Picture this: 10 tons of maize grown by 8000 different smallholder farms in Rwanda, all trying to get to market in Kigali. The challenge? The crops are here; the markets are there. Lack of access to reliable, efficient, and transparent transportation means farmers struggle to get their goods to customers. Spoilage, delays, and lost shipments all come at great costs.
That’s where Kumwe (http://www.kumwelogistics.com/) comes in.
Co-founded by Fletcher alumnus Charles Dokmo (F’14) as part of a team of supply chain engineers from MIT, Kumwe aims to create a ground transportation brokerage to serve as “the connective tissue” between shippers, including farmers and transporters. The brokerage is intended to ensure professional, reliable and affordable freight transportation, all while lowering costs and improving efficiency in getting goods to markets for small farmers and other shippers.
Back in the summer of 2013, Dokmo completed a Blakeley-funded summer internship in Chad following his first year as a MALD student. “This is where I experienced first-hand the challenge of last-mile distribution,” said Dokmo. “I was helping a small biomass charcoal and cookstove pilot project become financially sustainable when I discovered the largest barrier to profitability was a lack of predictable, affordable transportation.” This sparked the idea of Kumwe, which turned into a reality after Dokmo graduated from Fletcher.
Kumwe’s role of middleman between shippers and transporters in the fractured environment that currently exists in the Rwandan shipping industry caught the eye of The Fletcher D-Prize. Seeking to take proven poverty solutions and improve their reach, The D-Prize specializes in distribution innovation. As a winner of 2016’s Fletcher D-Prize, Kumwe received $10,000 to pilot this transportation brokerage in Rwanda, which, if successful, would represent a major shift in the distribution models available in East Africa. As a result, this would improve not only the financial well-being of farmers across the region but also get needed agricultural products to market.
Unusually high freight costs and disjointed transportation markets have consistently hurt both farmers and consumers. But despite these costs – partly borne by the farmer, decimating their profits – the Kumwe team noted that for many, cost is merely a secondary concern, trailing far behind reliability.
In Rwanda, the issue is not with the infrastructure – as Dokmo’s Kumwe co-founder Cyril Khamsi joked, “the roads are better than many in Boston,” but with the relationship between farmers and transporters. Seen as a mere transaction, there is little in the way of repercussions for bad service from the transporter. By using a brokerage model, poor service can jeopardize future business for transporters. Instead, they are incentivized to improve reliability, while the farmer realizes efficiency in limiting spoilage and increasing profit margins.
“We hypothesize that issues of cost transparency, lack of access, and poor asset utilization have served as barriers to small business growth in East Africa,” Dokmo said. “By addressing these structural barriers we hope to eventually help remove the roadblocks preventing poor entrepreneurs from growing their businesses.”
Kumwe piloted its brokerage with 20 independent providers over the summer with the aim to grow to 100 providers within a year. Starting with a simple brokerage model, the goal is to move to a technology platform – utilizing SMS, GPS, and eventually even an app that can serve as Uber for East African freight and cargo – once the basic service model is proven.
Results to date are very promising: Kumwe has hired two local employees on the ground in Rwanda and scheduled 22 deliveries. The team is also preparing to launch a pilot with the One Acre fund (https://www.oneacrefund.org/). They have added seven verified transporters to their database and, operating a bidding system, have been able to beat market price by 35% in their early efforts.
After gaining some early traction through the pilot, Kumwe is well on its way to reach their lofty goals. “We aspire to enable economic growth by providing a sustainable, easy-to-use service platform for buying and selling freight transportation of all scales,” Dokmo said. “In the long term, we hope to improve the stability of the transportation system in Rwanda and beyond.”