Nigeria as a country owns the biggest road network in West Africa and the second largest south of the Sahara, which is up to 108,000km of road. The current epileptic services rendered by the countries rail line, only goes to show that road transport is still the fastest and most effective way to transport heavy goods from one point to another. More reasons why we need to understand how to start a logistics & haulage business in Nigeria.
Uber Doesn’t Own A Car
Uber doesn’t own a car and yet has discovered a niche and stayed true to that recognised advantage. This pattern has given them leverage over the opportunity that was begging for attention in that area. But many wonder how Uber became a household transport name by just being a platform. Because the truth is the company just creates an avenue for drivers to put their vehicles to work. Well, enough about Uber.
Before and after the pandemic, we would probably have seen individuals with their bikes and a box on the back end, driving around town. These service providers are known as dispatch riders. These riders create a bridge between businesses owners and their customers. Riders simply ensure that goods are quickly taken from point A to point B involving the buyer and seller as either sender/receiver. These logistics companies are like middlemen ensuring the quick & safe transport of products.
The Term “Haulage”
However, on a larger scale ‘Haulage’ practically means the same thing but is used with regard to bulk/heavy goods. Therefore, businesses involved in haulage mostly use trucks and big vehicles. Understanding ‘logistics and haulage’ is simply understanding the process of transporting goods/products. These basics are what you need to know to start a logistics & haulage business in Nigeria. Although some other complexities would be met on the way. But, nothing to worry about, I’m sure you are up to the task.
Start A Logistics & Haulage Business In Nigeria
Starting a logistics & haulage business is pretty much like starting any other business. Although, due to the fact that the business involves a lot of automobiles means they are start-up steps specifically required for this style of operation. And just like starting any business, one needs to understand the reason for their customer’s dependence on their services. I mean, companies are in business to serve customers and it is bad news if your customers don’t depend on your services. This brings us to our first & most important step:
1) Focus On A Niche In The Industry
This is where you decide what exact logistics and haulage service you would render. Some logistics companies focus majorly on exportation. While others operate within the shores of the country. In some cases you find a company just in the line with giving out their trucks/vehicles for hire-purchase. So what exactly do you want to do? An answer to this question may also be born out of a passion for the business. Your passion more than just keeps you in the business through adversities; it also puts you on a specific path for starters. Of course diversification is a must, but the first real question is, what kind of logistics business do you want to start? This helps you find your niche.
Money is a must for every business, especially a logistics and haulage business where vehicles are needed. The capital needed to start depends on the fleet you plan to own and where to call base. The successful execution of business ideas most likely depends on the level of cash involved. But what if that is wrong? We have now been exposed to a way businesses can run on another type of capital but not cash.
This is called social capital, and the value of your social capital depends on the level of influential people you know. For example, starting your business needs a warehouse worth 5million naira, which happens to be owned by someone you know. A case where the owner says you can start your business and pay partly is social capital.
The owner of the space knows you don’t possess such cash at that moment, but he trusts and understands you enough to let you pay back slowly. This capital is social intensive, and we need to now understand that relationships can start your business.
The point still remains that money is needed to execute ideas either gotten socially or otherwise. You might need a lot of it for a business like this. Look at a well-structured business plan for logistics & haulage businesses to have an idea about how much you might need.
This step is one that most businesses can afford to avoid even though it is important. A logistics & haulage business cannot afford to skip insuring its assets. Their vehicles make trips often & there is no telling how safe each journey would be. Anything is possible for expensive mechanized assets; accidents, raids, dishonest drivers, etc. It is safe to insure your assets just in case any of these happens. This ensures that the company can continue operations without needing to source for money to buy that asset again. The insurance company will then cover the expenses. It takes a lot of weight off of the logistics company. So get an insurance policy.
4) Mode Of Operation
One of the things to consider when starting a logistics business is working out how to handle payload and clients. This step needs you to gather a good set of individuals to make up your management team. The management team handles structuring the operations of the company from top level all the way down. The employees given this task need to understand the logistics industry enough to succeed at the job. They also need to have a good understanding of the accounting process. This may include software for the business to make operations easier.
The management also needs to organize day-to-day operations at the low level. A logistics company would majorly have driver-employees, so a roaster would be needed for each driver and every vehicle with a record of daily trips. A good mode of operation keeps things in full flow. This also involves your services to clients that should ensure the trucks are always on time and arrive safely. Thereby, beating off any competition that comes the company’s way.
A logistics company majorly employs drivers due to the nature of the job. This step is as important as the business itself. The human resource team or any manager involved in this process needs to be careful. One bad driver might just be a big problem for all. The company needs professional drivers with good behaviour. Some drivers have been found wanting, guilty of very dubious acts, and it just portrays the company in bad light. Marketing and administrative employees also pay vital roles in a logistics company. So an equal level of vigilant search should be applied here too. Employees are the backbone of any business, so we need to be sure whom we are employing.
Dealing with a lot of trucks and other forms of mechanized tools also means high level of maintenance is required. This means checking the trucks from time to time, employing a professional to handle the servicing of the machines. A little problem sometimes overlooked might come up to disorganize operations later. So trucks require a very high level of maintenance, which must be taken very seriously.
What businesses do you think were untouched during and after the pandemic? What businesses do you see more of now in 2021?
Without a doubt, the haulage and logistics business has always been a catch. It didn’t just spring up as an opportunity; it has always been in existence.
So these are the steps on how to start a logistics & haulage business in Nigeria. You are welcome.