Starting your private business in the transport sector is not a wrong decision at the moment, especially with the constantly growing flow of online orders which has dramatically improved the starting position for forwarding agents, transport and logistics companies.
The path to self-employment, however, has several hurdles that have to be overcome. Here we inform you about the most important prerequisites for starting a logistics company.
Table of Contents
What is a Logistics Company?
The logistics company organizes and manages the physical flows of goods. The logistics company delivers finished products, supplies raw materials. Whether it intervenes upstream or downstream of its client’s production process, a logistics company is solely responsible for the transportation of goods and product delivery.
Simply put, a logistics company manages the supplies and deliveries of goods to its customers.
Is It Profitable to Start a Logistics Company?
Starting a business is demanding, but one that you can launch with fewer hurdles is a logistics company.
Starting a logistics company is a profitable business, and it is very easy to get started, even if capital is capital. Getting the right support (motorcycles, drones, vans, delivery trucks, and so on), and the right tracking devices are some secrets to successfully running a packaging and logistics services business.
Globally, the logistics sector is a thriving multibillion-dollar industry. In the US alone, there are over six thousand licensed logistics firms whose operations annually inject over two billion dollars into the US economy.
US-based logistics company owners earn an average of $96 per hour, which culminates in $672 per day, $20,160 monthly, and $241,920 annually. This goes to show that flagging off a logistics company won’t be a poor decision to make after all.
So, if you are serious about starting your own logistics company, all you need to do is read this article and it will equip you well. You may also take advantage of alternative businesses in the transport industry.
The Complete Guide to Start a Logistics Company
Let’s learn about “How To Start A Logistic Company” in detail:
#1: Pick a Startup Niche
The logistics sector of the transport industry is vast; hence, it is expensive to start, especially when you are only starting. Logistics companies have two major categories:
- the import and export of goods in and out of your country of residence;
- concentration on ground transportation within your country.
Logistics companies base their operations on sea, air, or land. A blooming logistics company needs some form of a transportation system to ferry customers’ goods. That is what gulps the bulk of money.
To make the startup burden lighter, we advise intending entrepreneurs to choose a niche.
#2: Don’t bother yourself because of an Office Space
An office location is important, but not a core prerequisite. Save the bucks you would have used to rent an office, redirect it to getting your business exposure. Once you are up and running, you can get a space suitable for you and your clients.
#3: Registration, and Licensing
Every business requires one form of registration or another. The next step after picking your niche is registration. Recommended mode of registration for small businesses in the US is the general partnership. The general partnership allows you to employ a few staff, and kickoff with a few fleets of cars.
A limited liability company (LLC), is a better alternative for businesses with the vision of growth and expansion. An LLC makes your business an entity and exonerates you from being personally liable for the business’s debts and obligations.
Business license requirements
You will also need to meet certain prerequisites for your business license.
You can get most license requirements in the US from:
- the Transport Security Administration (TSA);
- the Customs and Border Guard Administration (CBP);
- the Federal Motor Vehicle Safety Administration (FMCSA).
License requirements may be divided into three:
Technical requirements: statutory government authority organizes a specialist examination of legal, commercial, and financial management and other specialist areas. You will need the certificate received there for the approval of your transport business.
Financial requirements: You need a certificate of equity from your tax advisor, which must show that you have at least $10,000 equity. However, you require a further $6,000 in equity for each additional vehicle.
Personal reliability: Another requirement is the police clearance certificate, an extract from the central trade register, and a clearance certificate from the tax office.
#4: Road haulage permits
Every country has its laws about road haulage permits. The US Federal government has no unified laws on permits.
Anyone wishing to operate commercial road haulage in the US should weigh the option of permits available in your state. Likewise, entrepreneurs outside the US must check their Federal Highway Authority for laws unique to their nation.
#5: Approval for international road haulage
If you would like to operate road haulage across national borders with your logistics company, the above permit from the transport authority is not sufficient. For transports across the borders of the US, the US Department Of Transportation provides all the vital information. Entrepreneurs resident in states of the European Union (EU) and the European Economic Area (EEA) need a community license, also known as an EC license. This entitles you to transport across the borders of all states of the European Union, as well as Iceland, Liechtenstein, and Norway. Community licenses are to be applied for from the Darmstadt Regional Council.
#6: Requisite Documentation
Proper documentation is important for the smooth running of a logistics company. Requisite documents for a logistics company vary by location. Logistics companies in the US require the following documents:
- business plan;
- licenses for drivers, pilots, and other staff;
- registration certificate for commercial vehicle operators;
- proof of ownership of transport;
- employment contract;
- TM protection;
- contract and charter;
- insurance policy;
- a license allowing the conduct of logistics business in the US;
- tax ID;
- certificate of company registration.
How do I advertise my shipping company?
To be successful in marketing your newly established logistics company, you need to keep a close eye on your target audience and their needs. Because only when you have developed one or more “personas”, target groups, or customer profiles, can you develop and plan a marketing strategy. Advertising is often cheap and effective on the Internet. Your product or, in this case, your service is advertised quickly and inexpensively with social media. As a freight forwarder, we also recommend offline advertising. Above all, use your trucks as a mobile advertising medium and place your logo in large letters on your vehicles.
Conclusion
Congratulations, even though we do not boast that this guide is a piece of legal advice, but it is a powerful informational guide. By now, you have the requisite knowledge needed to start your own logistics company. Do you still have questions about how to start a logistics business? Reach out to us. We (StartBusinessTips)will be glad to help.
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