If you are planning or already thinking about starting a freight brokerage better, then we have prepared useful information for you.
What do you need to start a freight brokerage company?
Let’s immediately focus on the fact that the amount of investment in this business is not always proportional to the “output” that you get from it. Yes, you can spend a lot of money on buying your own transport that meets the requirements of the international market, and develop a cool application for tracking cargo on the way, but is it worth it? At first, it is much more correct to focus on providing quality service and keep prices at a low level.
With this approach to organizing operational processes, you find foreign contractors who take on the delivery process itself, and earn on the value added to transportation. As a rule, marginality ranges from 10 to 20 percent.
Let’s take a closer look at each of the steps:
- Company registration. Foreign cargo transportation is subject to VAT at a rate of 0%, so it is important to find a good accountant with experience in foreign economic activity even at the stage of opening a company. When submitting financial statements to the tax office, it is always necessary to justify zero VAT and constantly provide a complete package of documents for this.
- Search for premises and purchase of equipment. The cost of opening the office of a transport company engaged in international transportation is quite small. Unlike a groupage transport company, there is no need to have a warehouse. Therefore, you just need to find a small but comfortable room with the ability to access the Internet and connect telephony. The latter is especially important, since there are many calls to be made outside the country – we recommend that you carefully choose a provider and decide on communication tariffs so as not to spend large sums on calls in the future.
- Interaction with service providers (carriers). The most difficult thing when starting work in international directions is to choose reliable carriers who, at the same time, will be able to provide services for the delivery of goods at prices below the market. The best carriers from Europe in terms of price and service are Belarusian and Lithuanian contractors. Until recently, many transport companies worked with transport owners, but in the light of recent political events, working with them has become impossible at the moment.
- Interaction with clients. Be prepared for the fact that you will be able to take off the cream of foreign deliveries only if there are large volumes of transportation to international destinations. Therefore, first of all, you should pay attention to large manufacturing companies, distributors or federal retail chains. It is important to “package” your services well – when you receive an order from a well-known brand, it will be useful to place it in the list of clients on the site and make a good presentation that reveals your competitive advantages. There are not so many pitfalls in working with large customers, most key customers pay regularly and on time. However, there is one rather big “cobblestone” called deferred payment. Representatives of large businesses that have a large number of “tasty” shipments, as a rule, pay within 30-45 days at the time of transportation. And therefore, in order to avoid a cash gap, be prepared for the fact that you will initially have to pay for transportation from your own budget to transport owners, and your investments will pay off within one to one and a half months.
- Selection of employees. To open a transport company providing international transportation services, you will need a small but professional team.
We train not only specialists on our freight broker training, but also gather groups of professionals for your business. If you need advice on this topic, please contact our specialists.