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How to create a profitable transport company?

Quality of life services

If you wonder if a transport company is profitable, here we tell you what are those factors that you must take into account when starting the business properly.

Understanding how to create a transport company in Colombia is not a small thing; and in any case, it will depend on several aspects:

  • The type of vehicles you want to have in the fleet.
  • The number of cars you need to get.
  • The volume of drivers you need to hire.
  • Administrative, operational and maintenance employees that you need to link.
  • The initial capital that you require.

And most importantly: the availability of time, commitment and dedication to face the problems that arise and the very high competition within the transport and distribution market.

In this article we give you some advice on the aspects that you must define to start on the right path and gradually achieve the profitability and profits that you expect when you are in the passenger transport business in our country.

How to create a transport company in Colombia?

These are four recommendations that you should keep in mind:

1. Define what type of ground transportation service you are going to offer

Start by carrying out a market study (hopefully with the help of a professional) to identify what type of fleet is most profitable for you in the transport service that you will provide.

As a good administrator you must define if you focus on small, medium or large fleets, in addition to the type of business you are dedicated to:

  • Heavy cargo transportation (trucks).
  • Freight transport and distribution (trucks).
  • Special transport service (white plate vehicles).
  • Transportation of personal, executive or business.
  • Passenger transport (public transport).
  • Private transport service (taxis).

In the market study you must also decide whether to lease the fleet, put it to work under your command or make strategic alliances with other companies in the sector.

Be careful: keep in mind that, no matter what you decide, the direction of your transport company will depend entirely on this step, as well as the income, failures or successes.

2. Identify who your potential customers will be

Depending on the focus of your business, you will have to decide if you should approach the terminals, schools, business centers, food companies or the government to offer your services.

Keep a list of your own clients and try to network between other sectors of the transport business where they benefit from each other.

For example, you can create connections with other companies or businesses that recommend you, gradually creating a base of potential or loyal customers.

At this point it is also key that you start some marketing strategies that include the use of social networks and a website.

This is a key factor because most people in the world look for solutions through internet search engines: if they don’t find you there, you don’t exist!

3. Manage transportation costs efficiently

If you are thinking of investing in the land cargo transportation business, one of the fastest growing in Colombia, even in a pandemic, it is important that you know what the expenses are and how to manage them.

Recent figures from the Colombian Federation of Cargo Transporters detail what the operating costs of a transport fleet are like, for tractor-type vehicles:

It is necessary that you pay more attention to the two highest items of the cost of the operation: fuel consumption and vehicle maintenance and repair.

One of the most effective solutions for the correct administration and optimization of these expenses is to have a digital fleet management system.

More and more companies in the world use this type of software for their transport service companies, since technology gives them key control, productivity and consulting tools to save expenses and perceive greater profits.

Tip: you can also give benefits to transporters that show better performance thanks to their driving techniques and way of working.

4. Forget the constant flow of money

Most, if not all, fleets have issues with refunds and payouts.

Many of the transporters do not offer fast payments, in fact, they pay their accounts in percentages, installments or through alliances that do not generate immediate capital.

In fact, what often happens is that the cargo that is delivered today is paid for a month or more later.

In addition, the costs of repairs, gasoline and surprise expenses become a day-to-day issue that generates extra expenses that impact the finances of the transport company.

For this reason, it is essential that you have a cash flow reserve and a rigorous control of the budget at all times, while your company continues to grow.

How to grow a freight forwarding company?

Undoubtedly, to grow in a sector of the economy such as transport and logistics, it is not enough to be an expert in just one thing.

Starting from scratch in this business requires knowing (and being accompanied by those who know) about:

  • How to properly drive a vehicle.
  • Efficient techniques to save gasoline.
  • Technological tools to improve routes.
  • Ways to avoid money leaks and fraud.
  • The best fuel prices in the country.
  • Alliances with workshops for the maintenance and repair of vehicles.

Requirements to create a transport company

If you wonder what are the requirements to create a passenger transport company, you should know that positioning yourself as a visible, fast, constant and reliable cargo transport and logistics company is not a short path, but it is worth it.

So, focus on obtaining the necessary machinery, trained personnel, the necessary technology to optimize and improve the productivity of your operation and stand out from the competition. If you focus on these requirements, you would be on a very good path.

It will not be a job that generates positive results in the short term, it will be a constant work of trial and error that will allow you to learn and improve as a transport fleet!