Rural logistics interviews

1.11.23

Interview 1: Tuk Tuk

Participant: Josphert
Interviewer: Daniela

The participant

 Has a shop – household items (run by his wife)

 Hardware business– cement, iron sheets etc.
 Transport business – Toyota Sienna Van and Cargo Tuk Tuk and Boda
 Farm – 4 acres, banana, sweet potato (half) and coffee
 2 children

The transport business

 Have a full time driver (15k per month)

 Cargo and passenger transportation
 Cargo – arrow root, sweet potato, banana
 No of passengers per day: 3-4 x 6 days = 20-24 customers per week
 Min no of 50-60-kg bags in tuk tuk = 5
 Bought a Tuk tuk in 2021, new for 250k – Dayun 250 cc (motorbike style)
 Had the Toyota van – bought a tuk tuk because you can load more and access areas
the van can’t
 Max load for tuk tuk – 1 tonne (don’t overload it) – 5 x 250kg bags
 Like about the tuk tuk: not easy to topple (can topple when the road is bad or
overloaded). Has toppled twice in 2 years
 Don’t like: breaks down twice a month
 Charge per 230 kg bag: 200 KES to go 7km to the market.
 If 2km – charge 100 KES
 Fuel – fill 1,000 KES at a time – circa 4 litres
 Other costs:
o Minor Repairs – 1k to 3.5k – change tyres once in 2 years – 5k
o Major Repair – 4K (wiring)

Summary financials

 5,000 KES revenue per day; 2,000 KES profit per day
 1,000 for the driver
 1,000 for repairs
 1,000 for fuel
 Insurance per year
o 4,500 Boda
o 6,500 Tuk Tuk

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 o 35,000 Car insurance

 He also has a loan for 1m, 89K per month for 1 year – used to buy 1 acre of farm land

Investment

 Saves money to invest in a pickup for cargo – 2m KES

Trading?

 No – not in the trading business

Customers

 Local traders
 Farmers
 Charged the same price

Tuk tuk vs Boda

 Tuk tuk can go into a muddy area

 Tuk tuk can carry more (cargo only – no passengers)
 Motorbike – easier to fall in the muddy area
 If have a small number of bags – send the Boda
 Boda has lower fuel costs
 Accessibility of region

Life of Tuk Tuk

 Use it for 7 years and then sell

 Expected life of Tuk tuk – 7 years

Passengers

 Only for people who want to rent the van and driver
 5,000 without fuel including driver
 3,000 for Tuk tuk with driver and no fuel
 2,000 for Boda with driver and no fuel
 Rental is rare

Van

 Bought new in 2022

 1.2m KES – paid cash
 Van is mainly for personal use
 5,000 revenue and 2,000 profit per day

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Electric

 Haven’t thought about it

 No knowledge of it

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Interview 2: Tuk Tuk

Participant: Francis
Interviewer: Daniela

About the participant

 Boda, 5 years old, 60K new in cash, Captain, 150 cc - saved for 4 years through buying
and selling of cows
 TukTuk, 1.5 years, 260K in cash - saved for 2 years through buying and selling of cows,
Dayun,

About the business

 Tuk tuk – cargo only

 Boda is for personal only
 Works for 3 hours per day
 Up to 5 customers
 Load – 60kg bag x 20
 Load – 230kg bag x 6
 Capacity = 700kg
 Works 3 days per week
 Earns 1K – 3K per day revenue per day
 Profit – 500k – 2k profit per day
 Customers pay in cash
 Also carried the farmer/trader to the market
 Views the cow selling business and the transport business as equally valuable
 On a 1K revenue day, he will pay 500 KES for fuel. On a 3K revenue day, he will pay
1,000 KES for fuel
 Customers contact him over the phone

Competition - are you competing with Boda drivers who do cargo?

