Hey! Are you planning to start a shipping business? If so, do you have any ideas on how to start a shipping business?
Well, the shipping business is a great business idea that is here to stay and starting your company is a great idea. Currently, the need for shipping companies is on a constant rise thanks to the growing number of businesses importing and exporting goods. This is why the shipping business is one of the fastest-growing businesses in the world.
However, there are several essential things that you need to consider when starting a shipping business to make it a successful business. These things range from as simple as cargo handling to more complicated stuff like insurance and legal issues that surrounds the entire shipping process. Therefore, it is fundamentally crucial to be aware of these key facets to be able to start and operate your shipping company with less frictions and risks.
Here are 5 things to consider when starting a shipping business:
Tips on how to start a shipping company
Market Research & Choosing Strategy
To simply start offering shipping services, you will need to do deep market research and pick an ideal strategy for your business. Creating a conclusive market research report will help you study the area demographics, competitors and other relevant information. This information is essential since it will help you determine the viability of starting a shipping business in your chosen location.
This venture requires a perfect business strategy to be applied, and this will define or be defined by factors such as shipping methods, financial capacity, and so much more. Choosing your strategy also means choosing a way to start a shipping business. These ways include:
- Starting a whole new shipping company,
- Purchasing an already existing shipping company, or
- Buying a franchise that owns several shipping companies.
Buying is primarily ideal when you want to save the initial startup costs and avoid extra hustles associated with starting a new shipping business. On the other, market research is the essential part since it helps you determine:
- If there are customers with real shipping problems
- Whether the existing market opportunity is large and growing
- If your solution is different and ideal to meet the desired requirements.
- What are you shipping, and which mode of transport is best?
Create a Superior Business Plan
Starting a shipping company is a relatively complicated process that requires several sophisticated steps to be undertaken. One of these steps is creating a strong business plan which will act as the core of your entire business blueprint. The fact is, you can’t just start a shipping business without a specified and reliable funding source.
Therefore, by creating a business plan, you will be able to define facts like funding sources and strategies to be depended on. Additionally, a business plan will also define your Target market, financial plans, prices, costs, skills, selling propositions, etc.
A business plan will help convince potential investors to invest in your shipping business idea.
For this part, we will highlight and discuss two main facets: insurance and legalities.
- Insurance: Insurance is, of course, part and parcel of almost every business, whether they are big or small business administrations. Insurance ensures that you are fully covered against all losses, and it can also cover both your cargo and your customer as well.
- Legalities: To ensure you don’t face any legal obstacles, you should, therefore, ensure your company is fully authorized to operate a shipping business. And so, you must ensure all legal requirements are met before starting your operation. Legal aspects are crucial, and all documents related to shipping business applications should be there to avoid finding yourself in serious trouble. The 28 U.S.C 1333 code is ideally one of the topmost essential laws that you should be aware of.
In the U.S, there are laws for shipping in U.S. Waters that you should be aware of for the Domestic shipping business. For example, Jones Act Public Law 66-621(1920) mandates “maritime shipping between U.S. ports to be transported on the U.S. owned and crewed vessels. Currently codified at 46 USC 55102(b) in United States Code.”
Additionally, securing contacts with clients is another crucial part that may involve several legal aspects that you will probably need a lawyer for. In fact, contracts involve insurance and legalities that comprise legal details and essentials for a successful business.
What’s Your Niche?
Before starting any business, defining yourself is very important for people to clearly know what you are. This means defining the shipping options that you are offering. Here are three main examples of shipping options that you can work with:
- Dropship distribution: This is a delivery business that involves delivering products to customers without buying or owning those products. In this business model, you specialize in clients’ order fulfillment services, making you channel between the seller/manufacturer and buyer.
- Freight Forwarding: For this shipping business model, an intermediary between the shipper and the trucking company is, in fact, a freight forwarder. As a freight forwarder, you will be handling all logistics after receiving a shipment. Basically, freight forwarding involves moving goods from one place to another.
- Logistic service: This is the delivery of goods from one point to another using a truck, and it is an ideal service for providing fast delivery. This is also a shipping model that is suits goods that require special handling.
Delivering goods to any place within a limited time has become a norm nowadays. Therefore, determining your delivery speed should also be an essential consideration if you are planning to start a shipping business.
Coming up with a proposed time in which your company can deliver goods will help you determine possible shipping challenges that you may face. And through this, you will be able to optimize your current strategy and develop ideal solutions to those challenges.
To conclude, these 5 key factors are not the only essential factors; instead, they are the most important things to consider. Starting a shipping business will require you to consider not only the above factors but also other things like; Price of service, staff, selecting an office location, marketing, startup cost, etc.
To make it successful, be sure to consider all these things.