Dispatch riders increase delivery cost by over 100%, blame fuel subsidy removal

The recent decision by President Bola Tinubu’s administration to remove fuel subsidies has sent ripples through various sectors of the Nigerian economy.

Among those significantly affected is the transportation and logistics industry, heavily reliant on petroleum products. Unsurprisingly, the surge in petroleum prices has directly impacted the operational dynamics of this sector.

To understand strategies deployed by logistics industry players to navigate these challenges, newsmen spoke with Chris Olisa of the Lagos-based Colsa Logistics.

Olisa unveiled that the increased price of fuel has triggered a hike in operational expenses for the company. He emphasized that the activities that required N1,500 for their dispatch riders daily before the subsidy removal now cost as high as N3,500, a 133% surge in their logistics costs.

• “The knock-on effect was evident in his service charges, with the cost of delivery from Surulere to Lekki Phase 1 soaring from N2,000 to N3,500 post-subsidy removal.”

At the core of the local supply chain, entrepreneurs and business proprietors reliant on dispatch services find themselves bearing the brunt of increased expenses. Nevertheless, some logistics firms are extending reprieves to their clientele through rebates for bulk deliveries.

Olisa said;

• “We have extended to our customers bulk delivery discounts of between 5% and 10% to attract more services. Evidently, the uptick in fuel prices hasn’t deterred the demand for logistics services.”.

Amidst the aftermath of subsidy removal on the logistics landscape, Olisa also underscored an additional hurdle – the issue of dishonesty among dispatch riders. He stated that due to the absence of real-time update apps for outbound deliveries in many Lagos logistics firms;

• “WhatsApp emerges as the communication channel of choice for maintaining checks and balances between dispatch riders and business owners.”