blurry imageJoseph talks us through navigating risks in the commodities supply value chain.

Reading time:5 min read

Joseph talks us through navigating risks in the commodities supply value chain.

Precious OkoroJune 10, 2024

Joseph Minti believes you must have a huge risk appetite to be a player in the supply value chain, but you need double the appetite to work in the commodities value chain. He says this has influenced his attitude to different life risks. Having spent nearly 4 years as a logistics analyst, he sat down with us to answer a few questions about his experience on the job. Join us as he walks us through the good, the bad, and the ugly of logistics in the commodities sector.

Hi, who’s taking our seat today? My name is Joseph Minti. One and only.

Oh please. Lol. I like what you have on your wrist, also, can we know you better? Thank you, I like them more than you do.

I work as an analyst with the logistics squad for AFEX Fair Trade Nigeria. Though we work within the office, we are barely on seat, as there are loads of calls to be made from truck drivers to warehouse managers.

Barely on seat? How so? This role gives you both a feel of working behind a computer and a taste of the fieldwork. We oversee the haulage and movement of our commodities.

Ideally, we deal with both clients and off-takers. For example, if a client is demanding 5 metric tonnes of maize, we’re in charge of ensuring the quality is up to par with the request and the movement from the warehouse or any location to the client’s destination without a hitch.

It sounds a lot like 2+2 = 4. It’s straightforward. Is that just the process? Well, it's not just as simple as you just implied, there are loads of activities in between the movements and let’s not forget external factors. I’ll walk you through an ideal order procedure.

Firstly, you get an LPO which is a Local Purchase Order from a client stating quantity, quality, and estimated time of delivery for the said commodity. After an agreement is reached, it is moved to the trading desk, to ensure the commodity is being traded on the Exchange and inventory is out of the warehouse.

Then gets an OTP which is a prerequisite for any stock to be moved out of the warehouse, of course, operationally. We the logistics squad take it up from here, we source the right truck for whatever volume the goods are and make sure to get experienced drivers for the journey.

Are there truck drivers for specific trips? Not necessarily, but some have a good understanding of how to maneuver the roads and are required for longer trips. it's important to find a reliable partner who takes ownership of the entire process, from pickup to delivery. After all, things don't always go according to plan (we're all human!), so having someone prepared for unexpected situations is key.

Speaking of unexpected situations, how do you handle it? Having a good reputation and thinking fast on your feet is the key to this for us. Of course, sometimes we have to count our losses and try not to encounter similar problems but you’re dealing with changing human behaviors, sudden policy changes, and insecurity.

You could have a client cancel an order after it has been dispatched, the next step would be to look for someone within that same location to sell to, sometimes it comes at price slashes. Sometimes these cancellations of orders are due to mechanical issues too. Certain clients have opted out of a transaction because their processing machines went bad.

That’s risky, are these issues recurrent? Ahh, yes. It’s the risk of the sector, it is volatile but vital for everyone’s survival. We all need food. For every transaction, we’d have to factor in the chances of a high percentage of risks.

After a delivery has left the warehouse, anything can happen. Risks such as looting of vehicles, accidents, robbery, and run-offs by drivers. The glaring loop is that there are little to no ways to track these incidents. The exposure to risk in the supply chain of commodities is larger than we think, and we need better policies and access to affordable technologies.

How so? Certain technological inventions can be used to track the movements of drivers rather than relying on word of mouth regarding their locations, state of goods, and movements but they’re expensive. Information intelligence is needed in the sector.

Also, better policies by the governments and unions. We've had issues of harassment of drivers from the forces stationed by roadblocks and unions in different route states demanding fees because of the size of trucks or the time of truck movement.

In some states, you cannot drive heavy trucks during the day. All of these affect the quality of dispatched commodities and even operations. Beyond the making of the policies is also sensitization and adoption.

Do you enjoy the job, seeing as it keeps you on your toes daily? Over and over again, it helps you move around your daily life, and I work with the best squad. So yes!

This is the second part of the series on the Heart of our Commodities Trade at AFEX. Look out for other stories in the coming posts.

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