An aura of super-profitable business has developed around cargo transportation, although this is far from reality. A number of beginning entrepreneurs believe that once they buy a truck, they will simply need to count the money from the profits. In reality, finding clients, especially regular ones, turns out to be an impossible task for many. This is because competition in the trucking market is much higher than in many other areas of business. In addition, vehicles need refueling and break down periodically, and their repair is expensive. Professional cargo transportation in Ukraine and on international routes require modern transport and proper organization of logistics with the provision of a range of related services.
Just a couple of decades ago, the Ukrainian cargo transportation market was chaotic. This area was shared by many small entrepreneurs. Today, the most profitable areas are firmly occupied by large companies operating throughout the country and abroad. At the same time, it is wrong to believe that cargo transportation is not very profitable. You just need to choose the right market segment, taking into account the characteristics of a particular city or region.
Among the “small” players, the winners are those who do not try to cover the entire market at once, but find a narrow niche and bring the quality of services to perfection. This could be house moves, delivery of building materials, food by refrigerated truck, and so on. You need to spend a little time, analyze the market and offers from potential competitors, identifying their weaknesses.
The approach to doing business should be as thoughtful as possible. Before you begin the practical implementation of your idea, you need to draw up a business plan in which you try to take into account all the nuances.
You should not try to calculate the profit from cargo transportation by simply multiplying prices by the number of orders. After all, there are many different factors that also need to be taken into account. The main ones are:
- planned and routine maintenance of transport;
- wages of drivers and staff;
- Fuel and lubricants (fuels and lubricants), consumables;
- rent of office, garages, etc.
Naturally, the most important thing is the transport itself. The more modern it is, the more potential customers with fewer breakdowns. Therefore, to purchase equipment, many entrepreneurs take out bank loans or use the services of leasing companies. What is required is “promotion” of the business - an advertising campaign on the Internet and the media. The ideal quality of the services provided is also necessary, then word of mouth will work.
Cargo transportation: main types
Freight transportation refers to the movement of cargo from customer to customer (these may be different branches of the same company), carried out by one or more modes of transport. Depending on this, the following types of cargo transportation are distinguished:
- aquatic (river, sea).
Each transportation method has certain advantages and disadvantages that affect pricing.
✓ Cargo transportation by road
They are universal, allowing cargo to be delivered to places where there is no railway or over short distances if there is one. In addition, road transport is indispensable for the delivery of goods within the region. In large companies, the vehicle fleet includes both small vans and long trucks, tractors, and refrigerators. A separate line is the delivery of oversized and dangerous goods.
The disadvantage of transporting goods by road is their price, which is higher than by rail, especially for large volumes.
✓ Rail transportation
The advantage is the ability to carry out mass transportation of goods in large volumes and, relatively inexpensively. The development of railway networks makes it possible to deliver goods almost everywhere.
The disadvantages of rail transportation are the monopoly position of one company, the high probability of damage to the cargo being transported, and an outdated fleet of wagons.
✓ Transportation by water transport
The cheapest option for delivering goods is river and sea vessels. The disadvantages are the dependence on geographical as well as climatic conditions. In addition, this type of transportation takes a long time. River transport is mainly used for seasonal transportation of oversized cargo, equipment, bulk materials within Ukraine and grain to seaports.
✓ Air transportation
The fastest way to deliver cargo anywhere in the country or the world. But, for such advantages, the customer has to pay dearly, since the cost of air transportation is much higher than that of other types.
Often, to deliver goods to their destination, it is necessary to use several different vehicles. Such transportation is called combined or, more correctly, multimodal. In addition to types of transport, cargo transportation is also distinguished by directions. So, there are domestic and international transportation. A number of transport companies operate only within one region.
Forwarder or carrier. Whom to choose?
A freight forwarder is a company that undertakes the organization of door-to-door transportation of goods. The client indicates which product and in what quantity needs to be delivered from point “A” to point “B”. The forwarder builds a logistics chain taking into account the necessary transport. Concludes an agreement on his own behalf, but at the expense of the client, etc.
The carrier company organizes the transportation of cargo exclusively on its own. Therefore, its transport must comply not only with the domestic rules of the country, but also with international ones, if necessary.
There are also hybrid companies that act as carriers, and in some cases, forwarders. Usually these are companies with a not too large and modern vehicle fleet. It may be in short supply or not suitable for international shipping. Everything related to international transportation is highly regulated by rules and legal requirements. They need to be known and taken into account at the stage of placing an order - after all, any mistake threatens large financial losses. Accordingly, the more intermediaries, the higher the risks.
The issue of cost is not as obvious as it might seem at first glance. For a carrier, regularity of orders is much more important. Therefore, if you contact him directly, the cost of one-time cargo transportation will be higher than that of a forwarder.
Large companies, including Grand Logistics Company, have their own network of offices and warehouses. It provides a full range of services, including preparation of accompanying documentation for goods.
The carrier bears a great responsibility. These are both direct costs (fuel, road payments, etc.) and indirect costs (depreciation, license fees, office rent). All this forces companies to work with extreme precision and adapt to their customers.