Practical Guide on Starting a Haulage Business
Starting a haulage company can be a great way of becoming your own boss.
The global haulage market size is estimated at $2,945.6 billion and is increasing. The pandemic created more demand because of more people purchasing online.
While rising fuel costs and Brexit were worrying for freight companies, the industry is set to keep growing. This makes it a great time to start your own haulage business.
Our practical guide will advise you on the capital needed, your legal obligations, choosing the right vehicles and staff, and how to get work.
Reasons to start a haulagecompany
If you’ve thought about becoming your being self-employed and starting a freight-forward business, there are three main reasons why it’s a good idea.
There are low entry requirements to get into the freight industry, which saves time on training, so you can get started relatively quickly.
You don’t need a lot of capital to start up a haulage company compared to other businesses.
Many people like to manage their own company for many reasons. And starting a haulage firm is a great way to do this. You can manage your time to fit in personal commitments; you can make your own decisions, and don’t have to answer to anyone. Do you want to start finding business partners immediately for your haulage company? For example, to find goods to transport right away? Then apply for free for a demo account.
How much money do you need to start a haulage business?
On average, it costs £34,048 for a single vehicle business. This includes wages, a licence, insurance, fuel, and training.
You can lease your equipment rather than pay outright which will help reduce your costs. If you are new to the industry, this can also be good to start slow and see how it goes before expanding and investing in expensive equipment like vehicles.
And what’s the cost of running a haulage business?
It may not take a lot of capital to start up your logistics business, but you need to consider your ongoing costs.
These will include wages, vehicle upkeep and purchase, rent, insurance, vehicle excise duty, tolls, and training.
You can cut your costs by driving yourself, but you may need other staff such as administrators.
Freight forwarding legal obligations
As with all businesses, you will need certain documentation when you set up your freight company.
You will need a HGV license. You will also need to apply for your Operators Licence, which involves passing your CPC certificate of professional competence.
You will also need to send an application, along with bank statements to the Department of Transport who will then grant you your licence.
You need to obtain insurance to cover your vehicles and your goods that are being transported. This is called public liability insurance and professional indemnity insurance. If you do have staff, then you will also need employer’s liability insurance.
Laws can change, so you should check the latest haulage sector rules and regulations and keep updated with these.
Where to get essential haulage training
Now you know about the legal and financial aspect of starting your business, it’s important to get specialised training. Organisations such as the British International Freight Association, the Institute of Export and International Trade or Chartered Institute of Logistics and Transport offer specialised training courses.
One of the most important training courses you should undertake is a health and safety training course to ensure you are fulfilling your responsibilities towards your drivers.
Start shaping your haulage business
After catching up on all the main requirements you need to start your haulage business, it’s time to shape your company to suit your needs and capabilities.
1.Focus on a niche
It is best to choose a particular sector to cater to. This benefits you because you become an expert in that niche which can differentiate your haulage business and can make it easier to attract customers.
If you already have experience in a certain market, it would be good to choose this, as you already know about it.
Your niche will also be determined by the location. If you want to stay in a certain location, then you will need to ensure whatever goods you want to carry, is in demand in your location.
Choosing your niche can decide what type of vehicle you need, and some vehicles are more expensive than others. You may want to choose a niche that enables you to have a smaller vehicle.
2.Choose the right vehicles
There are many options of vehicles to choose from which will depend on the type of goods you want to carry and the terrain your vehicle will be driving on.
You don’t have to buy new as a pre-owned vehicle can do just as well. You can also lease your vehicle to reduce your initial investment.
The types of trailers you use will affect the vehicle you need. For example, if you only use trailers, a 44-ton articulated lorry.
Curtain sided trailers are suitable for a range of different industries, if you are planning to move different goods. These will also give you more choice of the type of vehicle you need.
3.Choose your location
You may want to choose a location near to where you live to save you time and money. Your location also needs to be near main routes to save time and fuel from getting from your warehouse and onto your route.
Certain geographical areas will be more expensive than others for warehouses, so you may want to check the prices for different areas before choosing your location.
4.Set your prices
To be competitive in the haulage sector, you will need to offer low rates. If you can start by offering lower rates than your competitors, then you should quickly get business. You will be able to raise your costs as you become more established.
5.Getting the right staff
When hiring staff, it is important that you check their references and do a background check. Your businesses success relies on having the right staff. If your drivers are not reliable then it will quickly tarnish your reputation.
You will need staff who are easy for your customers to approach and make the experience as convenient as possible for them.
It is not only about hiring the right staff but also treating your staff well by continuing training, offering support, and providing the proper resources for them.
Finding loads for your truck
There are lots of ways to find work such as creating a website, networking, and marketing.
You could create a simple website to advertise your business, but you will need to put in time to send traffic to your website. Once you get traffic to your website, try to capture their information, even if it’s just an email, so you can create a list of potential customers and market to them through email.
Make a list of businesses in your area that fits with your niche and contact them through either phone, LinkedIn, or email.
You can also advertise through digital channels such as social media or send print marketing to potential customers. You will need to take these costs into account when you are looking into starting a logistics company.
Sign up to a freight exchange
You can also sign up to a freight exchange such as TIMOCOM, to manage your freight business for you. A freight exchange helps to streamline the process and saves you money and stress. You can always check the status of your freight to ensure your business is running smoothly.
A freight exchange also saves you from having to find your own contacts, which can take some time to build up yourself, especially when you’re just starting out.
TIMOCOM has a large network of potential business partners. We can connect you to road hauliers, freight forwards and trade companies.
It’s not easy to start a haulage business but using a freight exchange can help take some of the stress away with automated tasks and no hidden charges.
If you want more information on how we can help you set up your freight forwarding company, contact us today.
