Planning to start your own shipping and freight business..?? Read this..

1. 1. Are you ready for the startup lifestyle?
   2. Are there customers with real pain and money?
   3. Is the market opportunity large and growing?
   4. Is this a crowded space already?
   5. Does your solution have hidden dependencies or costs?
   6. Do you have intellectual property to defend against competitors?
   7. Can you build a motivated and qualified team?
   8. Have you looked realistically at the costs?
   9. Do you have stamina and skills?
   10. