Do you want to start a logistics company? If YES, here is a complete guide to starting a logistics company business with NO money and no experience.

Okay, so we have provided you an in-depth sample logistics company business plan template. We also took it further by analyzing and drafting a sample logistics company marketing plan backed up by actionable guerrilla marketing ideas for logistics companies. In this article, we will be considering all the requirements for starting a logistics company business. So put on your entrepreneurial hat and let’s proceed.

Why Start a Logistics Company?

An entrepreneur is basically someone who provides products or services in exchange for a fee. It means that if you want to venture into any business, it should be a business that is set to provide solution to people’s needs. It could be people in your immediate environment, your country or on a global platform.

For sure it is challenging to start any business, but one business that you can commence with little challenges is a freight packing and logistics services business. A freight packing and logistics services business is a business that provides consolidation of freight consignments, trade document preparation, packing, crating and otherwise preparing goods for transportation. With this type of business, you can choose to operate from any part of the country as long as there are businesses and people who will patronize your services.

The truth is that starting a freight packing and logistics services business is a profitable business and it is a very easy business to start even though it is capital intensive. Getting the right medium (motor cycles, drones, delivery vans and trucks et al) and good tracking devices are some of the secrets of running a successful freight packing and logistics services business.

So, if you are serious about starting your own freight packing and logistics services company, all you need do is to read this article and you will be well equipped.

Starting a Logistics Company – A Complete Guide

  • Industry Overview

The Freight Packaging and Logistics Services industry is an industry that is responsible for providing packing and crating services for the transportation sector of the economy. The industry comprises of companies that provide consolidation of freight consignments, trade document preparation, packing, crating and otherwise preparing goods for transportation and logistics consulting services.

Some of the key factors that will contribute to growth in this industry include growth in the manufacturing sector, consumption, international trade, and also increase in technology reliance will provide new opportunities for logistics consulting and advisory services, particularly for distribution chain networks and logistics. We are not ruling out the fact that technology can also cut some jobs in the industry.

The Freight Packing and Logistics Services Industry is indeed a very thriving industry in most countries of the world. It is a major sector of the economy of the United States and it generates a whooping sum of $2 billion annually from more than 6,414 registered and licensed freight packing and logistics services companies scattered all around the United States of America. The industry is responsible for the employment of well over 31,785 people. There is no establishment in this industry that has a dominant market share in the United States.

Research conducted by IBISWORLD shows that packing and crating services that are not directly related to motor vehicle operations account for an estimated 71.7 percent of the industry revenue. Packing and crating encompasses putting freight into various containers, including crates, pallets and plastic wraps.

Many companies also offer specialized services which include packaging unique products such as industrial equipment, artworks and weapon systems. Industry players may also offer freight consolidation. Consolidation refers to combining many frequent, small shipments destined for a similar geographical region into a single large shipment to reduce per-unit shipping costs. This service aims to capitalize on various freight-rate discount programs.

No doubt, starting and operating a freight packing and logistics services company can be capital intensive and challenging, but the truth is that it can be rewarding at the same time. One good thing about the industry is that it is open to both big time investors who have the capacity to start the business with over a dozen employees from a big office facility, and aspiring entrepreneurs who may want to start from a shared office space and a handful of employees.

The freight packing and logistics services industry will continue to blossom because people and organizations will always want to send goods, documents and parcels to different locations. Despite the fact that the industry seems over – saturated, there is still room big enough to accommodate aspiring entrepreneurs who intend opening their own freight packing and logistics services company.

Over and above, the freight packing and logistics services industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business. You can chose to start on a small scale in one or two public facilities, operating on a local and national level, or if you have the capital and business exposure, you can chose to start on a large scale with several outlets in key cities, delivering goods and packages on both national and international level.

Starting a Logistics Company – Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who require the services of freight packing and logistics services companies cut across individuals, households, corporate organizations, merchants, manufacturing companies and business owners cum entrepreneurs amongst others who need their consignments, goods, documents and parcel et al to be delivered to a recipient or a warehouse.

So, if you are looking towards defining the demographics for your freight packing and logistics services business, then you should make it all encompassing. It should include merchants and warehouse operators, retailers who would want to move their goods from one location to another, manufacturers, households who would want to move from one apartment to another, corporate organizations who would want to move from one office to another, government agencies who have cause to move goods and materials from one location to another location, churches and religious organizations that would want to move instruments and equipment et al from one location to another, non – profits and charity organizations that have cause to move goods and materials from one location to another within and outside the city you are operating in.

List of Niche ideas Within the Logistics Industry That You Can Specialize in

Most freight packing and logistics services companies tend to operate general services that involve all business activities that a standard freight packing and logistics services company is expected to offer. That is why it seem that there are no niche areas in the industry.

