In today’s fast-paced and digitally-driven world, logistics has become a crucial element of the e-commerce ecosystem. However, delivering products quickly and efficiently can be a significant challenge, particularly in developing countries where infrastructure and formal courier services are limited. In South Africa, Thumela, a pioneering logistics startup, is changing the game by leveraging trusted public taxi drivers to transport parcels quickly and cost-effectively.
In this interview Zamokuhle Twala shares how Thumela has developed an innovative counter-to-counter last-mile logistics solution with a focus on the township economy, that is disrupting the traditional courier services model in South Africa.
Thwala’s Multidisciplinary Mindset and Passion for Innovation
Zamokuhle Thwala is a South African entrepreneur and tech enthusiast who is making waves in the business world. Born in Ladysmith and raised in Durban Inanda township, Thwala’s upbringing instilled in him the values of hard work and entrepreneurship from a young age. He studied agricultural engineering at the University of Kwa-Zulu Natal, which he credits with giving him a multidisciplinary mindset that has been crucial to his entrepreneurial success.
Despite taking six years to complete his degree, Thwala never lost sight of his passion for business. He has started several businesses in the past, including his first startup, Agricool, which seeks to revolutionize the agriculture industry using technology. Thwala is a firm believer in using technology to improve humanity, and his passion for innovation has driven him to build businesses that make a positive impact.
The Inspiration Behind Thumela
Thwala, who is the Co-founder and Chairman of Thumela, started the company after experiencing a problem in 2019 when he forgot his charger at home while at school. He needed the charger for his presentation, which was due in a few days, but couldn’t find a courier company that could deliver it to him on the weekend. A friend suggested he ask his sister to give it to a taxi driver, which she did, and the charger was delivered within two and a half hours.
Although he didn’t know what the potential for the business would be, he thought that using taxis to send parcels could be a great opportunity. However, he was still building his first company, AgriCool, at the time, so he put the idea on hold.
After reading books such as “The Lean Startup,” “Zero to One” by Peter Thiel, and “Measure What Matters,” Thwala realized he had made mistakes in building his first company that could have been avoided if he had read those books earlier. This led him to create a framework for building a new company, step by step, applying the principles he learned in those books.
He created a Google sheet to collect feedback from people who had used taxis to send parcels before, and the responses he received helped him realize that there was a demand for such a service. Thumela was initially an experiment to see if he could apply the principles, he learned to build a tangible and successful business. The intention was not to start a new company, but it eventually evolved into one.
Challenges Faced by Thumela
It was not smooth sailing for Zamokuhle as the co-founder, encountered several challenges while building this business. One major issue was that, as the customer base grew, problems began to arise. Zamokuhle noticed that the taxi drivers who were delivering parcels now wanted to take customer phone numbers and contact them directly, which conflicted with Thumela’s system.
To address this issue, Zamokuhle realized that it would be impossible to deal with each driver individually. Instead, he leveraged the structure and hierarchy within the taxi association by approaching the queue marshals, who are essentially taxi managers. He asked them to handpick the taxi drivers who understood Thumela’s objectives and were willing to courier parcels to other Thumela points.
Another challenge Thumela faced was difficulty in growing the business beyond early adopters. Relying on individual customers to bring their parcels to Thumela points was not sustainable due to the lack of frequency and low lifetime value of each customer. In addition, customer acquisition costs were high, and marketing expenses were cutting into profits.
To address these issues, Zamokuhle decided to pivot to a B2B model, focusing on helping businesses send parcels to townships. Zamokuhle reached out to several courier companies on LinkedIn, and one JSE-listed logistics company Imperial responded. Thumela partnered with this Imperial to launch a pilot program in Alexandra, one of the most notorious townships in Gauteng.
The pilot program leverages the existing network of the taxi industry by having taxi drivers deliver parcels during their downtime, providing them with an additional income stream. This approach also solves some of the safety concerns around hijackings in townships. The pilot program has been successful so far, with a shorter lead time than traditional courier companies which has in turn yielded high interest from other big companies such as Skynet that want to be part of it.
Thumela delivers Fast-Moving Consumer Goods (FMCG) to township shops and faces various challenges as well. These include limited cash flow in tuck shops. Thwala believes that the company’s approach to tackling these challenges is to build partnerships that can help alleviate these issues.
Thumela aims to establish a working relationship between the shop owners and the taxi drivers, which will ensure that the shop owner keeps cash available for deliveries due and incentivize the taxi drivers to collect cash.
Carrying cash also present a risk for taxi driver even though they are used to handling it. To resolve this Thwala also suggests partnering with petrol stations where taxi drivers can deposit the cash as they already have a system for managing it and in return, the taxis will fill up exclusively at these petrol stations.
Partnerships and Technology
A few years ago, Imperial acquired Parcel Ninja, a fulfillment startup that offers warehousing and order fulfillment services to major merchants such as Edgars and TFG. Parcel Ninja through Imperial, supplies its technology to Thumela for free, to use for onboarding processes, which include scanning and weighing each parcel to guarantee accurate sorting. Skynet has shown a keen interest in partnering with Thulema, making use of technology provided by Dropper, and is willing to provide free access for Thumela to help them manage the fleet of taxis better.
Thumela is working on developing its own tool as well which will, among others, help manage payments to taxi drivers and taxi owners including in cases where taxi drivers couldn’t deliver. This tool will also provide visibility for the customer as well, to see when their goods have left the Thumela cross-dock facility.
Conclusion
Thumela’s innovative approach to logistics is an inspiring example of how technology can be leveraged to solve real-world challenges. By partnering with Imperial and Parcel Ninja, Thumela has created a decentralized logistics network that leverages trusted public taxi drivers to transport parcels more efficiently, affordably, and conveniently. The company’s focus on the township economy and building partnerships with shop owners, taxi drivers, and garage owners demonstrate a deep understanding of the local market and its unique challenges. With a commitment to using technology to streamline processes and increase efficiency, Thumela is leading the charge in transforming the delivery landscape in South Africa. As the e-commerce industry continues to grow, Thumela’s counter-to-counter last-mile logistics solution provides a compelling model for other startups and businesses looking to overcome the logistical challenges of the digital age.
