How To Start Logistics Business In Lagos by Ayodeji Jemilugba

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trucksAyodeji Jemilugba, Group Managing Director of Errand Group of Companies ranging from trading to haulage and logistics (Errand Simplified Nig. Ltd). He is a haulage contractor with over 7 years experience in the Nigeria logistics industry. He is a Certified Economist with over 9 years experience in the banking industry before his voluntary exit to the business world. He earned his MBA with specialty in Finance from the University of Lagos.

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Haulage refers to the business or process of the movement of goods majorly by road or rail from one place to the other by bus, lorry/truck or train. It is a business area that will continue to exist as long as there is a requirement for movement of goods on the globe.

You do not need substantial sums to embark on a business in haulage. Contrary to public opinion, you do not need to start by owning a vehicle. You can be a stake holder or an operator in this industry either by being an agent, transporter or contractor (haulage manager).  Before venturing into the business, you need to be able to identify at what level you intend to operate. Is it at a bus or lorry level, intra or interstate transport?  The industry sector: oil and gas or dry cargo? Do you want to start as an agent, transporter or contractor?It depends on your wherewithal. You also do not need any professional training to start.

Research showed me that statistically an average of 100 trucks is shipped to Nigerian shores on a monthly basis. This shows the massive demand for lorries/trucks in the industry, and this demand is still under supplied. In a developed economy where railways are operational, the demand for truck service is high; talk less of a developing economy like Nigeria where our railways are not functioning. Therefore, there is this endless opportunity for road haulage business in Africa.

You can start out as an agent even as a student. The Agent acts as a link between the owner of the trucks (transporter) and the company who needs the transport service. This earns you a commission of ten percent of the freight fee as agent based on industry standard. In developed economies, a number of individuals and some companies make a fortune on commission in the haulage industry without having a single truck.

It is not everybody that has the opportunity of raising cash to buy a vehicle and becoming a Transporter. But starting in haulage as a transporter requires that you own a vehicle and have a driver plus a license to operate, and where necessary join the trade association. As a transporter, you may not have a contract with mega companies, but you own your trucks. The real responsibilities lie on your shoulders. Most importantly are the issues of vehicle maintenance and drivers.

In business economics, ‘Pareto Optimality’ talks about 20:80 formula.  The drivers are indispensable because they are the twenty percent factor of your wealth creation that gives eighty percent return on your asset. Getting it right on this task gives eighty percent guarantee that your vessel will get to its destination. Care for the drivers and you would get value for your money.An illiterate truck driver goes home with an average income of N250,000 in a month, while a graduate, who could have learnt how to drive a truck, is looking for job on the streets of Nigeria. Food for thought!

Investors will invest in your business once they are confident that you are good at what you do. That is why it is always better to leverage on your network and experience before investing fully in the haulage business. In addition to having a fleet of trucks, you need to get a GIT (goods-in-transit) insurance with fidelity bond to cover possible loss of goods in transit as well as conspiracy on the part of fraudulent staff. As a transporter, you would also need a physical admin office for correspondence and a yard for your vehicles.
Manufacturers or the bigger companies prefer to put their consignments in care of Haulage Managers(Freight Forwarders). At the lower rung, these are more or less also agents but with the financial muscle to provide a one stop service, arranging and organising transporters and providing the level of comfort that is called for in the consignment of their goods. In return they get a certain fee for hauling under their brand name apart from the income realised from the freight. The zenith of haulage management for the small to mid-size operator is to have on-going contract work, guaranteeing steady income flow while the contract lasts. You will have to join a professional body to stay above water if you operate at this level of the haulage business. There is a professional body called Chartered Institute of Logistics and Transport (CILT) that was formed in UK,with a chapter in Nigeria to coordinate and organize haulage and other aspects of the logistics and transport profession in Nigeria.

Qualities required to run a haulage business successfully are not different from that of any other enterprise. Whatever it takes you to manage your life successfully is what business requires. Business is a life on its own and needs attention. Haulage business can be a very lucrative business. The strategy that I preach and that has really worked for our organization is simply empathy and accountability. Be accountable for resources in your care and treat all relationships or clients and colleagues the way you want to be treated.

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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