How do big freight forwarders work

Your own forwarding agency - the path to independence

Table of Contents

Starting your own business is not easy. In a highly competitive market such as the freight forwarding industry, you should inform yourself extensively beforehand in order to avoid serious mistakes.

Since the worldwide flow of goods is steadily increasing, freight forwarders will benefit from the good starting position now and in the future. A major growth driver is the flourishing mail order and internet trade. Because a large part of the goods are already ordered online in both B2B and B2C and delivered directly via transport companies.

FACT: Logistics is one Industry with a future.

The current labor market situation and the low wages in the transport industry are certainly common reasons for self-employment.

However, inexperienced entrepreneurs in particular can quickly fail if they go into self-employment carelessly. Because this also means that you act on your own responsibility and cannot rest on partial successes.

So from now on you are your own boss and therefore also responsible for all processes in the company: be it customer acquisition, accounting or staff management.

Establish a transport company

If you would like to set up your own business transporting goods, the following options are available.

On the one hand, you can start as a lone fighter with a small transport company. If you have larger financial reserves and investment opportunities, it would certainly make sense to set up directly as a freight forwarder.

Depending on the size of the goods to be transported, you also have the option of transporting them by vans or trucks. A not insignificant importance is to be attached to the freight traffic that does not require a permit, including the courier, express and parcel services.

As you can see, there are different options and which path you take also depends on how much capital you want or can contribute to the start-up.

In order to successfully set up a transport company, you have to meet a few important requirements, which are best settled as early as possible.

Below you will get an overview of which points are essential for starting a business in the transport and forwarding sector.

Correct vehicle selection for setting up the forwarding company

For the successful establishment of a shipping company, it is important that you have the right vehicle fleet.

Therefore, you should work out a clear strategy in advance as to the direction in which the provision of the transport services should take place when setting up a shipping company. Cars, containers, furniture, bulk goods or smaller items, e.g. as a parcel delivery service or courier service, would be possible here.

You should always keep an eye on your potential competitors, against whom your logistics company ultimately has to assert itself.

Once this has been clarified, the right vehicles should be purchased.

When choosing your start-up location, you should consider that, ideally, there will be a truck workshop near you. The direct access to a van rental service should not be underestimated if one's own vehicles have to be repaired.

Obtain all transportation business permits

Provided that you work with vehicles that have a total weight of more than three and a half tons, you must comply with the Road Haulage Act.

You will then need a road haulage permit to set up a new transport company.

You have to apply for the license at the respective licensing authority in your city or municipality. There you have to present all the documents that clearly certify that you meet all the requirements for setting up a shipping company.

DANGER: Take this important step as early as possible, as approval by the authorities can take up to three months.

The following requirements must be met:

Professional qualification: For the technical qualification you have to successfully pass a technical examination at the Chamber of Industry and Commerce (IHK for short). This takes place in both written and oral form and includes the subject areas of law, commercial and financial management, as well as technical standards and technical operations. The exam fee to be paid varies depending on the municipality.

Personal reliability: The competent licensing authority checks your personal reliability based on the certificate of good conduct and excerpts from the central traffic register and the central trade register. If you have already been self-employed before founding your forwarding company, you must also submit the relevant certificates from the tax office, the relevant professional association and your health insurance company.

Financial performance:In order to be able to prove your liquidity, you need an equity certificate from your tax advisor. The purpose of this certificate is to disclose your equity. This should be at least 9,000 euros. This amount relates to one vehicle. For each additional vehicle you have to prove an additional 5,000 euros in equity.

But not only such formal requirements are necessary to set up a transport company. You also have to make numerous decisions about the business concept of your startup.

TIP: Before going to business registration, you should definitely check whether it is possible for you to acquire lucrative jobs. These are the basic requirements for a successful start. To do this, get in touch with many potential clients, even if personally.

What are the advantages and disadvantages of self-employment?

If you are self-employed, you should also bear in mind that in addition to the specific activity, other areas must be covered:

  • Customer advice / acquisition
  • accounting
  • marketing
  • Contract and condition negotiations and much more.

Get extensive advice, especially in areas that are not part of your specialist qualifications. Contact points such as the employment agency, the local IHK (Chamber of Commerce and Industry) and start-up platforms on the Internet offer many possibilities.

You should also find out about funding programs or start-up support.

As a transport company, you usually have to make expensive purchases. In order to be able to offer your services in the best possible way, you usually need one or more vehicle (s).

That can quickly represent a not inconsiderable financial risk, especially if you are dependent on outside capital from banks.

Find out exactly about financing or leasing options, including the "small print". In some leasing contracts, unexpected ancillary costs lurk, for example for mandatory inspections and the like.

Also, you may not be able to "get out" of a leasing contract if the start-up fails. An unused transport vehicle or even a truck that generates high monthly costs can quickly “break your neck”.

Hidden Risks

It doesn't always have to be new. In order to keep the acquisition costs as low as possible, you can also opt for a well-preserved used vehicle.

Online platforms such as Autoscout24.de Commercial Vehicles or similar well-known service providers offer a large selection.

The advantage of the named provider: There you can filter for various purposes or structure types. You should look specifically for offers from reputable dealers, because the following points must be observed for new entrepreneurs:

  • Do I get a tax-deductible invoice?
  • What about the warranty, which can save you a lot of trouble, especially at the beginning of self-employment?
  • How trustworthy is the dealer?
  • Is their company near me?
  • How intensively can I test the vehicle in advance?
  • Does he offer a repair service for the respective brand?
  • Are suitable rental vehicles available for repairs, etc.?

You see, there are a few things to consider. You should also urgently find out which legal framework conditions have to be met in order to be able to offer a haulage company (liability and transport issues, insurance, registration requirements, possibly required vocational training, special driving licenses, etc.).

How does a business plan help me?

You can get a good overview of your company when you draw up a business plan.

You can sometimes use free templates on the Internet (make sure to check the quality and coordinate this with a start-up advice center if necessary). Or you develop a detailed business plan together with a start-up coach.

A business plan encompasses all areas of your company, from the idea to implementation and day-to-day business.

Regardless of whether you want to take out a loan or are interested in appropriate funding programs, the business plan usually serves as the basis for evaluating your independence.

The first steps towards independence:

When you have decided to go into business for yourself, have completed your personal business plan and the financial basis is in place, you have to take care of further bureaucratic activities:

  1. Suitable legal form of the company (clarify with a trusted tax advisor, also with regard to the question of liability)
  2. Business registration
  3. Check insurance coverage
  4. Registration at the tax office

Another important factor is customer acquisition, think about in advance who your desired customers are and how you want to address them.

Do you already have good contacts that you can consider as a potential client? Are there large forwarding companies for which you can work as a subcontractor (but beware of the so-called bogus self-employment!)?

Orders are regulated by contracts. If you are still inexperienced in drafting contracts or in negotiations, it is strongly recommended that you seek professional advice.

A legal dispute due to inadequate written security can quickly mean the end of a company.

REMEMBER: Acquiring customers is not easy, especially in the transport sector, and competition and pressure to perform are great. Start this acquisition in good time!

Vacation and illness in self-employment

Especially at the beginning of their self-employment, many entrepreneurs forego vacation, and illness is often ignored.

However, it is important to think in advance who can represent you in the event of illness.

The path to self-employment and, in particular, to founding a freight forwarder is exciting and long and paved with many stumbling blocks. Consistent planning and established structures will help you to go this way.

Do not be afraid to take professional but also free help from the mentioned contact points.

Thanks for reading through!

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