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How to start Successful Haulage Business in Nigeria

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Eno Johnson
Eno Johnson is my name, I am an entrepreneur in the making. This blog was birthed because I needed a platform to pen my experience down in Agriculture and business.

Haulage business is under transportation sector. More than 200 million Nigerians move from one point to another either within same village, city, state or interstate. Transport business is the third most lucrative business in Nigeria after Agriculture and Health. Haulage is the movement of goods or people, mostly goods from one place to another. We move house luggage, foodstuff, animal, petroleum products, flour, cement, sugar, building materials etc. Haulage business is broad, you have to be sure of the one you are going into, it will help you identify the kind of challenges you have to overcome.

Nigeria is only beginning to have a functional rail system that can cargo goods, there is still huge gap in this sector. Road haulage and transport business will remain the most favoured means of haulage for a long time. That means there is enough money to make from this business. Haulage business in Nigeria has more advantages than disadvantages. Just like any other business, it is not without any ups and down, in fact if you don’t have strong mind don’t venture into this business otherwise look for a company to manage it for you.

To avoid break down of vehicle go for new or fairly use that is sound and durable. Have a standby mechanic and operational manager.

There are different ways to go into this business. You can drive the vehicle yourself, lease or contracted etc.

You can haulage for major oil companies like; Oando, Con oil, Total or telecom industries such as; MTN, Airtel, 9Mobile etc. Note that all these companies have stringent entry procedure and requirement. The telecom companies pay per tonne of materials moved, they have a chart book were you can calculate the tonnes of material moved with distance to ascertain the amount you will collect.

Steps to start Logistics and Haulage Business

  • choose the kind of haulage business to operate
  • source for capital
  • purchase the kind of vehicle peculiar to your haulage business
  • Register your business with CAC
  • Contract your vehicle, lease or drive it yourself
  • insure your vehicles
  • identify the challenges peculiar to your haulage
  • obtain the necessary papers
  • write a business plan

Choose the kind of Haulage Business to Operate

There are various vehicle to use for your transport logistics business depending on the items you want to haulage

  • Lorries
  • Tipper
  • Trailers
  • tankers
  • van
  • buses
  • 911 trucks

They all perform different haulage for instance truck carry items like; foodstuff; yam, onions, palm oil, garden egg, pepper. The type of haulage will inform the kind of vehicle to purchase. If you want to be carrying oil and gas you have to go for tanker and if sand you go for tipper.

Capital

The capital to start haulage business depends on the type of logistics you are aiming at. The number of vehicle is also a factor to be considered. The amount to start haulage business is between 3.5 million to 30 million that is between fairly use and new vehicle. Fairly used van can be 3.5 million, fairly used truck 6m etc but a new truck will cost about 20 million depending on the brand.

You need money to acquire space you will park the vehicles, rent or get an office for administrative purposes.

Purchase Vehicle

It is very important for you to find out the type of truck or vehicle that is suitable for the route you will be plying and the kind of haulage business you are embarking on. Don;t start making inquiry after purchasing the vehicles because it will be a bad start. Purchase the appropriate spec of the truck for your business. When you overload your truck you are likely to kill the engine, a truck with 350 horse power, single axles should load not more than 25 tons. But double/tandem can load above 25 tons. American trucks are preferable. You can go for sound fairly use or tear rubber vehicle.

  • Mack truck
  • Man diesel 10 tires
  • Howo dump truck Ford
  • Daf 85
  • Forty feet flat bed
  • IVECO trailer
  • Scania flat bed
  • Mercedez benz sprinter cooling van

These two specs below are something to watch out for because someone with experience says they can ground haulage business.

  • Freightliners and
  • scania

Ensure you buy new tires and note the expiry date in case you are replacing tires. Avoid trucks that use Rotor engine and filters

haulage business in Nigeria
image nairaland.com

Register with CAC

It is wisdom to register your business name with CAC in other to give credence to what you are doing. Chose an appealing name such as HaulWell Logistics, RightHaul Logistics etc.

Different ways to run Haulage Business

Independent Haulage Owner

You can buy your vehicle and drive it yourself. This is the most lucrative method because you will manage your business very well. Since it is your business you wouldn’t want to carry overload and weigh the vehicle down. Short change or the story of this one spoil today another one tomorrow won’t be there.
Another way is to employ a driver/s to drive your truck, you can be the one sourcing for clients while you pay the driver and motto boy for their services.

