Last-mile delivery is the most expensive part of logistics.
Not the long haul — moving goods from Lagos to Kano costs roughly ₦120-₦180 per km. The last mile — getting those goods from the delivery vehicle to the customer's door — costs ₦500-₦2,000 per km.
That final kilometer can make or break a logistics business. And in Nigeria, it's harder than almost anywhere else.
Here's why — and what technology actually works to fix it.
The 4 reasons last-mile delivery breaks in Nigeria
1. The address problem
Nigeria doesn't have a functioning street address system. Not in most areas.
"Plot 42, Adebayo Street, off Ikorodu Road, Lagos" is not a deliverable address. It's a set of clues that requires local knowledge to interpret. For a driver who's been on the route for 3 years, it's fine. For a new driver, or a driver covering for someone who's sick, it's a 30-minute hunt.
A delivery company in Lagos reported that 22% of their failed first-attempt deliveries were caused by drivers not finding the address. Not the customer being unavailable. Not traffic. The address itself was the problem.
The fix: What3Words or Plus Codes (Google's Open Location Codes). Every delivery location gets a 3-word address or a short code that resolves to a precise 3m x 3m square. Drivers paste the code into Google Maps and navigate directly.
2. The cash problem
Nigeria is still a cash-heavy economy. An estimated 45% of last-mile deliveries involve cash on delivery (COD). That means drivers carry cash. Cash creates security risks, reconciliation problems, and delays at every stop.
A driver with 20 deliveries and ₦350,000 in collected cash is a target. They're also a reconciliation headache: which payment belongs to which delivery? What if the customer says they paid but the driver says they didn't?
The fix: Digital payment at point of delivery. A simple POS machine or USSD payment code that the customer completes at delivery. The payment confirmation is instant and tied to the specific delivery. No cash, no disputes.
3. The traffic problem
Lagos traffic is legendary for a reason. Average speed in central Lagos during business hours: 8-12 km/h. That's walking speed. An 8 km delivery route that should take 20 minutes takes 60-90 minutes.
Traffic is unpredictable. A smooth run in the morning becomes a 2-hour gridlock by midday. Routes planned at 8am are invalid by 10am.
The fix: Dynamic route optimisation. Not a fixed route assigned in the morning, but a system that recalculates in real-time based on traffic data. When traffic spikes on one route, the system reroutes the driver. When a new order comes in, it's inserted into the optimal position in the route.
4. The availability problem
"I'm on my way" is the most common lie in last-mile delivery.
A delivery company in Abuja found that 35% of their failed deliveries were because the customer wasn't available when the driver arrived. The customer said they'd be home. They weren't. Or they were home but didn't hear the door. Or they were at a different address.
The fix: Proactive ETA sharing. The system sends the customer an automated message 30 minutes before arrival: "Your delivery will arrive at approximately 2:15 PM. Please confirm you're available." If the customer doesn't confirm, the driver is notified to try the next stop first. No wasted trips.
The true cost of last-mile delivery
| Cost Component | Typical Cost per Delivery | Notes |
|---|---|---|
| Driver salary | ₦350-₦500 | Per delivery (spread across daily route) |
| Fuel | ₦250-₦400 | Depends on route density and distance between stops |
| Vehicle maintenance | ₦150-₦300 | Tyres, brakes, suspension on bad roads |
| Failed delivery cost | ₦1,200-₦2,500 | Full cost of a second attempt + returned goods handling |
| Cash handling | ₦100-₦200 | Counting, reconciling, banking COD cash |
| Customer service | ₦80-₦150 | Handling "where is my delivery?" inquiries |
| Successful delivery | ₦930-₦2,050 | When everything goes right |
| Failed delivery | ₦2,130-₦3,700 | When you have to go back |
The gap between a successful delivery and a failed one is 2-3x. That means every failed delivery effectively wipes out the profit from 2-3 successful ones.
The optimised delivery workflow
Here's what a technology-enabled last-mile operation looks like:
Key insight
Every step in this workflow that can be automated — the ETA calculation, the confirmation message, the payment verification — reduces the cognitive load on the driver. Drivers who don't have to think about routing, communications, or payments deliver 30% more stops per day.
Where to start
If you're running last-mile deliveries in Nigeria, you don't need to fix everything at once. Here's the priority order:
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Fix the address problem. Start collecting Plus Codes or What3Words addresses from every customer. Add it as a mandatory field. This alone reduces first-attempt failures by 20-30%.
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Send ETA notifications. A simple automated SMS costs ₦5 per message. It reduces "customer not available" failures by 40%. ROI on this one is almost immediate.
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Implement digital proof of delivery. A camera and GPS timestamp on every delivery photo eliminates disputes. Most Nigerian logistics platforms include this as a standard feature.
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Add payment at delivery. POS or USSD payment at point of delivery eliminates the cash problem. Start with one route, prove it works, expand.
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Optimise routes dynamically. This is the most advanced step. Most companies get 80% of the benefit from steps 1-4 and only need dynamic routing when they're doing 100+ deliveries per day.
Meshgryd Systems builds last-mile delivery technology that works in the Nigerian context — bad roads, cash payments, unreliable addresses, and all. We start with one route and scale from there. Start a conversation →