6 Simple Steps To Start A Transport And Logistics Business

6 Simple Steps To Start A Transport And Logistics Business

Transportation and logistics are among the top industries that have experienced immense setbacks due to the pandemic. Nations all across the globe imposed severe restrictions on the import and export of goods.

Consequently, the global industry witnessed a drop in its market size from 6 trillion euros to 5.73 trillion euros. (One euro is equivalent to 1.04 US Dollars as of November 2022.)

Fortunately, after two years, the industry is bouncing back incredibly. According to Statista, the global logistics industry’s market size is expected to reach the mark of 13.7 trillion euros (14.2 trillion dollars) by 2027.

So, if you are wondering- “What is the right time to commence a transportation and logistics business?” It is right NOW.

Moreover, with the expansion of the global eCommerce market (size $5.55 trillion), the demand for shipping, logistics, and transportation, is accelerating.

That said, it begs the question- How to commence a transportation and logistics business? To get your answers, continue reading this article.


What Is A Logistics Company?

Logistics is a vast industry that may range from shipping products and services locally, let’s say, Philadelphia, to international trucking operations. Typically, it falls under three categories:

  • Private transportation: Services such as ride-sharing, taxis, and limousine services are part of private transportation. Often individuals or small groups use these one-to-one services.
  • Local transportation: Delivers goods inside a specific area. Good here could be anything, ranging from livestock to building supplies.
  • Global: Transport that is handled internationally under either of the first two headings- a plane transporting passengers or a ship carrying goods.

The category your company falls into will depend on your resources, the number of employees you can acquire, and other factors. That said, let’s learn some tips to start your business.

Tips To Commence Transportation And Logistics Business

1. Find Your Niche

As stated above, there are different categories of this business. So, you must decide the niche you desire to establish your business. Of course, once your company is set up in Philadelphia, you can expand to the niches. However, you need first to lay the foundation for your business.

For this, you can conduct market research. Learn what transportation is most in demand and draft a plan from there. You may also find a void in the market that you can fill if you don’t already have a speciality in mind.


2. Decide The Business Name

You’ll need to decide on a name for your business to register it and turn it into a brand. Though deciding on a name may sound fun and creative, you must be vigilant during the process.

This name will be used for your website, logo, and licenses and indicates the message your business wishes to deliver.

Once you have shortlisted a few names, verify that the name is not already used. After that, trademark your business name and make its intellectual property. This ensures that nobody can use your business name, and you hold an exclusive right to use it nationwide.

3. Get Appropriate Licenses

Numerous licenses and permits are required for the transport and logistics business to operate smoothly. Obviously, how many licenses you need depends on what goods you intend to move.

For instance, you must adhere to the Department of Transportation rules to haul freight. These permitting regulations generally concern the dimensions and weight of the cargo you’ll be transporting.

Likewise, you must ensure that your employees have the necessary licenses to assist in the business’s smooth operations. Simply put, make sure your drivers have obtained CDL training in Philadelphia or other reputed training schools.

This will give you peace of mind that your drivers know the ins and outs of the truck or commercial vehicle driving, along with information about vehicle safety.

A CDL license with your drivers will further make it easier for you to hire experienced and qualified drivers.

4. Understand All The Costs

A general misconception of the transportation industry is that the clients will cover overhead expenses. However, this is not true. This strategy can land you in hot water if unanticipated costs arise.

Instead, plan out your company’s finances before you begin. Thereby, you must answer the following questions:

  • Where will you obtain startup funding?
  • What regular costs unique to the transportation and logistics sector will you incur? (fees, tolls, license expenses, etc.)
  • What will be the average cost of vehicle operation and maintenance?
  • What will your marketing expenses be?
  • What will be the cost of storing your automobile when not in use?

Understand that by estimating your expenses appropriately, you’ll be able to avoid unpleasant surprises. Moreover, it will make you look professional during investment meetings.

5. Get Funds

Whether you are commencing a sole-proprietorship business or an LLC, you’ll need to secure capital to aid your business to sail smoothly. To avail of funds, you may choose any of the following options:

  • Get a business loan from financial institutions, SBA, or other lending institutions
  • Use your business credit card to pay overhead
  • Borrow finances from family and friends.

In addition, you must also keep personal and business accounts separate.

This will help you keep a tab on the expenses and maintain them appropriately. Believe it or not, separate business bank accounts and credit cards will come in handy when filing for taxes and building credit scores.

6. Build Your Fleet

A transportation and logistics company depends on its fleet. You need to ensure that the vehicles you invest in are in good condition and promote the brand seamlessly.

Remember that your fleet will represent your brand on the road, so you must buy a high-quality fleet. When purchasing a vehicle, you may consider the following questions:

  • Do you need to carry passengers?
  • What should be the ideal weight capacity?
  • What are regular wear and tear of the vehicle?
  • Are there any eco-friendly options available?

These will help you invest in the right fleet for your business and ensure that you kickstart the brand smoothly.


The Bottom Line

To start a transport and logistics business, regardless of its industry, is no easy task. You first have to clearly understand the ins and outs of the industry, in this scenario, a transportation and logistics company.

After finalizing your mind, you can follow the instructions above to get a head start on your new venture.

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Post Author: Abimbola Joseph

Abimbola Joseph is a creative content developer who derives pleasure in encouraging individuals to be the best they can be in all relevant facets of life. She believes that we all have a better version of ourselves which can be leveraged to impact others and make the world a better place. Connect with me on Instagram @abimbolajoe.

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