OX DELIVERS: Driving the Path Less Taken

Just 43% of Africa’s roads are paved. 30% of all of the paved roads on the continent are in South Africa. Africa is home to the lowest automobile penetration rate in the world, with an estimated 44 vehicles for every 1000 people. In smaller, less developed, more rural nations, this is a problem. Transport and poverty are linked.

According to the World Bank, more than 50% of people of people who live in extreme poverty live in sub-Saharan Africa, and 70% of people who live in Africa’s rural areas are expected to be unconnected from a transport perspective.

Agriculture is often the industry of choice (or necessity) for employment. In sub-Saharan Africa, more than 53% of formal employment is in the agricultural sector. But often farmers are limited to customers within walking distance. Crops diminish quickly over long distances.

Clearly, there are challenges to be addressed. For this reason, OX Delivers – an exciting company in the logistics space – has started a pilot in Rwanda using electric vehicles to fill gaps in transport networks and deliver opportunities.

Started in the UK by Managing Director, Simon Davis, OX has raised significant funding to develop and deploy affordable logistics services using the electric OX truck in Africa. Ultimately, the company is planning for coverage across the world’s emerging markets, driving down costs with an inexpensive model that has minimal carbon impact. The vehicles will come flat packed and be easily assembled in country.

In Rwanda, known as the Land of a Thousand Hills, the road network is demanding with only 1000 km paved and the remainder dirt, dust, sand, gravel and mud. Often, four-wheel drive vehicles are required to navigate the challenging conditions. For farmers looking to send product to market in Kigali, or wholesalers looking to buy valuable grocery products from the country’s best farmers in the rural regions, OX Delivers is providing a much-needed lifeline, only paying for the space they take on truck rather than the entire truck. Currently, there are only seven cold store trucks operating in Rwanda.

CAREFULLY COORDINATED

The company sends electric trucks from depots in hard-to-reach areas, on a coordinated route within a 20km radius of the depot, to collect and return produce which is traded locally. On return journeys, important inputs are sent back, including fertilisers and other agricultural materials. For example, coffee beans are moved to drying facilities and then onto processing plants before heading to export corridors. The best part? The process is carefully planned by local experts through OX’s DriverPlus network, providing cost savings compared to traditional transport methods.

Managing Director for Rwanda, Francine Uwamahoro tells Enterprise Africa more about this exceptional concept.

“OX is delivering clean and affordable transport to emerging markets,” she begins. “We are focused on rural areas and we are addressing a situation where bad roads prevent drivers moving into rural areas. Through these roads is where the majority of groceries and crops and other agricultural products are coming from. We are bringing a solution where we send our trucks to reach the last mile of the bad roads so we can support, instead of individuals travelling long hours on foot with cargo on the head. Because the purchasing power is not high here, people cannot afford expensive trucks, so we are making affordability a primary concern by coordinating the journey and by using electric vehicles.”

In Rwanda, goods move on foot or bicycle in rural areas. Slow, dangerous and arduous, this system is not for the fainthearted, and does not allow access to lucrative markets like Kigali. OX Delivers will change this. The truck – developed in the UK by engineers with history across big names including Jaguar Land Rover – comes as a result of funding from the UK and US governments as well as other public and private institutions and angel investors. Despite its birth in England, the OX truck is designed for emerging and frontier markets. The goal is to manufacture something easy to put together and maintain, that can navigate severe conditions, and carry up to 3.5 tonnes – 20 times that of a man on a bicycle.

“We have started in Rwanda but our target is to cover the whole of Africa,” smiles Uwamahoro.

ADDRESSING COST CHALLENGES

In 2019, a convention around the industry was held in Kigali and local players discussed the theme of logistics as an engine of economic growth in Africa’s most densely populated country. The issue of cost of logistics was raised as most inhibitive, often representing 30-40% of total cost of goods. For crops including coffee and tea, this remains too high.

OX Delivers comes with a model based on a new way of trading, bypassing traditional systems developed for mature markets. The company believes that Net Zero ambitions must include Africa at the forefront of the fight against climate change rather than an afterthought; and as a driver of trade and a connector of people and industries, cost has always been at the forefront of planning.

“Our targeted customers love our affordability and our service, and they wait for us instead of going to competitors because they know of the additional services we can provide,” details Uwamahoro.

“Some competitors do not go to the farms because of bad roads and they charge too much because there is no coordination. They travel with empty trucks a lot and they do not have professional drivers.

“Our main competition comes from bicycles which have been hauling cargo here for a long time for farmers. Our value is that our price is similar to bicycles but also, we are able to deliver big quantities in short times. We are aware of how beneficial bicycles are and have been and, where vehicles cannot reach, we are partnering with customers to use bicycles for smaller loads,” she adds.

