Fundamentals Of Transport Business

Fundamental of transport Business

The transport industry is one of the most versatile in the present era. The business operators, engaged in services like packaging and moving have to comply with a large number of rules and regulations. There are a lot of factors that have the potential to affect the business directly or indirectly. Transporting business may excite a few, but the real challenges can only be experienced by the operators or the people who are engaged in it. To start a new transportation venture or make the existing one more efficient, we need to understand the core of this business.

Here are some of the basic dimensions of this industry:

(a) Planning

All kinds of businesses require utmost planning beforehand and a foolproof plan, but in the case of logistics and transportation business, the scope of the planning gets wider and the individuals involved need to grasp the knowledge about the needs of the customer. Understanding the market pattern and thereby, acting upon it is one of the primary aspects of planning.

(b) Asset Management

The transportation business involves vehicles, mostly heavy-duty trucks in large numbers. These vehicles cost a lot to the business operator and one needs to seek loan support. Even after procuring these vehicles, the service provider has to keep a regular check on these vehicles like tracking their movements, etc.

(c) Acquiring customers

Having an unbeatable customer base is necessary for any business to survive. The business owners/operators need to acquire a large chunk of the industry’s customers. This can be done with the help of making provisions for quality services to the clients.

Transport Business Functions in 4 Basic Steps:

(1) Company

A transportation business has its basis in the requirement of its clients. Customer satisfaction is one of the primary aspects of any business. In the array of the transportation business, the client base can largely comprise the companies. This B2B (business-to-business) approach is widely seen in the transportation industry.

The companies belonging to different goods industries need to outsource the services of transportation. This is due to the involvement of bulk goods in various sectors and the need to move them from one place to another. Renowned brands like Samsung, Havells, L.G, Asian Paints also need to consult and hire the services from transporters. They need these services when these businesses/companies make bulk purchases or shift their goods to another location.

Moving goods from origin to warehouses, wholesale or retail stores require the expert services of moving goods. These companies, thus, reach out to the booking offices of decent players in the transportation industry.

The need for commercial vehicles for the safe and secure movement of goods is there in every business field. The transporters have a very critical responsibility of temporarily possessing the expensive goods and moving them from place to place. Thus, the truck/transportation company operator has an innumerable number of liabilities and expenses that it must fulfill to survive in the market.

(2) Booking Agent/Office

This can be defined as a second level in the transportation chain. By the term booking agent, we mean to refer to the goods booking office. The booking agent works following the transport company and the client. The transport agent is the one who doesn’t possess assets like multiple trucks, big offices, etc. but only works to receive orders from the client and approach the transportation company to seek such services. These middlemen play an important role in connecting the clients with the service providers by assuring quality services to the client and making relevant remuneration to the transporter in return.

If we look from a different dimension, the booking agent is one of the promising careers in the transport industry. People who wish to enter the transportation industry can opt for being a booking agent as it doesn’t involve huge costs and effort. The level of risk is the bare minimum in this field and a lot of newbies prefer this occupation as the returns are higher as compared to the investment cost in it. A booking agent can be chosen as a great career for a fresher. With time, a person can acquire an appreciable amount of experience, and then a full-fledged transportation business can be started.

(3) Commission Agent

The commission agent plays an unreplaceable role in the transportation sector. Commission agent eases the entire process of moving the goods from one place to another. The successful movement of goods is done with the help of these middlemen. Dispatching the goods to the relevant destinations is the sole responsibility of the commission agent. These commission agents work as a catalyst between the truck owner and the booking agent. They generate revenue from both the parties involved in the process, i.e., the truck owner/company and the booking agent.

The booking agent approaches the commission agent to seek the services of transporting goods. The commission agent further approaches the main service provider for executing the final process. Commission agents help widen the customer base of a company and provide these companies with work. This is again a very promising career in the transportation industry as it involves less cost and risk. Commission agents must have a great customer base as they are dependent on the contacts. The commission agents must possess a huge network of various franchise businesses as well as customers who seek the transportation facilities.

The entire responsibility of moving the goods from one place to another is of a commission agent. These agents are responsible for any kind of mishap/damage of the goods to the customer as well as the booking agent. Commission agents indirectly control the ins and outs of the transportation market as they are street smart with a lot of field experience. Their role in the industry cannot be neglected and the large businesses have no choice rather than to depend on these agents for their welfare.

(4) Truck Owner

The transportation industry is extremely fluctuating and the dimensions involved don’t stay the same every day. There are numerous transitionary aspects in the industry of transportation and logistics. The level of interaction between the customer and the client is changed every other day.

Sometimes a service provider gets sufficient work in a day with which the entire cost for a month can be covered, while on some days these service providers receive zero work. Therefore, the level of uncertainty is high in the transportation business. The service provider, the one who possesses a large number of assets is at the biggest risk as several external and internal factors change the overall scenario of the industry.

A business that has assets like numerous trucks is at the biggest risk as the operator has to bear a huge number of expenses like monthly installments, commercial taxes, inter-state toll taxes, and most importantly, the cost of vehicle maintenance. Therefore, it is highly recommended to work in coordination with the commission agents who help you fetch the business. This is because a commission agent seeks the transportation service from the business according to the actual demand, which is undoubtedly beneficial for the real transport company.

The business operator is very much prone to get adversely affected in the transportation due to the sudden fluctuation in the industry like strike, ban on inter-state movement, government policies, weather conditions, etc.

Conclusion

Before stepping into a highly transitionary industry like transportation, an individual/entity has to look for the options available like being a booking agent, commission agent in the beginning, and later moving into the core of the industry. We need to understand that what appears to a layman is not always true, for example, even a big transport business needs some catalysts like commission agents, booking agents, etc. to make the entire working of the business swifter & easier.

While sometimes, these middlemen have much work with the help of their network, and at the same time the big transportation businesses struggle to make their mark or at least pay their huge liabilities that are in the form of installments, maintenance, salaries, etc.