A Complete Guide To Build A Transport Business From Scratch

Transportation is among the very few industries that are part of a multi-trillion dollar range. So, it is definitely a very promising industry to start your business in.

The transportation industry is the only one that is connected to every other business vertical and is the lifeblood of the global economy. When you think of the transportation industry, the most common thought that comes to mind are logistic trucks or perhaps commercial taxis, but the transport and logistics industry is a hundred times bigger than that.

Are you wondering how to start a transportation business? That’s the agenda of the day! Let’s figure out the perfect business plan to start a transport business that will guarantee success. You’ll need to consider all of the possibilities like finance, infrastructure, staffing, networking, etc.

Before we discuss the latest transport industry trends and the business plan to launch a transport business, you must look at the transport industry's current scenario.

Stats of the Transport Industry During Covid-19

• Transportation and warehousing market size in the US in 2019 will be $1.3 trillion, while the total logistics market size amounted to $6.1 trillion.
  
• Logistics/trucking has the largest (35%) share of the T&L market, while others like passenger ground (26%), shipping (17%), passenger air (14%), and rail (4%).
  
• Logistics firms are all out to break industry stereotypes and claim a lion share of the $4.6 trillion industry.
  
• U.S.' commercial transportation vertical is impacted significantly and is operating at an average of 85% of the standard rate.
  
• The trucking industry lost more than 88,000 jobs in the U.S. alone.
  
• A recent survey showed that due to Covid-19, nearly half of carriers (48%) have reported “significantly” decreased freight levels throughout the world.

With this blog, we will help you understand the transport industry's ins and outs, what are the latest technology trends of transportation industry, and how to start a transportation company of your own.

Before creating a business plan for your transport business, you must first choose the best transport business idea for your startup.

Best Transport Business Ideas to Choose in 2020

Transportation is a mode of commute from one place to another. Now, this commute could be of goods or people, and the various transport business ideas depend on this categorization. So, here are the best transport service ideas of 2020 that you can try as your new startup.

Cargo Transport Service

Cargo transport service is the backbone of the entire economy and modern-day business structure. From a small pin to the large blades of wind turbines, everything reaches from manufacturing plants to its rightful location due to the world's transportation services.

You can start a cargo transport as a contractor for eCommerce brands like Amazon and Flipkart, or offer services to enterprises of various sizes from small to large as per your scale of operations.

Dump Truck Service

Dump trucks are an essential transport service providing vertical that works in the commercial as well as industrial sectors. The choice of starting a dump truck business is yours, whether you plan for a local dump truck service for the residential area or offer heavy-duty dump truck service for industrial sites.

Shuttle Transport Service

Shuttle services are commercial transport services for people in which the vehicle’s route is fixed. These shuttle services could be offered by buses, vans, or even a fleet of cars. The vehicles will run the same route every day and serve the people that commute the said route.

On-Demand Taxi Service

Taxi service is the most common commercial transport service. Taxis are the highest mode of a daily commute across all the major cities in the world. With Covid-19, travelling via subway or buses is quite risky.

The better approach for people without their own vehicle is to book a taxi with apps like Uber or Grab. You can offer this on-demand taxi service with your mobile app.

Medical Transportation Service

Medical transport is a very lucrative business opportunity you could cash in on. You can offer an emergency medical transport service or a non-emergency medical transport service. It depends on the level of expertise and the infrastructure you can provide.

You can offer an on-demand private ambulance service or offer a simple medical supplies and organ transport service. The initial investment is high, but making suitable tie-ups with hospitals will help you even out and start making a profit very soon.

Livestock Transportation

Livestock transportation are easy money as a new transport business startup. This transportation startup idea requires minimal investment, while the profits are high. Livestock transportation typically includes the transfer of cattle, chicken, pigs, horses, etc. They are mostly transferred from one city to another.

Packers & Movers Service

The packers and movers services industry in the US alone crossed $26 billion in 2020. This particular transport business vertical has gained very significant momentum in recent years. As the packers and movers service provider, your goal is to give the best service to the customers during their transfer with their household or company goods.

The business of packaging and moving household or company goods from one place to another is worth pursuing. Just make sure that your service is impeccable, and the delivery time is quick.

Personal Trucking Service

People and businesses often need private trucking service; it could be for household needs or business opportunities. You can provide your trucking transport services to such customers and make good revenue out of it.

Vehicle Rental Service

Something more unique than all the other transportation business ideas mentioned here. Vehicle rental services is an alternate business model that goes different from the usual transportation business ideas.

