The transportation and logistics industry is a highly integrated supply chain network that links producers and consumers through multiple transportation modes, including air and express delivery services, freight rail, maritime and truck transport.
Shipping goods is such an essential element of today’s economy. Whlie T&L companies will always be a necessary, they will continue to operate in an increasingly competitive environment. According to PwC, “Some of the sector’s own customers are starting up logistics operations of their own, and new entrants to the industry are finding ways to carve out the more lucrative elements of the value chain by exploiting digital technology or new ‘sharing’ business models, and they don’t have asset-heavy balance sheets or cumbersome existing systems weighing them down.”
Despite the competition, T&L is an excellent business to start for those who are interested in the trade. If you plan to start a transportation and logistics business here are a few things to keep in mind.
Get your degree
First, gain industry knowledge through continued education. While some colleges offer degrees in logistics and supply chain management, a business degree might be more versatile and could prepare you better for running your own company. You can finance your degree by taking out private student loans in addition to any other sources, such as scholarships or federal loans. Checking for your eligibility and interest rates options with online lenders is a quick process.
Get some experience
You could try to get your business up and running as soon as you graduate from college, but you’ll have a better chance of succeeding if you get a few years under your belt of working in transportation and logistics for other people first. This will help you better understand the industry. During this time, you can start making notes about your own business and how you can improve on what you see the company that you work for and other companies doing.
Write a business plan
You’ll need to do this anyway if you’re going to get loans or investors. But even if you don’t seek outside investment, writing a business plan is a great way to test your ideas and identify any weaknesses. There are a lot of guides online to writing a business plan, but basically, you should include things such as marketing plans, projected income and a funding plan. When writing the plan, you should think about who your customers are and what you can offer that the competition doesn’t have. If you come to a section of the plan and you don’t have much to say or you realize your ideas are weak, this doesn’t mean you shouldn’t go ahead with your business. It simply means that you’ve identified an element that you haven’t sufficiently considered. This is your opportunity to fix that before you are actually up and running.
Ask yourself several questions
There are a lot of questions you should ask yourself before you get up and running.
- Will you rent or own your fleet?
- What size fleet do you need to have?
- Which processes can you automate?
- Do you want your drivers to be employees or contractors?
- What kind of software management system will you use?
- What are the regulations that you need to observe, and how will you make sure that they are followed?
- Will you use telematics to track driver behavior and improve performance?
- What kind of maintenance do you need to do, and how will you track it?
- How can you use artificial intelligence and the Internet of Things to create a more efficient fleet? Think about how this technology could be used to choose the best routes, keep your drivers safer and let you know where they are all at all times.
Craig Lebrau is the CMO of Media Insider, a Wyoming-based PR company that aims to disrupt the way companies communicate their brand in the digital era.
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