CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF STUDY

The frequently mentioned ‘logistics’ originated from the word ‘logistique’ or ‘loger’ in French

which mean storage (JWD, 2020). Logistics in English refers to a system that transports goods,

information and resources from a place of origin to a destination according to customer’s needs.

Logistics involves information, transportation, stock management, raw material management and

packing. Logistic is a part of the supply chain which utilizes space and time to add value to

goods. (JWD, 2020).

The term logistic is attested in English from 1846, where it was either coined or popularized

by Swiss military officer and writer Antoine-Henri Jomini, who defined it in his Summary of the

Art of War (Précis de l'Art de la Guerre). The term appears in the 1830 edition, then

titled Analytic Table, (Baron,1830). logistics is the process of planning, implementing and

controlling procedures for the efficient and effective transportation and storage of goods

including services and related information from the point of origin to the point of consumption

for the purpose of conforming to customer requirements and includes inbound, outbound,

internal and external movements. (CSCMP 2016)

The Oxford English Dictionary defines logistics as "the branch of military science relating to

procuring, maintaining and transporting material, personnel and facilities". However, the New

Oxford American Dictionary defines logistics as "the detailed coordination of a complex

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operation involving many people, facilities, or supplies", and the Oxford Dictionary on-line

defines it as "the detailed organization and implementation of a complex operation (Troy, 2014).

Nigeria located at the western part of African with population over 200million, she is regarded as

the largest economy in Africa, with a GDP of 440.8 billion dollar as of 2021. The Nigeria

logistics and supply chain sectors are one of the fastest growing industries in Nigeria, though still

in need of development in several key areas. As of 2018, the value of Nigeria’s logistics sector

was estimated to be $584 million (250 billion naira), a rise of $117 million (50 billion naira)

from 2017 figures. This was according to the 2018 Logistics and Supply Chain Industry report as

reported by Vanguard. Despite the drastic improvement in logistic sector the needs to improve

the sector is a need, Nigeria as the largest economy in Africa and the most populous African

country, still has a lot to cover in the aspects of logistic, but much is still left to be covered which

caused this study to looks into feasibility study on logistic.

1.2 AIM OF THE STUDY

A feasibility study is designed to help decision-makers determine whether or not a proposed

project or investment is likely to be successful. It identifies both the known costs and the

expected benefits

1.3 Main objective of the study

preliminary analysis, feasibility analysis, financial analysis, and swot analysis

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 CHAPTER TWO

2.0 INTRODUCTION

2.1 EXECUTIVE SUMMARY

The decision to start a logistics or courier business in Nigeria is a great decision, however, there

are certain regulatory hurdles that must be crossed to enjoy smooth operations and avoid

harassment by law enforcement officials.

Nigeria is an import heavy economy with potential for growth requiring a renewed focus on

infrastructural development. Given the vast nature of the logistics sector, local and foreign

operators require coordinated resources to engage the government to improve the overall

infrastructure network in Nigeria. Logistic as the name implies is a lucrative fast-growing

business of this modern era, but it needs to be proper done, the location, sources for client and

the most important of all is the business plan, a good business plan is needed for any business, it

is regarded as the blue print of the any business.

As with any organization, a logistic company needs vision statement, this vision statement shows

where the company aspire to be in the nearest future and the mission statement indicate the sole

purpose of the business, the impact the business will have on the economy or customers.

A survey conducted by the Lagos Chamber of Commerce and Industry indicates that the

Nigerian economy lost an estimated annual revenue of $8.1 billion (3.46 trillion naira) due to

poor infrastructure, poor implementation, and corruption at the ports. Of this number, $5.8

billion (2.5 trillion naira) are corporate earnings losses across the various sectors of the economy.

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According to the report, profit margins of corporate entities using some of the country’s key

infrastructure, namely the Apapa port, have gradually dwindled as logistics costs increased (ITA

2023).

2.2 PRELIMINARY ANALYSIS

2.2.1 Market Structure

The market structure generally consists of reaching an agreement with production companies and

individuals on providing courier service for them, the structure always involves consignment.

Consignment is an arrangement in which goods are left in the possession of an authorized third

party to sell or deliver. Consignment which is known to involves three bodies which are the

consignor, the courier services, and the consignee. Consignor is regarded as the person which

hire the service of a logistic company the courier service and which to deliver to the third party

which is known as the consignee.

