How to start a Logistics or Transport Company

How to start a Logistics or Transport Company

What is a logistics or transport company?

A logistics/ transport company is a company that stores and delivers the products of other companies. Whether shipping, air transport, or trucking, a successful logistics business will need to have the means to transport goods; this makes a start-up logistics business a costly investment.

They may have expertise in importing and exporting products nationwide or may focus on land transportation within states. However, it is challenging for new businesses not because it is capital intensive but rather because it has to be reliable. Credibility is essential for any transport business because any organisation requiring transport services must know that they will not let them down.

Factors beneficial for flourishing transport company

Some of the essential points to keep in mind for benefitting and flourishing the transport company are as follows:

  • Experience and credibility in the industry

Before starting a logistics business, it is wise to gain some industry experience working in logistics. Such experience helps to understand the intricate details of the business. Additionally, working in the industry will help networking with companies that could represent future clients. Building credibility in the industry is the foundation of any start-up because customers need to have confidence that your business will store and deliver its products smoothly and efficiently.

  • Obtain financing

The primary official step in starting a transport company is obtaining capital. With the end goal in mind, you should develop a business strategy to persuade potential investors to make your business profitable. Integrate all the associations you already have in the logistics industry, ready to give you their business. Commercial banks are a potential source of capital for start-ups; hence approaching them may aid you with faster service.

  • Find out what documents the bank needs.

Contact the bank and find out about the formalities and necessary paperwork before applying for a loan. It always makes a very good impression when you are organised also show the bank you have the expertise. That means, before you reach out to the bank for monetary support, you should successfully demonstrate that you perfectly fit into the role. In short, you present in such a way that displays your capabilities of handling and running a transport company. Come prepared with innovative and attractive business strategies.

  • Security is required

One will need collateral (personal and asset surety) to cover the required loan amount. It pays to show the bank realistic cash flow projections and balance sheets for two to three years.

The different types of logistics or transport business one can start

Courier and freight service

Airfreight services

Warehousing services

Third-party logistics (3PL)

Options an entrepreneur has to start transport company

1. Set up your logistics and courier company, or

2. Take a franchise from a reputable and established courier company

1. Set up your logistics and courier company

Starting your own courier business requires a lot of money upfront to set up the network. Many small players in the country do well, but reputable foreign companies are well established in the logistics industry. Hence, to start atransport company, you need to raise funds from investors. One has the option of setting up a limited liability company and then raising funds from investors by allocating the shares of the company.

2. Take a franchise from a reputable and established courier company

Due to the lack of assets, not everyone can open their own courier business. Many successful logistics start-ups have discovered the courier or logistics industry by taking the franchise from different companies and, continuing their projects after understanding the market.

The scope of the logistics and transport company is varied – from a one-person show using a small truck to transport goods and deliver services to an armada of transport vehicles that venture into all regions of the country. Road transport includes commuter transport from taxis to bus transport. It can be a busy industry, and transportation company faces many dangers, but you can build an efficient business if you can do business.

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