LadyEllen
Posts: 10931
Joined: 6/30/2006
From: Stourport-England
Status: offline
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Hi All
Following my post on another thread regarding the possibility to operate a freight business from home - a post that got me so many personal replies I thought it best to start a thread on it! The business is freight forwarding - it requires no owned vehicles, drivers, depot etc like a haulier, but is capable of generating a good income with little investment.
Basically, one can work from home in the freight industry as a freight forwarding agent, introducing haulage companies to shippers and vice versa. You quote a shipper as if you were the haulier for their requirement - you then make use of empty vehicles which hauliers have in the area where the shipment is to be loaded and which the haulier needs to load back to their home, to source the transport service at a cost lower than the price you quoted the client - your income is the difference between these two figures. It works the other way around too - a haulier announces an empty vehicle for which he has no reload home - you sell that capacity to a shipper.
In the UK, we have no requirement for any licensing etc for such an activity - but US viewers might need to check on local requirements. After that, you will need a PC, printer/scanner/copier, phone and fax - and a mobile phone as this business is 24/7 and clients and hauliers may need to contact you out of hours in emergency. You will also need to obtain goods in transit insurance just in case of theft, loss or damage en route - however, a freight forwarder cover is usually cheaper than that for a haulier as your insurers will pass claims on to the haulier's insurers.
Other stuff you will need - a database of shippers and hauliers to make a relationship with for future deals. In the past this required significant experience in the industry to build - but nowadays there are internet "freight exchanges" (google that to find them) to which hauliers subscribe to get backloads. This gives you instant access to thousands of hauliers who will have posted their empty vehicles for other users to offer loads for. The beauty of it is, that hauliers on the freight exchanges can also be your clients - so you contract to make the transport with one haulier as if he were a shipper and then purchase the service from another haulier at a profit for yourself. Even so, its vital to get some direct relations with proper shippers too - they generally pay more giving you the chance of a higher profit. Repeat business is also likely in this industry, so always ensure you keep client and haulier away from one another or you will be cut out from future deals.
Trading conditions in Europe are standardised in each country for domestic transports and across Europe for international transports (CMR). Check this on the web or with local authorities / trade associations in the US.
Terms of payment - you will be responsible for paying the hauliers, but also responsible for invoicing your clients. Sums will easily run into thousands of your currency each month. Where possible, make sure you pay your hauliers later than your clients will pay you, to create positive cashflow - or at worst pay out and get money in at the same time - otherwise you will be in the embarassing position of not being able to pay your hauliers, and find your service cut off!
Profits - in the UK and Europe, average profits are around 10-20% of sales revenues (dont know about the US). From these profits you will have to pay your salary and operating costs (phone etc).
ESSENTIAL - this is advice based on my personal experience only. Always take suitable advice when considering starting a business and always make sure your business plan and cashflow stand up to scrutiny. Always ensure that you are able to fully commit to any self employment to the extent required for success.
Legal ; Neither I nor any of my companies or commercial operations will accept any responsibility or liability for loss, costs, damages, claims or charges incurred by anyone or by a third party as a result of using any of my advice, and by using my advice in any way you agree to indemnify and hold harmless me personally and my companies and commercial operations fully for any and all such losses, costs, damages, claims or charges that may be attempted to be recovered from me by you or any third party as a result of your reliance on my advice.
Sorry for that last bit people, a bit unfriendly I know - but I'm not willing to be sued over this information!
E
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