwe
I’ve had a few inflection
points in my life,
but interestingly, I had two pivotal
moments inside 20-foot containers.
The first was in an X-ray unit
at my father’s hospital,
where I used to intern during
some holidays as a teenager.
I would use my lunch breaks,
searching the internet,
for new songs because I wanted to be a DJ,
and I thought I would have a career
as a music producer or a deejay,
but that didn’t quite work out,
unfortunately or fortunately.
But it’s still my favorite pastime.
Fast forward 14 years, and I found myself
inside a 20-foot container again.
This time I had a job as a strategist
at a shipping and maritime
logistics company
where I worked out of 20-foot containers.
And in this space and time,
I learned the painful but important facts
that changed my career path forever.
I remember attending countless meetings
about Africa’s maritime industry.
You’re listening to business leaders
and SMEs speak passionately
about how bad things were.
And sadly still, I learned Africa
has over half of the world’s arable land,
a third of the world’s mineral resources,
and a potential one-trillion-
dollar-a-year blue economy,
but somehow, you’re a poor continent.
During that period, I became aware
of the 20-foot container
and what it’s actually used for
beyond office spaces and X-ray units.
And to put this into context,
the 20-foot container is the most commonly
used container type in ocean shipping -
in international trade, of course.
At least 70% of Africa’s imports
and about half of our exports are driven
by container ships, according to UNCTAD.
Now, this means nearly everything
we use and own in our homes
and our businesses, our industries
all arrived to Africa
in a 20-foot or 40-foot container.
An even more alarming fact is, in Nigeria,
for every 10 imported containers,
eight return empty.
Today, Africa, with 1.2 billion people,
had an annual export
of $370 billion in 2020.
In contrast, between 1940 and 1991,
Vietnam had different wars.
Today, Vietnam,
with a population of 96.5 million
has an annual export of $200 billion,
according to “Stears Business.”
Now, that’s over half
of Africa’s total exports
but with 8% of our population size.
Now, these imbalances point to two things:
We are not capturing the full benefits
of international trade,
and we are not tapping
into our abundant resources.
We miss tons of economic opportunities
by not being intentional
about our 20-foot containers.
The UN says Africa’s population
will likely double by 2050,
and this means more than a quarter
of the people on Earth will be African,
according to “The Economist.”
While it’s all exciting
to be the last frontier,
I am genuinely concerned if we can provide
for Africans of the future,
and if we continue this path,
I don’t think we can.
Our containers go back empty,
not because we don’t have all
of the resources and products to fill them
but because the process of shipping
out of Africa is fragmented,
inefficient, and expensive.
And most crucially,
there’s little to no access
to trade finance opportunities
to facilitate international trade
for African small businesses,
and they make up 90% of businesses
on the continent, at least.
My team and I realized
that the countries and businesses
that win in the global markets
do not always have the most resources
or the best products.
They win because they can get their
products to buyers faster and cheaper,
and this is because
of efficient trade shipping
and access to affordable trade finance.
We lack both in Africa.
In fact, banks facilitate 40%
of the merchandise trade on the continent,
and this is far lower
than the global average of 80%.
And that’s also contributed
to a huge trade finance gap
of over at least $81 billion,
according to the African Development Bank.
In the last 30 years, international trade
has contributed to global economic growth
that has lifted over one billion
people out of poverty.
Somehow, Africa has not taken advantage
of that, but there’s an opportunity,
And that’s why I left
my 20-foot container office
and started a company with some
of the brightest, most passionate Africans
to move 20-foot containers for businesses,
leveraging technology and data
because we believe data-driven
trade processes will help Africa
capture value in international trade,
despite our infrastructural gaps.
We realize some African key export markets
have inadequate port infrastructure.
Similarly, our freight shipping processes
from warehouse or farmhouse or factory
to a container ship are inefficient,
also outdated, and mostly offline,
especially on the customer side.
So for instance,
before you get your products
from a factory in southwest Nigeria
to a buyer in Vietnam through Apapa port,
you’d have to go through
over 12 difficult steps
and spend up to 60 days or more
before your shipment leaves Nigeria.
It’s impossible to compete like that,
and I’m convinced that it can be condensed
into less than five steps
and shipped in less than 40 days.
If we automate and synchronize
the trade finance shipment booking
and customs processes with technology,
it will easily transform
the way African businesses trade.
And so we designed a simple,
data-driven flywheel
that describes the process
and benefits of international
trade automation in Africa.
And I call it Africa’s merchandise
trade flywheel, AMTF for short.
And so it starts with Femi.
Femi heard about our freight booking
WhatsApp chatbot through a friend,
and he goes ahead to create
a shipment booking and also a request
for $12 collateral-free purchase order
finance for a one truckload shipment.
So we financed and delivered
his shipments to his customer,
and he paid back before the due date.
He then went on to create more requests
and informed his business associates
about this platform.
They also created
freight and trade finance bookings,
and they qualified
for quality free-trade finance.
Now, because of the volume, we got
lower freight rates from our partners,
and now we’ve financed
nine container shipments for Femi.
However, the external flywheel
would be useless
without the technology core.
And leveraging our in-house technology,
we collect Femi’s historic
and current shipments,
as well as his business data
through digital channels
like WhatsApp chatbots
and web application platforms.
And then we use machine learning
and algorithms to analyze
this data to better understand
and predict Femi’s shipment times
and also his risk profile.
And with this data,
Femi now has a better credit score
to improve his chances
of getting larger ticket
trade finance at lower interest
rates from us in the future,
and we can also plan his shipment
weeks in advance.
Interestingly, it took us seven days
to analyze and make a decision
on Femi’s first request.
On subsequent requests,
it took us less than 24 hours,
and he also got lower interest rates
and faster freight pickup time.
And so this flywheel has helped grow
Femi’s business and increase his exports.
That’s the power of data-driven processes,
but to begin a data-driven
trade revolution,
we must be aware of our present crises.
Here’s a crazy statistic:
Africa accounts for 30% of global aid
and 3% of global trade,
I’m certain we’d love to live in a world
where Africa depends on trade
and less on aid.
If small businesses have access
to targeted trade finance,
they will create jobs,
it will accelerate financial inclusion
for women and youth,
which would reduce poverty and support
economic growth, which we need badly.
These are not magical
solutions, definitely.
There are far deep structural issues
affecting the continent,
but I believe a keystone step
to changing our aid-to-trade narrative
is to empower African businesses
with data-driven tools and access
to package and ship our products
easily in 20- or 40-foot containers.
Dr Ngozi Okonjo-Iweala, WTO president,
once said: “Trade is a force for good
and if properly harnessed,
can help lift millions out of poverty
and bring shared prosperity.”
Now, this and much more can be achieved
when we fill our containers
with the heart, sweat, and ingenuity
of our people and ship them abroad.
Abroad here doesn’t only mean
Europe, the US, China, or India.
It also means within Africa -
the opportunities
in African trade are limitless,
and I’m hopeful the AfCFTA
will be as impactful
as it was designed to be.
But it cannot happen
without ensuring faster and seamless
freight shipping processes,
then powering small businesses
with affordable trade finance.
And that is why my team
and I are on a mission
to change our trade narrative
with Femi and similar businesses,
but we can’t do it alone.
We all need to discover
our 20-foot containers
and figure out what we can fill them with
for the global marketplace
because when we do this,
we are securing economic prosperity
for more than a quarter
of the future people on Earth.
Thank you.