But on the other hand, some freight packing and logistics services companies may decide to major in some key areas such as;

  • Packing goods for transportation
  • Crating goods for transportation
  • Wrapping goods for transportation
  • Freight consolidation
  • Trade document preparation
  • Storing goods prior to and after freight
  • Physical distribution consulting
  • Logistics consulting
  • Packing services for motor carrier and storage services

The Level of Competition in the Freight Packing and Logistics Services Industry

The competition that exists in the freight packing and logistics services industry goes beyond competition amongst freight packing and logistics services companies within your location of operation. You are expected to compete with major players all across the globe that have a stake in the country you operate in.

For instance, DHL is in full operation in United States hence you are expected to compete with them. So, it will be right to say the competition in the freight packing and logistics services industry is tough.

The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure that you position your business properly, adopt safe and swift delivery process and you know how to attract and reach out to your target market.

But over and above, there are several small, medium and large scale freight packing and logistics services companies scattered all around the United States. So, if you choose to start your own freight packing and logistics services company in the United States, you will definitely meet stiff competitions amongst freight packing and logistics services companies within and outside your business location.

List of Well – Known Brands in the Logistics Industry

In every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.

These are some of the leading freight packing and logistics services companies in the United States of America and in the globe;

  • USA Logistics & Transportation Inc
  • US Logistics Inc
  • Dachser Transport of America
  • American Logistics International LLC
  • Ceva Logistics North America
  • Nissin International Transport USA
  • Scotlynn USA Division Inc.
  • Excel Logistics USA Inc
  • American Export Lines
  • USA InterCargo LLC
  • Senko USA Inc
  • Fyke Trading USA Inc
  • Tankstar USA Inc
  • Liberty Logistics USA
  • Sterling Logistics
  • Yusen Air & Sea Services USA
  • XPO Logistics
  • Yamato Transport USA
  • Castle Transportation
  • Transport Lac Express USA Inc.

Economic Analysis

If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.

The truth is that the freight packing and logistics services business is not a green business; as a matter of fact, you will come across several small, medium and large scale freight packing and logistics services companies all across major cities in the United States of America. So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of the required amount needed to purchase delivery bikes, drones, vans/trucks, renting of warehouse facility and also the running cost to successfully run the business.

Over and above, if you are considering starting a freight packing and logistics services business, then your concern should not be limited to the cost of purchasing delivery bikes, drones, vans / trucks, renting a warehouse facility, employing workers, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.

Starting Your Freight Packing and Logistics Services Business from Scratch vs Buying a Franchise

In the real sense of it, there is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.

If you are looking towards starting a freight packing and logistics services company, you would have to start from the very scratch because you can hardly get the franchise of a freight packing and logistics services company to buy, if you do, it will be way too expensive.

Besides, starting a freight packing and logistics services company from the scratch is less stressful when compared to other related businesses which usually require detailed groundwork and strict licensing requirements before launching the business.

With freight packing and logistics services company, you should just try as much as possible to secure delivery bikes, drones, vans/trucks, build business relationship with key stakeholders in several industries and then leverage on every marketing tool within your disposal especially the internet to market your services.

Please note that most of the big and successful freight packing and logistics services companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.

Possible Threats and Challenges You Will Face When Starting a Freight Packing and Logistics Services Company

If you decide to start your own freight packing and logistics services company today, one of the major challenges you are likely going to face is the presence of well – established freight packing and logistics services companies in your business location. The only way to avoid this challenge is to create your own market.

Some other challenges and threats that you are likely going to face is economic downturn; if the economy is in bad shape, businesses such as freight packing and logistics services companies and the likes usually struggle to maintain their old customers or even welcome new customers.

So also, unfavorable government policies can hamper the growth of your freight packing and logistics services company. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.

Starting a Logistics Company – Legal Matters

  • Best legal entity to use for this type of business

When considering starting a freight packing and logistics services company, the legal entity you choose will go a long way to determine how big the business can grow; some freight packing and logistics services companies design their business for neighborhood market, some for city wide market, while others for national and global market.

You have the option of either choosing a general partnership, limited liability Company, or a sole proprietorship for a freight packing and logistics services company. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale freight packing and logistics services company especially if you are just starting out with moderate start – up capital and operating in a small neighborhood, with one delivery van and less than a handful of employees.

But if your intention is to grow the business and carry out deliveries all across the United States of America and other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.

Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder’s meetings and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your freight packing and logistics services company; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.

If you take your time to critically study the various legal entities to use for your freight packing and logistics services company with the ability to sell franchise and deliver consignments, goods, parcels and documents et al all across the United States of America and other countries of the world, you will agree that limited liability company is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.

Catchy Business Name Ideas Suitable for a Freight Packing and Logistics Services Company

When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.

