Thread by @bkt2010

Day 36: Trucking Business; A trucking business is a very profitable venture to start in any country. Road freight transport, or trucking, is essential to the economy of a country, occupying a unique socioeconomic position linking 1. supply to demand and 2. many industrial sectors

As the mode of transport that brings most goods to their final destination, the trucking industry is indispensable to the well-being of an economy. The trucking industry generates a significant portion of GDP, employing thousands of people,

and offering the primary means for moving domestic, trans-border, and international cargo.

MARKET RESEARCH
If you’re passionate about the transport sector then a trucking and logistics business can be the right business for you.

However market research is essential before you venture into the trucking transport business. You need to comprehensively know how the trucking industry operates. You must study the market to know which niche is best in as far as profitability is concerned.

The possible niches to cater for are numerous so you must know which ones are strategic to you. There’s a lot of competition in the trucking industry so you must study your competitors.

Note the loads they’re hauling, the types of clients they’re serving, the routes they’re serving, amongst many other things. Your focus will be to try to see their shortcomings or gaps that you can capitalise on.

Where to start? These seven steps point you in the right direction.

1. Support the right market niche
The most important step to be a successful owner-operator is to support the right market niche. This step affects small fleet owners as well.

The market you choose determines the equipment you buy, the rates you charge, and the freight lanes you can service.

As a rule, owner-operators should focus on markets that the large carriers avoid. In other words, consider hauling specialized loads.

2. Charge the right rate (per km)

As an owner-operator you need to determine what rate to charge your clients to haul a load. Your rates need to be high enough to give you a nice profit and pay all your operation costs.

You need to know your rates before you start calling shippers and making sales. Remember, when you call shippers, you want to be competitive with what brokers charge them.

There is a simple way to do this:
1. Select your freight lane
2. Go to a load board
3. Find 10 loads going in one direction
4. Call the brokers and find out how much they pay
5. Get the average

6. Add 10% to 15% to get the price brokers charge shippers
7. Repeat the process for the opposite direction

3. Determine your operating costs

4. Use the right fuel-buying strategy

5. Work directly with shippers

6. Run an efficient back office

7. Avoid cash flow problems
Trucking is a cash flow-intensive business. You are always buying fuel, making insurance payments, making truck payments, and so on.