Also, you can put your truck, tanker, tipper, lorry, van etc. on  hire purchase. Triple the amount used in purchasing your vehicle and agree on payment days. It can be weekly or monthly but he should deposit 10% of the money before release.

Contract your Haulage Business

This method is directional, you can be contracted by oil and gas company, food and agricultural company, manufacturing companies etc. Your own is just to be receiving money at the end of every week or month depending on the agreement. The vehicle maintenance will be done by the company, they also take care of the driver’s allowance.

Leasing of haulage vehicle

This method is good if you have many vehicles. You have to get a space to display your trucks, lorry etc. Different contractors such as; those carrying chippings, stones, cement, wood etc will make use of your vehicle for a fee. It is usually a daily thing after use, they return them back.

Some haulage owners charge drivers outrageous amount  for daily or weekly returns. The driver in trying to meet up with the lease will take up any job without considering the negative impact it will have on the vehicle. He will work for the owner’s charge and probably times of his own thereby reduce the long time value of the vehicle.

You can give your haulage business to a manager, who will give it to the driver at a reasonable price, he will be the one monitoring and checking the vehicle. He will effectively work out the lease payment, pay the driver and also make something for himself. The manager will ensure everything is working well because any loss opportunity is also a loss to him. And you will be sure the issue of overload and stressing the vehicle through bad terrain will not be there.

Register with a Marketer

Purchase haulage vehicle and give them to a haulage company to use for logistics then pay you agreed amount. Some haulage company will pay you 300k-450k monthly depending on the vehicle capacity and the route being plied.

Employ Drivers

Install trackers on your truck to monitor the speed, driving habits and location of your trucks. Your drivers should bring two guarantors that are government workers or those working in a reputable organization.
Apart from the agreed amount for wages always give allowance no matter how small on every trip made.

Obtain the necessary papers

To operate haulage business you have to get the necessary papers from government to do this go to ministry of transport for the okay papers. Buy emblems from local governments, pay road allowance, make arrangement with a filling station for diesel supply

Secure your Haulage Business

It is very important for you to protect your transport and haulage business by insuring your business. Get insurance from a reliable and reputable company. In case of any eventually you know you can always bounce back. It will be a costly mistake if you don’t insure your vehicles.

Feasibility study on haulage

It is necessary to carry out feasibility study on haulage business in other to know what’s involved. Another thing to do is to write out haulage business plan or proposal to help you run the business successfully.

haulage business, logistics business
image nairaland.com

Challenges of Haulage Business in Nigeria

Bad Roads

Many Nigerian roads are very bad and it affect the haulage business. Continuous use of these bad roads wear and tear the vehicles down. Sometimes accidents occur here and there making the owner to spend more on maintenance and damages in terms of accident.

Drivers

Getting an honest driver that can be trusted is an uphill task, some drivers always bring one excuse or the other thereby slowing down your business.

Mechanic

Apart from driver, getting a reliable mechanic is another challenge. You lose so much money anytime your car breaks down and because some drivers know what this mean to you, he will want to take advantage of the situation to make money. Truck most times don’t break down close to mechanic shops as such before mechanic could come for repairs time would have lost. When you grease your truck regularly especially for every 5000-7000 miles you will reduce the risk of breakdown.

How Profitable is Haulage Business? .

Logistics business generally is very profitable,  since it is broad, i will like to pick on only one from the whole lot. Assuming you transport yam with your truck from Benue State to Lagos and you charge #200,000 after deducting expenses which may be #50,000. You will be left with #150,000. If you do this 3 times a week that means #450,000. This is how profitable haulage business is in Nigeria. Truck owner income in Nigeria

Conclusion

As a nation we do more importation than exportation you are sure of constant jobs if you apply creative marketing skills.

Handle all financial transactions such as; repairs, fueling, clients, buying of parts etc. Pay the driver well and dictate where and what the vehicle does. Install tracker on your truck it will help you manage your haulage business effectively. When you are given any job, consider the effect or impact it will have on your vehicle, make sure you don’t overload.

Breweries, cement, FMCG manufacturing companies are using flat bed to move their goods from factory to their rented warehouse, you can do business with them.

The returns you will make depends on what your truck will be doing. Haulage business is broad and each has its own peculiar challenges, you can learn the business before starting or Employ somebody who know much about the business as a manager

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