Step-By-Step Guide of Transportation Business Plan

Before starting any business, you need to have a basic structure and plan ready. We will look into the step-by-step planning and execution to build your transport service company.

1. Research The Industry

Research is everything when you are starting your business journey. The deeper your research, the better your business plan. There are three stages to your research:

• A. Research the entire Industry and find the right transportation business idea for you.
  
• B. Research the scope and potential for a new startup in your particular transportation business vertical.
  
• C. Find the perfect team to build your transport business’ manual and digital side.

So, the first phase of research is about finding your particular niche in the transport industry. We have already talked about the best transport business ideas in the section above. Now you need to find which of those ideas is perfect for you. So, based on your capital, experience, and geographic location, which idea will bring you the maximum return on investment (RoI).

Now comes the second phase of research. Once you have decided which business idea is perfect for your transport company, you need to research how that particular vertical is doing in the geographical region that you plan to launch your transportation service. Learn about your competitors, where they are lacking, what more the customers from businesses in your vertical, etc.

The third phase of research is dedicated to finding the right resources for your transport company. Getting the resources will fall into two categories: (i) Getting offline resources and (ii) Getting online resources.

The offline resources are the ones that will help your business grow physically, like drivers, admin staff, CRMs, etc. while the online resources is the team of developers that will build your business’ digital side with website and transportation mobile app to reach your customers and run your business smoothly.

2. Choose The Type Of Transportation Business

Rather than step 2, it’s more like step 1-B. Recall the first phase of the research mentioned above, Choosing the right type of transportation business is the key to your business venture’s success. There are several kinds of transportation businesses out there for you to choose from to start.

The transport businesses can be broadly categorized into passenger transport and goods transport businesses. Several factors impact your decision to choose your transportation business vertical. Factors like:

• Whether you want to enter the Passenger Transport or Goods Transport vertical?
• What is your budget in terms of vehicle purchase and infrastructure?
• Which is the market you plan to operate in?

The key part of starting a transportation business that guarantees success is by making sure that it’s the most in-demand service in your target area.

3. Build An Entity For Your Transportation Business

The next step is to refine the details of your transport business. It’s time for you to choose what business entity you want to structure your transportation company and find your company's right name.

The business entity you choose to form might influence your company's name, so you might want to choose the entity first.

Your options for setting up business entities are:

• Sole Proprietorship: The sole proprietorship approach is perfect when you are planning to start a transport business on your own or with your spouse as a married couple. It’s the most common type of business entity in the U.S. Still, there is a drawback - sole proprietorship leaves you open to personal liability when it comes to debts and lawsuits. So, this might not be best for a transportation business.
  
  If you choose to open your transportation business as a sole proprietorship, your business's name can be your own name, such as Joe’s Transport, unless you file a DBA.

• Limited Liability Partnership: So, you didn’t like the above option, then Limited Liability Partnership is the better approach. This partnership is an entity that protects the partners involved from personal liability, debts, and obligations of the business. By choosing this partnership model, all the other partners are shielded from a single partner's business actions. The partners manage the business equally and take on those liabilities and obligations equally as well.

• Limited Liability Company: An LLC is a business entity where the owners aren’t personally liable for the business’s debts or obligations. They are a bit more flexible than the LLP option, and another plus point is that the LLC can choose to be taxed as a corporation or not.
  
  Once you choose your business entity, you should also select a name for your transportation business. This is the name of your business you will use when it operates. In most states, you can look up and see if the name you want for your business is available for you to use.
  
  You should check the Secretary of State’s office and the U.S. Patent & Trademark Office for the name registry. You’ll also want to see if the domain name for your desired business name is available before finalizing your business’ name.
  

4. Strategize According to Stats and Predictions

Strategy and planning is some of the more massive steps in this process. But that’s how you’ll get a clear vision of your new transport business. This is the step that comes after all the thinking is done, and before all the real work begins.

A lot goes into writing a business plan, a lot of the puzzle pieces surrounding how to start a transportation business. All the puzzles will fit in together, and it will be well worth once you’ve finished.

Make sure your transportation business plan includes:

• An overview of the business
• Market analysis
• Pricing plan
• Marketing plan
• Financial plan & projections

Considering all these factors in place, you can either develop your transportation business plan on your own or use a business plan template.

5. License & Permits

To begin a legal business, you need to register your business with the government. Even a small business like opening a boutique or a cafe needs quite a number of permits and licenses. So, it's clear that starting a transportation business will need a lot more business licenses and permits.

