In our discussion, we will focus on the degree of risk and profits involved in the haulage business.
But before we get into the details, we want to share with you a few ideas about the transportation business.
In this regard, let us move to our talk for today.
The transportation business has been a rewarding business over time. Apart from the fact that the transport business is very profitable, it is very risky as well.
Even more so, some people are afraid to invest in the transportation business in Nigeria. It is because they are fearful of losing money.
Do you want to start a transportation business? You’ll find this article very informative.
What Exactly is a Haulage Business?
A haulage business has to do with moving heavy items from one place to another. Such goods are conveyed to either industries or big businessmen to be rewarded with cash for their services.
This transportation business involves the use of trains, heavy trucks and so that such items can be conveyed.
Some of the items for transportation include petroleum, raw materials, food, etc.
How Rewarding is a Haulage Business?
As we said earlier, the haulage business is very profitable. Because there are many industries and huge investors who want their goods moved to their stations.
Thus, transportation companies benefit from this situation to maximize their profits. Let us look at how the haulage industry makes money.
Own a Haulage Company
You can make so much profit from this business if you own a Haulage Company. All profits generated within the business will be your own.
All you need are reliable and trustworthy drivers who can decently run your vehicles.
That way, you can have time to plan other things regarding the business.
As the sole owner of a haulage company, you only seek contracts. Such contracts may be obtained from industries and large traders dealing with oil stations.
While you leave it to your drivers to deliver the services.
Bigger Trucks Fetch Big Money
Larger trucks have greater space that can accommodate a large number of commodities. Thus, the larger the number of goods your trucks can be able to convey, the more profit you make.
That’s because you don’t have to make a shipment multiple times. That way, you can save your shipping costs for these items individually.
Furthermore, owning a big truck will be of added advantage over smaller trucks. There may be heavy items that cannot get into smaller vehicles. Only heavy trucks can be capable to carry such goods.
So if you can afford to buy big trucks, you can get huge profits from the hauling business.
In some findings, a large truck can generate nearly ₦500,000 additional profits in only one week. Although it depends on how many times you make deliveries. Other smaller trucks can generate ₦250,000 – ₦300,000 a week.
This is a tremendous profit to make in Nigeria.
- Collaborate with an Industry
That’s another way to make a profit in the transportation business.
As a truck owner, you can agree with any industry. You’ll be the only one making deliveries for them through your agreements. Like many industries, you’re able to leas with, the more income you get.
The industry you partner with will take responsibility for taking care of your trucks and paying your workers. At the end of the month, the industry will pay you a set amount.
It generally varies from ₦350,000 to ₦650,000.
Risk Involved in a Haulage Business
For every established company, there must be a downside. Right here, we will focus on the risks inherent in the transportation business.
Read on and find out.
You may lose your trucks due to car crashes, especially in Nigeria. Giving the reason that, most of the roads are severely damaged. So when you lose a truck in a crash, you lose a lot.
Because it will cost you extra cash to restore the damaged vehicle. Plus, you miss other delivery you are supposed to match up to.
This is one of the hazards involved in the transportation business in Nigeria.
In this regard, many investors are scared to invest in this lucrative business.
Your business may slowly, crash when your drivers are unreliable.
They may have bad behavior that can ruin your transportation business. Some of these behaviors include rough driving and making late deliveries intentionally.
The major problem that you may encounter with drivers in the transportation business is rough driving.
These drivers don’t drive with care, coupled with the fact that Nigerian roads are bad. Instead of your vehicles lasting long, they easily developed a fault due to lack of maintenance.
And it’s going to cost you more to repair damaged cars. That’s one huge minus in your treasure.
Some drivers do late shipments. And when they don’t meet up with customers on time, the clients may lose confidence in your business. As this situation continues, you lose your clients.
When there are no clients, definitely your company will gradually fall apart.
Spend a Great Deal to Carry a Few Items
There are occasions when you have to deliver a small number of goods to a remote location.
Carrying these goods in an enormous truck will cost you more. Yet you’re not going to get a lot of money that’s going to be enough to offset your expenses.
In the first place, you need to fill up your big truck to allow you to make the delivery. And when the price of gas goes up, you pay more. Then secondly, you suffer to settle your drivers for their services.
Then when you calculate those expenses, you will discover that you have little to nothing left to hold on to.
Therefore, you take of this situation when venturing a transport business. As a risk involved in this venture.
Finally, the transportation business is actually rewarding. But there are also several risks involved. Your ability to manage those risks is what makes you successful.
With the information provided above, you can determine how profitable a transport business can be, and the risk involved. Therefore, it is your choice to make, whether to invest in the haulage business or not.