If you are considering starting your own freight packing and logistics services company, here are some catchy names that you can choose from;

  • Spencer JT® Freight Packaging & Logistics, Co.
  • Pelican Husky™ Freight Packaging & Logistics, LLC
  • Citywide® Freight Packaging & Logistics, Inc.
  • Alpha Greene® Freight Packaging & Logistics Company
  • Lester Mendez & Sons Freight Packaging & Logistics, Inc.
  • Harry Kester Brothers Freight Packaging & Logistics, Inc.
  • The Real People® Freight Packaging & Logistics, Inc.
  • Safe Hands® Freight Packaging & Logistics, LLC
  • Mike Nelson Group® Freight Packaging & Logistics, Inc.
  • Maryjane Roberts® Freight Packaging & Logistics Group

Insurance Policies

In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your freight packing and logistics services company.

Here are some of the basic insurance covers that you should consider purchasing if you want to start your own freight packing and logistics services company in the United States of America;

  • General insurance
  • Health insurance
  • Liability insurance
  • Risk Insurance
  • Credit insurance
  • Motor vehicle insurance (comprehensive insurance)
  • Deposit insurance
  • Workers compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
  • Payment protection insurance

Intellectual Property Protection/Trademark

If you are considering starting your own freight packing and logistics services company, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.

Is Professional Certification Needed to Run a Logistics Company?

Aside from the results you produce as it relates to swift and safe delivery of consignments, goods, documents and parcels et al for your clients, professional certification is one of the main reasons why some freight packing and logistics services companies stand out.

If you want to make an impact in the freight packing and logistics services industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in the competitive market.

These are some of the certifications you can work towards achieving if you want to run your own freight packing and logistics services company;

  • DAS Certification
  • Degree or Diploma in logistics and transportation related courses

Please note that you can successfully run a freight packing and logistics services company in the United States and in most countries of the world without necessarily acquiring professional certifications as long as you have adequate experience cum background in the freight packing and logistics services industry.

List of Legal Documents You Need to Run a Freight Packing and Logistics Services Company

The importance of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be long before the long arm of the law catches up with you.

These are some of the basic legal documents that you are expected to have in place if you want to legally run your own freight packing and logistics services company in the United States of America;

  • Certificate of Incorporation
  • Business License
  • Tax Payer’s ID/Tax Identification Number
  • Business Plan
  • Non – disclosure Agreement
  • Commercial Vehicle Operator’s Registration
  • Appropriate driver’s licenses for drivers (Commercial driver’s license (CDL)
  • Assistant’s license for assistants
  • Proof of ownership, proper identification and vehicle license
  • Copy of license for the service support facility (warehouse) and/or a recent inspection report
  • Employee Handbook
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use (if you also operate online)
  • Online Privacy Policy Document (basically for online payment portal)
  • Company Bylaws
  • Memorandum of Understanding (MoU)
  • Franchise or Trademark License (optional)

Financing Your Freight Packing and Logistics Services Business

Starting a freight packing and logistics services company can be cost effective especially if you choose to start on a small scale with just one delivery van operating within a community or city. Acquiring delivery van or bike or drone et al is part of what will consume a large chunk of your startup capital, but if you choose to start the business on a large scale with a standard warehouse facility, fleets of delivery vans/trucks, bikes and drones and even cargo planes, then you would need to go source for fund to finance the business because it is expensive to start a standard large scale freight packing and logistics services company with delivery networks spread across the United States of America and the world.

No doubt when it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.

Here are some of the options you can explore when sourcing for startup capital for your freight packing and logistics services company;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell of shares to interested investors
  • Applying for loan from your bank
  • Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
  • Source for soft loans from your family members and your friends

Choosing a Suitable Location for a Freight Packing and Logistics Services Company

Even though a freight packing and logistics services company can thrive in most locations, but when it comes to choosing a location for your freight packing and logistics services company, you should be guided by the demand for such services and the demographic composition of the location. Of course, if you are able to start your freight packing and logistics services company in the right location for such business, you won’t struggle to make headway in the business.

It cannot be overemphasized that the location you chose to start your freight packing and logistics services company is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and businesses with the required purchasing power and lifestyle. If you make the mistake of starting your freight packing and logistics services company in an area where you can hardly find access to good roads, a location that is hidden and difficult to locate, then you will struggle to grow the business.

Most importantly, before choosing a location for your freight packing and logistics services company, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out. This is why it is very important to gather as much facts and figures before choosing a location to set up your own freight packing and logistics services company.