The U.S. Small Business Administration (SBA) has listed a whole set of state licenses and permits for new transport businesses. You have to check with your specific state and municipality to learn which ones you need. The registration requirements for starting a transportation business are highly dependent on the country your business will be operating in and its form of activities.

If you choose passenger transport instead of goods transport, you are taking responsibility for the people you commute. The regulations around passenger transportation can be more in-depth than they are for other good transport.

It is advisable to consult a lawyer or expert in your specific industry to follow all rules and regulations correctly.

6. Raise Funding If You Need

Starting a transportation business of your own is not a cheap venture. Based on the country, your level of operations, and the category of transport service you will offer - it could be a very costly affair. And, you might not have the entire capital to pull this business idea through.

Hence, you’ll likely need an investor or a loan creditor that can fill the gap in your financial needs. The majority chunk of your investment will be tied up in equipment, aka the transport vehicles. Although renting vehicles instead of buying could cut the cost, it will still be significant compared to other investments.

The cost of buying or renting a fleet of transport vehicles and building a transport service app and website are inevitable. You’ll have to shell out good money to start making money from your transport business idea.

There are plenty of financing options for small businesses. You might have a hard time finding the perfect kind of financial aid, but that doesn’t mean you shouldn’t try. There are several money lenders, financial institutes that give out loans, government and private grants, angel investors, crowdfunding, and business investors looking to partner up for a stake in your company.

7. Purchasing Automobile

Your transport business's success largely depends on choosing the right vehicles for your transport and logistics company. If your drivers have suitable vehicles for the job, your business will see efficiency and a good track record in service.

By choosing the right vehicle, we mean that you understand your business's needs and then purchase transport vehicles accordingly. For instance, you can’t purchase small vans to offer long haul service for huge cargo, or buy a huge truck only to deliver cargo within the city.

Here are a few vital factors to consider when purchasing your single or entire fleet of transport vehicles:

• What types of supplies will you be carrying?
• What volume of supplies will you be carrying?
• Which types of terrains you will be driving over?
• What scale of operation are you planning initially?

By establishing the kind of vehicles you need, you will have a clearer idea of how much finance is required to spend on automobile purchases and how much on the rest of your business. This clarity in information will help you structure your investment plan and your repayment plan more accurately. You will be able to budget your transport business’ finance accordingly.

8. Staffing Drivers, Workers, Admin Staff

Transportation companies need employees, maybe not right when you start but soon. If you’re planning on transporting anything on any sort of scale other than the short one-time trips which you can handle yourself, you’re probably going to need employees.

But, don’t rush into hiring if you don’t need any employees right away. Don’t hire drivers or office staff just because you think your business should be more than one person to look professional. When the time comes to hire employees, you’ll know.

(a) If you have to turn down work because you can’t do it all on your own;

(b) If you are never able to take a break from work;

(c) If you require someone with skills that you don’t already have;

If any or all three conditions are true for you, then you need to hire staff for your transportation business. You’ll have to find the right employees that fit right with your new transport business. Take some time to vet candidates and make sure they have the correct skills before offering them a position.

Make sure that your candidates have the right training with your type of vehicles and the precise licenses they need to work for your business. Also, check their references to ensure they’re reliable and good employees and will be a valuable addition to your transport company.

One important thing to remember is that when you hire someone as an employee of your company, you’ll also have to provide employee benefits and deal with payroll taxes. So, you must adjust your budget in advance to meet the salaries and other needs.

9. Digitization with Mobile Trucking Solution

The second biggest investment and productive decision you will take for your transportation business is to digitize your business with a mobile trucking solution. By developing a trucking app solution for your business, you can handle customers, drivers, and every other aspect of your business with a single dashboard from anywhere, any time.

You’ll get more customers as your service will be just a tap away from them, on their smartphone. You will also get a complete reading of your drivers, their trucks, and the cargo on your Admin Dashboard. Managing finance, budgeting, payrolls, taxes, etc. becomes a piece of cake with a digital trucking solution.

The best part of the deal is that if custom app development seems way too costly, you can always get a clone trucking app solution built at 1/10th the price and time of a custom app development approach. Whichever approach you choose, but developing a digital side of your transport business is like an unwritten rule to succeed in 2020.

10. Marketing Your Business & Services

In business, lesser quality service will be sold more if more people know about it, while the best quality service, if unknown to people, will not make any sales. So, besides being the best transportation service provider in the market, you need to also be the most popular transport service company in the market.

