A haulage business can be a great startup if you know what you’re doing and these tips are here to help.
In order to be successful in the hauling business, you need to have a keen eye for efficiency. Because of increased competition in the marketplace, there is a rise in companies offering low rates. This means a new hauling company must be able to operate efficiently and be able to differentiate themselves from the competition, in order to gain market share.
The money side of the business is important. You must ensure the services you provide are profitable. Each day you need to consider how commodity costs, such as the cost of petrol, will affect your company%’s ability to turn a profit.
Services Offered by a Hauling Business
You must decide which services your business will offer. By establishing your business in a niche, you can increase the chances of winning more business by differentiating yourself from the competition. Before choosing a niche, make sure there is a large enough market for your services. Some possible services include:
- General haulage
- Waste disposals
- Warehousing and distribution
- Parcel delivery
- Vehicle transport
You must bear in mind that the transporting of certain goods, such as livestock, require compliance with certain regulations and statutes.
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Fleet Type and Size
According to the Road Haulage Association, over 57 percent of companies in the hauling industry have just one vehicle and 87 percent have fewer than five. The larger your fleet, the higher percentage of your work will go towards overhead. By adding more vehicles, you may be cutting into your profits. Because of the competitive nature of businesses in this industry, it can be difficult to get enough work to pay for more vehicles. That’s why it’s best to start small. You can buy new vehicles after you make sure you have the capacity to profitably and sustainably grow your business.
When purchasing your vehicles, you’ll need to determine if you want to use petrol or diesel vehicles. You may also opt to use an environmentally friendly option. Vehicles come in various sizes and shapes. They can be rigid or articulated. Make sure the one you choose is suitable for the types of services you want to offer.
You’ll need an operator’s license if your hauling vehicles are heavier than 3.5 tonnes.
Location and Warehousing
All haulage companies need to have an operations centre. This is the location where vehicles and goods will be stores and vehicle maintenance carried out. The location must be strategic since you need to have access to important routes and easy access for other vehicles if companies need to deliver products to you.
The rental rates for vehicle warehousing may be lower than renting a commercial property, depending on the geographic variations. Unit in or around London may be three times the price of units in Scotland or Wales. However, you must remember the impact of congestion charging on your profitability.
Empty loads are one of the largest drains on a haulage company’s profits. If you drive a shipment from London to Scotland and then return with an empty vehicle, you are using the company’s time and fuel, but not making any revenue. Specialist distribution and networks exist that can help to mitigate this problem. Check into these schemes to see if joining one can help to minimize the number of empty loads and maximize your returns. Here are some of the trends in haulage at the moment.
Regular Costs and Duties for a Hauling Business
There are many regular costs that hauling companies incur. These costs can be variable or fixed. Some costs, such as overhead, can be steep. If you want to start a hauling business you must be aware of all of the costs in order to ensure it will be profitable.
Here are some common overhead expenses:
- Vehicle maintenance
- Vehicle Excise Duty
- Vehicle cleaning
- Vehicle insurance
- Warehouse rent
- Insurance and compliance.
Some expense such as vehicle insurance is mandatory. In order to ensure you get a policy to fit your business’ needs, you should consult a specialist in lorry insurance. Professional indemnity insurance and public liability insurance are also required, as well as employer’s liability insurance for your staff. More info is available on public liability insurance by Constructaquote.
There are other regulations you’ll need to comply with, including the tachograph legislation, which ensures your drivers only work a certain amount of time. The law states how long they can work. If you break these rules there are severe penalties. In order to meet these requirements, there is certain equipment that needs to be installed in order to monitor vehicle use. Your job will be to check the data regularly to ensure your drivers are in compliance.