2.2.2 Existing marketplace

In Nigeria, there are several local and foreign private sector companies operating in the logistics

industry, including Red Star Express (partner to FedEx), United Parcel Service (UPS), and DHL.

The government of Nigeria regulator, the Nigerian Postal Service (NPS), regulates the activities

of stakeholders while simultaneously operating the Nigerian Post Office (NIPOST), a courier

delivery service which competes with the private sector courier operators.

2.2.3 Market survey

opportunity for pursuing the project or business, the weakness of the other leading companies,

the strength of other leading company, the scope and mode of business strategies needs to be

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checked in other to come up with a good business plan. The market survey also needs to look at

target customers and client, a good market survey will involve the difficulties and challenges

facing logistic companies at the SME levels needs to be analyses, a swot analysis will also be

required in other to be able to determine the feasibility of the business plan.

2.2.4 Logistics Location or Service Point: Logistics generally relates to the procurement,

maintenance, and transportation of material, personnel and even facilities for these reasons a

good location really matters to a logistic company, a logistic company should be sited at the

heart of the city which will makes it easier to navigate for picking up from the consignor and

timely delivery to the consignee, a study shows that 80% of people living in the city and close

proximity to the city make use of logistic company. A logistic company must be easily

accessible.

2.3 FEASIBILITY ANALYSIS

of platforms, channels to increase sales and achieves sustainable competitive advantages. This is

very important in logistic business it helps in maintaining sustainability of the business and

enhance customers and companies’ relationship, some of the market strategy explored are further

explain below

2.3.1.1Technological consideration

Technologies such as GPS tracking and control towers have yet to gain traction in Nigeria, which

poses an opportunity for U.S. companies with the competence and technical skillsets to close the

gap in the market. Other upcoming technologies include real-time fuel management systems,

warehousing management systems, cargo management systems, and communication and

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information systems such as electronic data interchange (EDI) which can be used to reduce

paperwork and minimize the time taken for compliance procedures. A good look into modern

technology and equipment will give boost in the logistic company it will further improve the

satisfaction of customers if they are able to track their goods and a prompt reply to customers

complain will win and bind customers hearts to the services.

2.3.1.2 Payment method

A convenient payment options should be put in places this helps so solve another constrain in

business, some organization will only accept transfer or bank deposit slip, in view of the recent

cashless policy imposed by the federal government it is highly recommend to make all means of

payment available, discussion with the customers to understand the different payment options as

it suits them at different times. a plan to make sure that there is provision for them with payment

options that will make their transactions less stressful and very open.

Listed below are the payment options which can be made available to customers;

● Payment via bank transfer

● Payment with cash

● Payment via online bank transfer

● Payment via check

● Payment via bank draft

● Payment via POS

2.4 ADVANTAGES OF INVESTING IN LOGISTIC COMPANY

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In the last 10 years, online shopping has become common in Nigeria and changed the landscape

in how Nigerians shop. Online shopping and platform providers have provided easy and

seamless access to all kinds of local and international items. The online shopping sub-sector

generated revenue of about $4.88 billion in 2019, with expected annual growth of 20.5% in the

period of 2019-2023, resulting in a market volume of around $10.2 billion by 2023. The revenue

of the Nigerian e-commerce sector, in 2021, grew by 30% to $6.9 billion and is expected to reach

$8.52 billion by 2023. User penetration within the sector is expected to reach 52% by 2025. A

copy of the vehicle’s license; and Evidence of payment of permit fees.

Online shopping trends in 2019 showed that the fashion industry led with a transaction volume

of $1.76 billion and user penetration of 52.2%. This is expected to reach 75.2% by 2023. With

the ease of payments through mobile money, debit cards, electronic wallets, and other payment

modes increasing, increasing access to internet is expected to help this sector grow further and

give a boost to the logistics and freight market.

2021 eCommerce Revenue by Segment:

● Fashion – 35%

● Electronics and Media – 28%

● Furniture and Appliances – 17%

● Food and Personal Care – 11%

● Toys, Hobby, & DIY – 9%

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This above ecommerce data shows that there is still plenty of room for people to venture into the

business of logistic, because all purchase done online will definitely needs to be delivered by a

courier services.

3.0 FINANCIAL ANALYSIS

Financial analysis is the process of evaluating businesses, projects, budgets, and other finance-

related transactions to determine their performance and suitability.

Financial analysis is used to evaluate economic trends, set financial policy, build long-term plans

for business activity, and identify projects or companies for investment. This is done through the

synthesis of financial numbers and data. A financial analyst will thoroughly examine a

company's financial statements the income statement, balance sheet, and cash flow statement.