These are some of the key factors that you should consider before choosing a location for your freight packing and logistics services company;

  • The demography of the location
  • The demand for freight packing and logistics services in the location
  • The purchasing power of the residents of the location
  • Accessibility and road network of the location
  • The number of freight packing and logistics services companies in the location
  • The local laws and regulations in the community
  • Traffic, parking and security

Starting a Logistics Company – Technical and Manpower Details

On the average, there are no special technologies or equipment needed to run this type of business except for customized logistic and deliver software, tracking device and software apps, Point of Sales (POS) Machines, and other relevant software applications. So also, you will definitely need distribution vans/trucks, bikes and drones, computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.

As regard leasing or outright purchase of a warehouse facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent / lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property.

When it comes to hiring employees for a standard freight packing and logistics services company, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Transport and Logistics Manager, Warehouse Manager, Sales and Marketing Officer, Dispatch Rides, Delivery Van Drivers, Accounting Clerk, and Cleaners. These are some of the key employees that you can work with. On the average, you will need a minimum of 5 to 10 key staff members to run a medium scale but standard freight packing and logistics services company.

The Business Services Process Involved in the Freight Packing and Logistics Services Company

When it comes to transporting, warehousing and delivery of consignments, goods, parcels and documents et al, there are no hard and fast rules about it. Basically, it is the duty of the marketing and sales team to help the organization source for clients.

They go out there to source for merchants, warehouse operators and retailers who would want to move their goods from one location to another, manufacturers, households who would want to move from one apartment to another, corporate organizations who would want to move from one office to another, government agencies who have cause to move goods and materials from one location to another, churches and religious organizations that would want to move instruments and equipment et al from one location to another, non – profit and charity organizations that have cause to move goods and materials from one location to another within and outside the city they are operating in.

Once a deal is sealed, the delivery drivers either load their vans/trucks or bikes directly from the client’s location or from their warehouse if the goods are brought to the warehouse and then the goods are delivered to the expected location. They either collect money on delivery from the receiver or they get paid by the sender. Usually there will be a business agreement with the sender or receiver as regards who will pay for the services.

It is worthy to mention that swiftness and safe delivery are very important in this industry hence the need for all freight packing and logistics services companies to install trackers on their delivery vans, bikes, and trucks et al and also leverage on reliable logistics and delivery software apps. This will enable them keep track of the goods, parcels and documents et al that are on transit and also give almost accurate timing of delivery.

It is important to state that a freight packing and logistics services company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated freight packing and logistics services company business process is not cast on stone.

Starting a Logistics Company – The Marketing Plan

  • Marketing ideas and strategies

Usually, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a freight packing and logistics services company, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands determining the market direction for the freight packing and logistics services industry.

These are some of the marketing ideas and strategies that you can adopt for your freight packing and logistics services company;

  • Introduce your freight packing and logistics services company by sending introductory letters alongside your brochure to individuals, households, corporate organizations, merchants, manufacturing companies and business owners cum entrepreneurs amongst others within and outside the city you are operating in
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs can know who to call when they need to deliver or transport consignments, goods, documents and parcels et al within your location
  • Create a basic website for your business so as to give your business an online presence
  • Directly market your services
  • Engage in road show in targeted communities from time to time to create awareness of your freight packing and logistics services company
  • Join local freight packing and logistics services company associations for industry trends and tips
  • Provide discount days for your customers
  • Advertise our business in community based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word of mouth marketing (referrals)

Strategies to Boost Your Logistics Company Brand Awareness and Create Your Corporate Identity

If your intention of starting a freight packing and logistics services company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.

No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your freight packing and logistics services company;

  • Place adverts on both print (newspapers and freight packing and logistics related magazines) and electronic media platforms
  • Sponsor relevant community based events
  • Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your freight packing and logistics services
  • Install your billboards on strategic locations all around your city or state
  • Engage in roadshows from time to time in targeted neighborhoods to create awareness of your freight packing and logistics services company
  • Distribute your fliers and handbills in target areas
  • Contact individuals, households, corporate organizations, merchants, manufacturing companies and business owners cum entrepreneurs amongst others within and outside the city you are operating in informing them about your business and the services you offer
  • List your freight packing and logistics services company in local directories
  • Advertise your freight packing and logistics services company in your official website and employ strategies that will help you pull traffic to the site
  • Position your Flexi Banners at strategic positions in the location where your freight packing and logistics services company is located
  • Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans, bikes and drones et al are branded with your company logo et al.

Establishing a Strong Delivery Network for your Logistics Company

In order to successfully run a freight packing and logistics services company, you must establish a good business relationship with shipping and manufacturing companies and of course organizations and businesses that are always transporting goods and consignments from one location to another. You would need steady contracts from these organizations and businesses in order to remain in business.

So also, if you are just starting out, you might not have the capacity to own a plane or fleet of delivery vans or even drones that will make your job easier. This is why you should look towards partnering with key stakeholders such as big – time logistics and transportation companies, and airline companies who have the capacity to deliver goods to any part of the world within the expected time frame.