Financiers a key cog in the wheel for logistics business

Logistics today is defined by complexity. Globalisation has connected operations into intricate webs, with both local and multinational players navigating high-stakes financial transactions. Often, this complexity leads to cash getting tied up in the system, causing significant cash flow challenges for businesses.

As your logistics business grows, sustaining that momentum demands consistent cash flow.

A reliable financial partner becomes essential—providing access to capital for growth, enhancing operational efficiency, and helping navigate international trade complexities. Ultimately, such support boosts profitability and resilience.

Owning a logistics business in Kenya is no small feat. Challenges abound: poor infrastructure, high fuel costs, regulatory hurdles, stiff competition, and the pressure of managing a skilled workforce.

Yet, success is still within reach—especially if you have a dependable financial partner to guide you through this dynamic, high-reward sector.

However, not all financial partners are created equal.

Choosing the right one requires deliberate evaluation. Here’s what to consider:

Begin by evaluating your current and projected logistics needs—transportation, warehousing, and distribution. Understanding your specific requirements helps you find a partner who offers tailored financial solutions, not just generic packages. A custom-fit approach is essential in a sector as diverse as logistics.

Experience matters. Choose a financial partner with a proven track record in the logistics sector. They’ll better understand your unique needs and offer relevant solutions. It’s even more beneficial if the partner has experience in your operational area. Localised expertise helps them navigate region-specific challenges efficiently.

Technology is reshaping logistics globally. Seek a partner who leverages modern tools like warehouse management systems and digital platforms that can integrate with your business systems. This not only improves efficiency but also provides real-time insights into performance metrics and inventory management.

With Africa betting on trade integration—especially through the African Continental Free Trade Area (AfCFTA)—a financial partner’s geographical reach becomes a key factor. Choose a company with a robust network that spans Kenya, the region, and even international markets. Such reach opens doors to market expansion and smoother cross-border operations.

Your financial partner must understand and comply with local, regional, and global regulations. We operate in an environment governed by standards, and a misstep can lead to costly penalties. Ask about their risk management strategies: how they handle disruptions, manage inventory, and ensure legal compliance.

Dig into their track record. Are they known for reliability? Evaluate their history of on-time deliveries, accuracy in order fulfilment, and their ability to adapt during disruptions. A partner’s past performance can offer insights into how dependable they’ll be in critical moments.

Today’s business landscape is shaped by inflation, geopolitical shifts, tight regulations, and frequent logistics disruptions. These factors demand financial agility. A trustworthy partner can offer flexible, low-cost financing tools to manage liquidity—particularly useful if your business has a stable product line but inconsistent cash flow.

Ultimately, choosing a financial partner is more than a transactional decision—it’s a strategic move that shapes your business’s future.

The right partner not only helps you weather industry storms but also powers your journey towards expansion and sustained success in the competitive logistics space.

The writer is Head, Vehicle and Assest Financing, Stanbic Bank Kenya