3.1 START UP CAPITAL

Self-fund: The amount /cost will depend on the approach and scale you want to undertake. The

start-up can either be low or high depending on someone goals: vision and aspiration for the

business, a startup capital is always a self-funded capital it is regarded as money raised either

through oral loan from the family or through saved up money.

Partnership: A partnership is another way to raise startup capital, when you find a mindlike

person that is ready to become partner by investing a considerable amount of capital, it’s a kind

of business where a formal agreement between two or more people is made who agree to be the

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co-owners, distribute responsibilities for running an organization and share the income or losses

that the business generates.

Investor: An investor is a person who allocates financial capital with the expectation of a

future return profit or to gain an advantage That is, someone who provides a business with

capital and someone who buys a stock. Another way to raise startup capital is by inviting people

to invest in your business, but to be able to attract a good investor, you will be needing a good

and convincing business plan.

3.2 BUSINESS REGISTRATION AND CERTIFICATE OF COURIER SERVICES

COST.

It is important to note that no person is to operate a courier service in Nigeria unless the person is

a registered company under or pursuant to the companies and Allied matters Act and is licensed

as a courier service operator, ignorance to do the necessary things or obtain the necessary

document might leads to harassment by law enforcement officials.

3.2.1 Regulatory Framework

The Courier and Logistics Services (Operations) Regulations 2020 (the “Regulations”) governs

logistics business in Nigeria in line with Section 62 of the NIPOST Act. The new guidelines

identify smaller operators within the Small Medium Entrepreneurs (SMEs) capsule, particularly

largely unknown as startups. The objective of the Regulations is to provide a regulatory

framework for effective and efficient Courier and Logistic Services licensing processes and

procedures and the regulation of the Courier and Logistics industry in Nigeria. To achieve this

objective, the new regulation provides for the following categories of licenses:

3.2.1 Requirement for Registration

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To be licensed under the Regulations, the entity seeking a license shall: Pay a mandatory

inspection and administrative fee which will be determined from time to time and levied by the

Minister on the recommendation of the Postmaster-General and this shall be a pre-condition for

the grant of such license. Secondly, the entity shall apply to the Minister through the Postmaster-

General for a grant of a license to operate Courier and Logistics Services in the manner specified

in FORM A in the First Schedule to the Regulations. The application shall be accompanied by

documents such as; Evidence of Payment for the specific category of License as may be

prescribed by the Minister from time to time, Evidence of Leasehold Interest in Real Property,

and a Business. A table below shows categories and price of each level of license required.

Category License Renewal Scope of License

Fee (N) Fee (N)

International 20,000,000 1,800,000 Logistics services across international

Courier borders

License

National 3,000,000 625,000 Logistics services nationwide

Courier

License

Regional 2,000,000 437,000 Logistics services within a geo-political

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 Courier zone in Nigeria e.g., south-west geo-

License political zone

State Courier 250,000 100,000 Logistics services within a State

License

3.3 REQUIRED STAFFING

A logistic company reputation relies mostly on their staffs and person of contact, experience and

educated staffs should be employed and well educated and given proper orientation about the job

they signed up for, they need to understands they are the face of the company, list of the needed

staff and their role are listed below.

In view of the above, this list of staffing is necessary to run a logistic company.

● General logistic Manager

● Human Resources and Administrative Manager

● Accountant

● Dispatch riders/ field agents

● Customer Representative/Front Desk Officer

1. General Logistic Managers

Responsible for the planning management and coordinating all logistic company

activities across the various sections on behalf of the organisation, supervises other

section manager, Responsible for carrying out risk assessment., Uses internet technology

and software to keep track of people and progress of the company, they are also in charge

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 of the proper maintenance of the company’s properties used in conveying or delivery

packages. such as the dispatch vehicles, motorcycles and bicycles.

2. Human Resources and Admin Manager

Responsible for overseeing the smooth running of human and administrative task for the

organization enhances department and organization regulation by accepting ownership

for accomplishing new and different requests, exploring opportunities to add value to job

accomplishments, defines jobs positions for recruitment and managing interview process,

carries out staff induction for new team members.

3. Accountant

Responsible for the financial aspects of the company, both the income and the

expenditure, the account is also responsible for the payment of the staffs in the company,

responsible for all the purchase done in the company, the accountant will report directly

to the general logistic manager.

