Haulage which is also referred to as trucking business involves the transfer of products from one physical location to another. Haulage companies help to carry out this task and then charge for the distance/number of kilometers covered during the trip to deliver the goods. Haulage business begins with loading of goods onto the truck and then ends with safe delivery of those goods to an agreed destination.
NOTE-: This article is culled from: “The Complete Guide to Starting a Trucking Company from Scratch.”
Haulage is not a new business, it is a business that has been around from the beginning of time; with our fore-fathers making use of camels and carts for their own haulage business. However, industrialization over the years has changed the face of haulage business.
The manufacturing industry for instance, is quite different from what it used to be; a lot more goods are being produced these days and both raw materials and finished goods have to be conveyed to appropriate destinations. Another factor which contributes to the growth of haulage business especially in Africa is the bad road networks and the absence of a good railway system.
In Nigeria for instance, it would have been very easy and affordable for people to transport goods if the railway system was very effective but sadly, this is not the case. The rather skeletal railway services offer little assurance or benefits to the average businessman.
Well, that’s bad news for businessmen but interesting news for haulage contractors who make tons of money every year just from filling this huge gap. Haulage companies help with transporting several finished products, raw materials and liquids which include but are not limited to the following-:
- Consumable goods like food and drinks.
- Manufactured goods from manufacturer to point of sale or distribution.
- Construction materials such as cement, corrugated iron sheets, irons, woods and other kinds of materials used for construction.
- Materials from quarry sites like stones and sands.
- Electronics and electrical components.
- Imported goods and containers from airport/seaport to its final destination.
- Petroleum products.
This is just a short list to give you an idea of some of the goods which are transported by haulage companies because there is an exhaustive list of products that are regularly conveyed using haulage trucks. There are different types of trucks used for haulage business and a few of them include-:
3 Types of Haulage Trucks
- Cranes-: These are used for picking up and conveyance of heavy duty equipment like shipping containers, earth-moving equipment, transformers, communication equipment and generators amongst others. There are different types of cranes with different capacities and specifications as well as different tonnage capacities.
- Tankers, Trailers and Trucks-: While tankers are used for conveying oil and gas products, trailers and trucks are used to transport different kinds of goods such as agricultural products, manufactured goods, raw materials and a lot more.
- Tippers-: These are strictly used in the construction industry for conveying sand, stones, building materials and crushed materials from the quarry.
You can buy any of these trucks but before you buy, you would do well to carry out an extensive research on the category of haulage business you want to do and then determine the type of truck that would be needed for that kind of business. There are different ways to make money from haulage business but we would only discuss the three most common methods with emphasis on the last one.
How to Make Money Leasing Trucks on Contract to Haulage Companies
1. Independent Operation-: Under this Business model, your haulage business would be owned and operated by you. You would purchase your truck, manage it, look for your own contracts and business connections repair your vehicle when faulty and in some cases, drive the vehicle yourself.
2. Sub-Contractor/Contractor-: This involves placing your own vehicle under a manufacturing company to be used and managed by them. A lot of manufacturing companies have large customer base spread across different locations and it would really cost a lot to purchase different trucks for this. So, what they do is to look for contractors who would buy vehicles and place it with the company to use and manage it and at the end of the day, pay an agreed sum as compensation.
3. Leasing-: The third way is by leasing out your trucks to haulage companies. It is almost the same as being a sub-contractor only that this time; you would be dealing with haulage companies and not with companies or multinationals directly. To make money from leasing your trucks to haulage companies, you would have to follow these steps-:
- Seek out reputable haulage companies interested in leasing your type of vehicle.
- Find out their mode of operation, terms and conditions of the contract as well as mode and amount of payment.
- Engage the services of a legal practitioner to help you draft an agreement which would be signed by both parties.
- Understand the haulage company’s terms and conditions thoroughly.
- Release your vehicle to the haulage company.
- Receive your paycheck monthly.
It’s really that easy but where it gets challenging is the aspect of finding the right haulage companies to work with. You have to be careful at this stage to ensure that you are working with a reliable company that can always be trusted to fulfill its own end of the bargain.
Adopting this model in haulage business is very good because you don’t have to worry about managing or running the business yourself. All you do is collect your paycheck at the end of the month. You can even run this business alongside other businesses or as an extra source of income to supplement your paid employment.
You wouldn’t have to worry about repairing the vehicle, monitoring the drivers or even searching for contracts; everything would be worked out and handled for you. All you need to do is show up for your check at an agreed period but I must stress again that you need to carefully choose a haulage company to work with in order to avoid ‘stories that touch’.