There are some old school marketing techniques like billboards, posters, pamphlets, giving ads in the local newspaper, registering to Yellow Pages, etc. You will be doing these in any case, so let’s talk about the newer and more exciting marketing channels.

Everyone is on their phone at all times, so you need to market your transportation business on their phones, precisely on the most-used apps. Social media apps like Instagram, SnapChat, Twitter, Facebook, and LinkedIn are the five most commonly used apps by almost all the generations of users that will come under your target audience.

In the year 2020 and beyond, we can guarantee that a small budget advertisement on these social media platforms will do you more good than paying a fortune on billboard ads. Still, to maximize your reach, you should find a balance between offline and online advertising for your transport service brand.

Latest Transport Industry Trends

You have attained the knowledge of how to start a transportation business of your own. Now, let’s talk about the best trucking industry trends that will help you in boosting your transport service business’ success.

Here are the 7 best transport industry trends:

Cloud-Based System Adoption (SaaS)

Software as a Solution (SaaS) is the easiest and best transportation tech trend that you can apply to your transport business in 2020. Cloud-based system adoption is one of the biggest transport industry trends for 2020.

The SaaS model offers a large scope of scalability and innovative digital resource usage in the transportation industry vertical. Accessibility is another significant benefit of the SaaS model. When several stakeholders in the business need to access various information about the business, the cloud-based SaaS model is perfect for accessibility.

The SaaS model makes your entire transport business available online, anywhere, any time. This transport tech trend allows your business to reach higher profitability and digital systems’ capabilities.

Electric Truck Fleets

Petrol & Diesel are getting outdated. If you plan to establish a transportation business for the long term, then getting an electric truck fleet is the best decision for your trucking company’s future.

The trucking fleet electrification is going to boom in probably the next five years. Many huge trucks manufacturers and transport industry giants are strategically planning large charging depots that can charge dozens or even more heavy-duty vehicles. The trend may seem far fetched, but it’s coming sooner than you think.

So, try to upgrade your fleet according to this trend and make it future proof.

Visibility and Anti-Theft GPS

Trucking is a risky business. There is always a threat of an accident or theft. To keep your business, inventory, and most importantly, your employees safe from such threats, digital visibility and GPS is the best option.

You don’t know where any of your trucks are at a given moment, and this thought can be scary. But that is the way of the trucking industry, right? Well! Not anymore.

Today almost all the major companies are across several business verticals like eCommerce, retail, transport & logistics, etc. are focusing on the increased visibility. Anti-Theft GPS is a means to receive near real-time locations for entire fleets and separate items in transit. This extra security protocols will help you avoid losses across the board.

Another benefit of the GPS feature is that the transport companies can give the parcels' real-time location to the customers. By increasing this visibility in transport, trucking services are giving a more personal feel to their customers.

IoT Devices

The Internet of Things (IoT) is probably the best transportation industry trend that you can apply this very year. The use of IoT sensors on your trucks will simplify a dozen of your troubles in handling business, maintaining assets, and tracking transports.

IoT technology can help you with several factors like:

• Determine the amount of space a particular cargo occupies
• The data can be used to calculate the shipment cost
• IoT devices identify pedestrians, cyclists, and any other road hazards
• Storing information into a blockchain-based system
• Helps bring enhanced security in the supply chain
• Reduce chances of fraud and bottlenecks and errors
• Drivers can monitor fuel performance, brakes, speed, etc. with IoT sensor
• Transport managers can view if packages or shipments are delivered on time

IoT will revolutionize transportation and significantly upgrade the way your transportation business will work in the future. The IoT ecosystem helps in bringing intelligence to transport companies and the optimization of asset utilization.

The Internet of Things is expected to transform the transport industry by collecting data and critical information from how these businesses work and show them how and where it can be improved.

Blockchain in Transportation & Logistics

Blockchain is everywhere. So, it is obvious to assume that the transportation and logistics industry will also want a piece of this magnificent tech trend. Blockchain is one of those transformative technology trends in transportation that will drastically reshape the industry for good.

B2B logistics are turning to blockchain technology to improve their visibility, traceability, enhanced security, and decentralized ledgers. With Blockchain technology, your business’ transportation location and conditions data can be stored securely over distributed and decentralized servers.

IoT will be a big game-changer in the future of the transportation industry, and IoT combined with Blockchain is the sweetest cake with a bright red cherry on top. Smart contracts are an enormous time and money savers that Blockchain brings to the table.

