Analyzing the profitability of logistics firms in Uganda: a case of Spedag Interfreight Uganda Limited

Abstract

This study focused on analyzing the profitability of Spedag Interfreight Uganda Limited with the view of finding a practical solution basing on the three main objectives that included; establishing the current state of profitability levels practices of Spedag Interfreight Uganda Limited, examining the causes of continuous decline in profitability levels of Spedag Interfreight Uganda Limited and designing the possible strategies for improving profitability of Spedag Interfreight Uganda Limited. The study adopted a cross sectional research design whereby a sample size of 59 respondents was selected from a population of 70 using a stratified and simple random sampling approach. 52 responded indicating a response rate of 88%. A five-point Likert scale structured questionnaire was used to collect data. The data was tested for reliability, analyzed using SPSS v23 and results presented based on the study objectives. Findings show that Spedag Interfreight Uganda Limited endeavors to manage its profitability levels by giving attention to keeping records of cash management, providing time to manage the cash, drawing cash budgets, knowing their revenues and expenses and liquid management. however, there are causes of decline in the profitability levels such as high transaction rates, operating in a volatile business environment, poor quality of the infrastructure services, high inflation rates, inappropriate government policies like high taxes and high product market competition, as identified in the study and there are strategies to address the challenges like proper warehousing and inventory management, receiving feedback from customers and providing feedback to suppliers, improving quality control during operations, using information systems, new products and service development in a short time and offering services that are distinguishable from competitors. Hence it was recommended that Spedag Interfreight Uganda Limited should improve record keeping, cash management, and warehousing and inventory management through putting in place information systems. The company should put in place avenues for soliciting and sharing feedback with customers and giving it to suppliers and manufacturers. All managers and finance officers of should undergo regular training in cash management practices to enhance their cash management knowledge.