The electrical system that drives the utility truck is powered by an off-the-shelf EV powertrain that can achieve 100km range when the truck is fully loaded. A two-wheel drive system saves energy, cost, weight, and complexity, and clever engineering has resulted in performance that has most of the attributes of four-wheel drive but for less. Innovative suspension helps to balance the entire vehicle and this is the most important factor when navigating tough terrain. Compared to a typical pick-up truck used in many emerging markets, OX provides three times more capacity, twice the payload, and is the only electric option available. It is also significantly cheaper to run and maintain than diesel counterparts.

“We are currently piloting the model,” explains Uwamahoro. “The electric vehicle is manufactured in the UK and, right now, we have one prototype which is 100% electric in Rwanda alongside a diesel prototype, with two more electric models in the UK to arrive in Africa soon. We are testing in Rwanda because of the severe hills and road conditions we have here. If it can work in Rwanda, we are sure it can work elsewhere in Africa.

“Our main focus is to have an electrical vehicle available while we are developing the business model to ensure that what we are planning for the model will work in a way that is profitable. After that, we will look to expand. We project expansion into other countries in 2024 as we believe 2023 will be a year for proving profitability and making further electric vehicles available for expansion,” she adds.

TRANSPORT ECO-SYSTEM

Importantly, OX Delivers is not just an engineering supplier. The company is building an eco-system centred around clean transportation. For so many that would never buy a vehicle in their lifetime, this is a welcome innovation in a country where the target market for motorised transport is currently classified as non-consumer.

Through a 3G app-based system, OX Delivers can help users to book deliveries and collections as well as so much more including journey tracking and payload monitoring. Fuelled by the country’s successful 2G network and strong feature phone coverage, the majority of people have access to a phone which can bring opportunities for trade and development. A new version of the app, operable through a 2G network, is soon to be released as more trucks hit the market. There is also a web app for ease of contact, alongside the main channel – a free telephone number, 6960.

“Customers call us for free and we use Driver Plus – a network of drivers who can deliver cargoes and also handle financial payments, marketing, and brand recognition in the rural villages,” says Uwamahoro. “If a customer calls us, we agree on a time that the truck will be available and a time by which cargo must be delivered. If the truck is not available, we will always suggest a different time and coordinate how is best to deliver the cargo. We give a delivery note to the customer and we ensure the end user receives the exact quantity and quality. That has helped us to be competitive compared to others because we care about the safety of our cargo and the safety of our driver and customers. In terms of affordability, we have been able to deliver for 35% less than other companies in the market.”

Drivers are trained to negotiate prices effectively, market the business to the wider community, and collect payments efficiently. Prices are typically based on weight against distance, and drivers are given all the tools to understand cost of sales with daily targets to easily understand how much they can earn.

They can also handle marketing by interacting with local leaders and new customers to distribute the company’s message, often at ‘Umuganda’ – community events where members come together to achieve shared goals. It’s win-win for OX with the community getting help, roads being improved, and a deeper level of understanding developed of needs in the market. Since achieving first revenue in Q1 of 2021, OX Delivers has realised 40% month-on-month revenue growth.

“We have two categories of truck – one which is smaller and operates in rural areas and one which is bigger and can travel longer distances,” Uwamahoro furthers. “Our main customers are farmers and there are no longer many farmers near Kigali. But people need foods and groceries so we use a 10-ton truck to collect and deliver to Kigali. In Kigali, there are industrial centres from which the farmers must get their fertilisers, maize, rice and other essentials so we can distribute from Kigali to village and village to Kigali.

“There are also traders and business owners who want to purchase goods from farmers or products from industries in Kigali, and we are helping them to run their businesses by distributing what they need.”

INNOVATIVE & CONFIDENT

Easy to drive, cheap to run, and simple to manage, the OX truck and OX business model is a true example of innovation where it is sorely needed. Uwamahoro, who joined the company earlier this year, is a seasoned business leader and heads a diverse team unwavering in its desire to solve problems. Empowering women, creating opportunities, supporting economic development, and acting as a catalyst for change, OX Delivers is currently an African success story. 

Of course, the whole theory is built on quality. “Right now, we are responsible for maintenance of the trucks as we are still in the pilot stage. We work with different suppliers on spare parts, sometimes sourced locally and sometimes from the UK. Our drivers can do some minor repairs internally, and we are keen on safety so we are investigating suppliers of safety equipment. For us, quality is vital when it comes to spare parts and maintenance,” declares Uwamahoro.

“We encourage a gender balance and we have female drivers which is not common in Rwanda – currently, our team is 50% women. We are training our drivers to give professional and quality service to customers, and we are charging less than others so we are confident,” she concludes.

Are we witnessing the evolution of the logistics space in East Africa? Is OX a symbol of the future? Like the Ford Model T, GM’s Hydra-matic transmission, VW’s fuel injection, Toyota’s Prius, Tesla’s software – the OX Delivers truck and business model are mapping out a new way forward. The only purpose-designed vehicle for emerging markets, which is emission free, is reimagining transport and bridging the gap between transport and poverty.