Mr Anthony Balagadde, the chief executive officer of Crane Cargo. PHOTO/COURTESY OF HIS LINKEDIN PROFILE
Before starting Crane Cargo, a transport and delivery company based in Boston, Massachusetts, USA, in 2019, Mr Anthony Balagadde accumulated eight years of experience as an operations manager in the US-side transportation and logistics industry.
It helped a great deal that several people he routinely dealt with in his line of work often consulted Balagadde on issues around import and export of their goods.
Having lived most of his adult life in Boston with his partner, Ms Catherine Nakuya, the two decided to start laying the foundation to establish their own company. Crane Cargo would set out to provide a solution to the logistical challenges people were grappling with when it came to transacting goods between the USA and Uganda.
The company’s name was informed by the fact that the crested crane is Uganda’s national bird. The cherry on the cake was that Ms Nakuya’s father once turned out for The Cranes, Uganda’s senior national football team.
Anchored on transparency, honesty and safety, Crane Cargo was established in November 2019 with three employees in the USA.
Today, the company directly employs eight people in the USA and three people in Uganda. It also has running contracts with delivery companies, as well as truck drivers, advertising agents, clearance firms, tax agencies and more.
The company’s primary target includes people in the USA keen on sending things back home in Uganda; clients who would like to buy goods from America, for example non-government organisations (NGOs) who get donations in the US; business people with the US as their source; individuals who seek to access the American commerce like Amazon, Walmart, Apple and more.
Business model, challenges
For a customer who might want to buy a single pair of shoes from the Nike Stores, Mr Balagadde, who is the chief executive of the company, says “the first cost is really the cost of the shoe from the Nike Stores, which could range from $80 (Shs293,000) to $200 (Shs732,000), depending on the shoe you like.
After buying the shoe our minimum cost and luggage of three kilogrammes is $80 (Shs293,000) but of course there is variance in customs. Three kilogrammes of iPhone 14 will not be valued the same as three kilogrammes of shoes.” Part of the cost covers customs clearance.
Mr Balagadde told Saturday Monitor that Crane Cargo’s biggest advert is word of mouth by happy clients. He also advertises on radio, social media, billboards in Uganda and at events in the diaspora as well as churches and mosques.
“We have made mistakes with the profiles of the people we hire. At one time, we over-expanded by trying to go further than we could absorb. Experience is the best teacher and we have learnt from our mistakes,” the 36-year-old businessman disclosed.
The cargo company’s first earning was $600 (Shs2.2m) from a referral by a friend who wanted to ship a television set.
Mr Balagadde says what affects the bottom line are operational costs, typically labour in the USA and then the taxes in Uganda.
The company spends a lot of money to get a container out of Uganda Revenue Authority (URA).
“And the tax rates are not linear. I could import a sofa set and URA charges a figure, then shortly after that, I import the same sofa set but get charged differently,” Mr Balagadde expounds.
Another significant challenge is the financial loss incurred from abandoned cargo.
To address clients' fears of dishonest cargo service providers and long shipping times, Crane Cargo offers the option to pay upon delivery of items in Uganda.
However, some customers do not honour their invoices, leading to substantial losses.
For example, it typically takes three months for a container to move from America to Uganda, so someone can't pay money and wait for all that long unless they are confident and have trust in the cargo company.
Finding solutions
To remedy this, Crane Cargo’s chief executive takes the gamble of bringing in items by issuing an invoice to a customer who will pay after delivery. Some customers end up not paying despite receiving the items.
The problem appears to be unique to Uganda. In the USA, you can’t refuse to pay because there are systems.
The biggest loss the cargo company incurred was about $60m (Shs219.3b). Someone was constructing a house and ordered construction materials.
By the time the materials got to Uganda, a fire had swept through the house, claiming one life. Mr Balagadde had to abandon the invoice. He says systems need to be designed to protect business people like him.
“If there was a system of paying like 60 percent upfront then it would be nearly impossible to abandon invoices because the customer already made a considerable investment in the consignment,” he adds.
Nonetheless, he says there is a need for perseverance. Many people, he adds, get discouraged by the overwhelming cost of doing business, ignoring the investment in, for example, education right from nursery school all the way to university level.
Mr Balagadde studied Computer Science at Manchester University, in North Manchester, Indiana, USA, which has been pivotal in operating the online business portal. He says Crane Cargo is not where it is exclusively by their efforts but with relationships they have built.
“Of course, we work very hard day and night because of time zones. Malawi time is not the same as that of South Africa or Uganda. In the USA, the time in California is different from that of Massachusetts. This really tells you how much time we put into this; it’s almost a 24/7 business,” the entrepreneur further explains.