 When volumes are low, they call the Boda. When high, they call a Tuk Tuk
 Threshold between the 2? 15 x 60 kg bags
 In this area is their more business for Bodas or Tuk Tuks? It’s a balance

Cost

 Repairs
o Major – 2,500 KES for engine for battery 2,500 for Battery (each has
happened once in 18 months)
o Minor – 50 KES once a month max
o Tyres – replaced one tyre once – 2,500 KES
o No insurance
 Fuel – see above

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  Loaders – 200 KES for 30 min (100 to load and 100 to off load) – if there is a high
volume. If not a high load, he and the farmer load themselves

Accessibility

 Tuk tuk can get within 20 metres of where the crop is grown – farmer/paid labourer
needs to carry it on their back
 Sweet potato is strong – no issues for physical damage in transport - unlike banana
which is more fragile (cushion with leaves)

Challenges

 Increasing fuel price

 Increased by 5 KES this month

Future plans

 In the same way he moved from Boda to Tuk Tuk, he wants to keep moving up and
growing
 Would like to save to get a lorry to carry larger loads

Fuel efficiency

 4.5 litres = 42 km
 9.3 km per litre
 50% loaded, 50% unloaded
 6.5km/litre fully loaded and 13 km/litre unloaded
 In this terrain
 Boda = 30 km/litre

Loans/credit

 Borrowed 70K for grazing unit for cows from Equity Bank at 12% over 1 year – repaid
it over 7 months
 Part of a self-help group who have an account with Equity – the group acts as a
guarantor (self-help group takes the loan)
 Would do the same for a lorry

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Interview 2: Truck driver

Participant: Elieud
Interviewer: Daniela

About the participant

 43 years old
 Farmer – 0.75 acre
 Transportation business
 Has Oxes – that he rents out – but now sold
 Farms his own land
 Has dairy cows – sells milk
 Transportation is the best business

Transportation business

 1 lorry
 Owns a 3 tonnes
 Also manages his uncle’s 7 tonne lorry (not the driver)
 For 3 tonne lorry – he does the driving (occasionally hires a driver for long journeys)
 Lorry is 36 years old (1987)
 600K – bought 1 year ago with cash – saved for 4 years
 3rd owner

 Transports building materials, helping people move homes, bricks and sand
(building materials), crops
 Sand and bricks are the main business – mainly in the dry season
 Clients for sand/bricks – homeowners who are building houses
 Clients for crops – mainly traders (few farmers) – circa 4 customers per week
 Works 7 days a week – if there is a job
 In last fortnight he worked 4 days because of the rain
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  Good day – revenue = 18,000 KES (10k profit)
 Bad day = 2,000 KES (500 – 1k is profit)
 Average day = 5,000 KES (2,500 profit)

Routes
 If the farm is far, can transport produce from farm to homestead – full load =
2,500 - 3,000 KES.
 Farm to local market
 No market to market – the bypassing vehicles are cheaper (who are empty)

Getting paid

 Charge per trip – but for sweet potato, charge per bag
 230kg bag for 7km = 200 KES (capacity of 15),
 120kg for 7km = 100 KES (capacity of 30).
 So full load = 3,000
 If half load then 1,500 Kes is increased to 2,000 i.e. 133 per bag (30% premium for
half-load)
 Get paid in cash immediately

Fuel

 Fuels prior to every order – works out his distance and fuels accordingly
 3km per litre full load, 5km per litre half load
 1,500 KES buys 7 litres

Maintenance

 Major
o Painting and rebody – 50,000 KES
 Minor
o Servicing – 7,500 KES every 7km (4 times a year = 28,000 Km per year)
 Tyres
o Changed 2 – 16,500 KES per tyre

Insurance

 8,500 per year

Driver

 10% of the order value if you need him

Accessibility

 Can go down farm roads – where tuk tuks can go

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  On average, visits 3-5 farms to fulfil 1 order (4 orders per week)
 Has the ability to do 3 (max 4) per day
 So that’s circa 3 hours per order

Challenges

 Lot’s of competitors – 4 in the areas with same sized truck for the same market (no
co-ordination)
 Customers through referral and loyalty

Future plans

 Buy a newer truck – but same size

 This is the right sized truck for this area
 Would feel that a tuk tuk is going backwards
 New truck is 1.2m KES

Credit/debt

 Not a registered business

 Doesn’t rent out his lorry – no demand
 Took a 70k loan to refurbish the lorry when he bought it from Fortune Sacco
 Repaid in coffee

Other

 Highway cost – 300 KES for 230kg bag

 Best cash crops are Arrow root, coffee, and sweet potato