4. Customer Care Representative/Front Desk Officer

They are responsible for receiving calls from customers and customers complaints, also

calling up customers to remind them of picking up their packages, they also handle email

of the company, and also responsible for attending to the customers that are consignee or

consignor of items.

5. Dispatch Rider/ Field Agents

This are staffs involves in delivery packages to the consignee, they are also sent by the

company to pick up packages from the consignor and deliver to the company before

dispatching such items for delivery to the consignee

3.5 SIGNAGE AND BRANDING ON VEHICLES

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For companies that intend to use branded vehicles, must have a Mobile Advert Permit which

allows signage and branding on vehicles for advertisement in the State. An application for a

Mobile Advert Permit is to be submitted, in Lagos state for instance it must be submitted at any

of LASAA’s offices with the following accompanying documents: a duly completed mobile

advert form; Photomontage or photograph of the vehicle showing its registration number

4.0 SWOT/TECHNICAL ANALYSIS

Swot/Technical analysis uses statistical trends gathered from trading activity, such as moving

averages (MA). Swot/technical analysis assumes that a security’s price already reflects all

publicly available information and instead focuses on the statistical analysis of price movements.

Swot/Technical analysis attempts to understand the market sentiment behind price trends by

looking for patterns and trends rather than analyzing a security’s fundamental attributes. This

helps to decide if the business is profitable or not, swot/technical analysis helps to analyses and

detect future threat and difficulties. Swot analysis helps to gather the following listed below.

● Strength: The strength of the company should include the confident aspect of the

company to achieve their mission and set eyes on their vision, how to strive in the

current market situation, what will make them different to the other competitors and

what will give them a hedge above other competitor.

● Weakness: The weakness of the company will be analysed in this category, it will show

the aspect the company needs to strengthen, the types of government policy limitating

the growth or enhancement of the company will be listed.

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 ● Opportunities: In the last 10 years, online shopping has become common in Nigeria and

changed the landscape in how Nigerians shop. Online shopping and platform providers

have provided easy and seamless access to all kinds of local and international items. The

online shopping sub-sector generated revenue of about $4.88 billion in 2019, with

expected annual growth of 20.5% in the period of 2019-2023, resulting in a market

volume of around $10.2 billion by 2023. The revenue of the Nigerian e-commerce

sector, in 2021, grew by 30% to $6.9 billion and is expected to reach $8.52 billion by

2023. User penetration within the sector is expected to reach 52% by 2025. These above

statics shows a very promising opportunity for the logistic company, because the

industry is fast growing and there is enough opportunity to be grab by the newly

established company of the logistic company, if they know how to source for their

customers and have a well details business plan.

● Threat: Some government policies and government agent harassment can be a threat to

business, a major example is the government policy on removal of fuel subsidy and the

current floating of naira, which has cost high inflation on every things both on logistic

delivery fee and that of purchase items prices, many customer might decide to walk into

a store and make a purchase instead of online purchase, another one is government ban

on the motorcycle riders it makes it hard to deliver on time, due to the high traffic on

urban states such as Lagos and port Harcourt.

5.0 SUSTAINABILITY

Sustainability is one of the crucial aspects of business if a business is not well sustained it will

liquidate in couples of years, there should be a sustainable path that will hold business owner and

investors accountable to the highest standard by meeting client’s needs precisely and completely.

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There should always be a follow up call to ensure every customer enjoys their services, and a

proper survey of the market needs to be done continuously to make sure the company strategies

are up to date, there should be a security search of all domestic workers at all time to avoid staffs

stealing away customers packages, there should always be a general meeting of all staffs where

matters arising can be aired and ironed out, the manger should work with the field officers to

gain knowledge of the demand by the customers.

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REFERENCES
● Baron de Jomini (1830). Tableau Analytique des principales combinaisons De La

Guerre, Et De Leurs Rapports Avec La Politique Des États: Pour Servir D'Introduction

Au Traité Des Grandes Opérations Militaires. p. 74.

● CSCMP glossary "Archived copy" (PDF). Archived from the original (PDF) on 22 May

2016. Retrieved 10 September 2013.

● International trade administration (2023)https://www.trade.gov/country-commercial-

guides/nigeria-logistics-sector

● Jwd journals 2020https://jwd-group.com/en/knowledge_bases/aboutlogistics/

● Troy T. Kirby, The Duke of Wellington and the Supply System During the Peninsula War,

CreateSpace Independent Publishing Platform 2014

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