Since blockchain transactions are transparent, all the stakeholders involved in a transaction can be sure that the trucking business's information is trustworthy. The Blockchain technology will help you create and maintain transactions, track assets, chart the progress on every task assigned, and have an incorruptible record of your business.

Last-Mile Delivery

Another interesting transportation trend in 2020 is to offer address delivery or last-mile delivery. It means providing the delivery to the extend where you deliver the parcel to the end customer.

The infrastructure for such a transport service is different from the long haul transport business running across various states. The vehicles are different; the employees have different skills; the business needs different permits and licenses.

Delivery from the transport hub to the shipment’s final destination has become one of the major focus points for logistics companies as more and more people head online to buy their goods. The growth of E-commerce businesses leads to rising demand for address deliveries.

It is the last step in the supply chain but likely the most important: last-mile delivery. There are many ways to offer last-mile delivery from a delivery guy on a bike to ultra-modern drone delivery. You can run both parts of this transportation business by having a large fleet of long haul trucks for inter-state transport and a fleet of small vehicles to offer intra-city transport.

AI & Big Data

Data is everything when it comes to the future of any business. Not just transportation but any business in 2020 and beyond will depend highly on data. It’ll be the primary driver of innovation in the transportation industry trends.

Logistics and transportation companies are already integrating machine learning algorithms. They have started using big data in their systems to upgrade routes and improve planning, manage logistics, and even predict demand in specific markets.

There will be innovations with digital twin technology when a physical entity's digital replica is created to be analyzed. It means that there will be simulations using which you can see how certain decisions will impact your business in the long run.

Advantages of AI & Big Data:

• Financial Business Forecasts
• Vehicle Diagnostics
• Social Media Data
• Driving Patterns
• Real-Time Location Data
• Web-Site Browsing
• Improves Operations
• Traffic and Weather Data Forecast Systems from Sensors
• Routing with Sensor Driven Data
• Physical Internet-based Intelligence

So, these were the most popular 7 transportation industry trends of 2020 and beyond. Now it’s time to look at the impacts that COVID-19 had on the way the transportation industry is working and planning to work in the near future.

What Are Some Changing Transportation Scenarios To Expect Post-Covid?

Covid-19 is a big hit, especially on the economy and the drastic lifestyle changes following this pandemic. We are still fighting against this virus, but the future ways of doing business and living our lives are getting clearer.

Here are some of the big changes that transportation and work scenarios will face in the near future.

The majority of the people are following the work from home culture, keeping the streets somewhat empty and the traffic low. Many of these employees will get back to their usual way of working soon, but a few will choose the work from home model for a long time as many companies a saving big by not providing infrastructure.

For the people who have already begun going back to their workplaces, personal transportation is witnessing higher growth than public transport as people feel safer and protected in their personal vehicles. So, more people are opting to purchase cars for themselves and their families.

The carpooling culture was getting popular among people to save the environment and reduce carbon emissions, but this carpooling culture will go down for now. People will prefer personal transport than carpooling with their friends or colleagues.

Ride-hailing services will be on the rise for people who can not afford to buy their own car. On-Demand taxi services like Uber, Grab, Ola, etc. will be seeing a surge in passengers if they provide a sanitized and safe travel environment.

There will be a boost in Micro-Mobility Services for people who can’t afford taxi services or personal cars. These are micro vehicles for 1-2 people, which you can buy or rent on a monthly basis. The vehicles coming under the micro-mobility class are scooters, e-Bikes, 2-seater cars, etc.

The turn from global stores and malls to e-commerce will accelerate, as more people prefer home delivery on all the items. This requirement from the users has also boosted the importance of last-mile delivery networks for transport services partnered with eCommerce brands. 

Trucking fleets are prioritizing goods based on perishable and non-perishable goods. So, the higher transport priority will be given to the goods that have an expiry date or valued more in recent times.

The transport companies will take extra efforts to sanitize their transport vehicles, their staff, and the products being dispatched, stored, and transported from one place to another. This way, the companies will ensure the safety of their employees and their customers.

Conclusion

It takes a lot of courage, capital, and planning to start a transport business of your own, especially in COVID-19 pandemic times. This virus will stay with us for some time, and there is no guarantee that such an incident will not happen in the future.

So, whether you launch your transportation business in 2020 or 2025, you need to take into account all of these factors and follow the business plan that we discussed in this blog. Remember that a transport company’s real strength is not in its vehicle fleet or the amount of money it makes, but the business strategy and the team that fulfills it.

Hence, your goal is to create a foolproof transportation business plan and find the perfect team to execute it.