The transport and logistics business attracts many investors globally. It’s a lucrative venture, however, also a very competitive industry. Either way, you can still launch a new business and be successful. How is this possible? Have a look at these ideas for starting and operating a successful transport and logistics business.
1. Understand the right shipping methods
You most likely already know the standard shipping modes. These are; Less Than Truckload (LTL) and Full Truck Load (FTL). However, determining the right transport method is a challenge for many. Let’s first understand the difference between LTL and FTL. If you have an accident when shipping, contact a truck accident lawyer.
LTL- LTL is a method of shipping that employs multiple shipments from various clients. With an LTL freight carrier, you pay depending on the weight of the load or storage space occupied. LTL works best for clients running small or medium-scale businesses or businesses that don’t need a full truckload.
FTL-FTL is a ground freight transportation method that allows clients to ship goods using the entire truck. In this mode, you pay for using the truck, but not the weight of the load. FTL offers faster delivery and higher levels of security but is more costly than LTL.
2. Charge the right amount!
All transport companies offer varying rates for their services. Clients compare the cost among different service providers before making a decision. It’s advisable to offer attractive rates, particularly if new in the business. But, your rates should ensure you cover your operational costs. Know the current prevailing rates in your location, and use this to determine your charges. Furthermore, offers and promotions work best; give these often to get more clients.
3. Connect with shippers
Brokers are handy but very expensive. In most cases, they keep a certain percentage of the load price. Minimize using brokers and instead work directly with shippers. Come up with a list of shippers, and charge a competitive price.
4. Know & Control your operating costs
If you don’t track your operating costs, determining your profits will be a challenge. Know your fixed and variable costs, and learn to control them. Fixed costs are constant and won’t change, no matter the miles driven. Examples are insurance permits and truck payments. Similarly, variable costs vary depending on the miles covered. These are, for instance, fuel costs, which vary depending on the distance covered. You may also need to find a fleet maintenance company who will be able to take care of repairs and any routine work that needs to be done on your company’s vehicles, so that will be another cost to factor in when looking at finances.
5. Automate business processes
Managing a transport and logistics business manually can be exhausting and time-consuming. And this is particularly true if you have a large fleet. Luckily there is plenty of software out there to help you streamline all business processes, whether that’s looking to Tenstreet to help with the recruitment of drivers, or finding software that can help you to analyze your performance. You can ease the workload created by these business processes by implementing an automated solution. Transport management software will furnish you with data to help figure out your expenses, profits, and losses.
Final thoughts
Operating a successful transport and logistics company isn’t just about delivering goods faster. There’s more! You must understand how to track your expenses, deal with shippers directly and use the right payment modes. Like many other businesses, it requires a lot of dedication and effort to beat the competition.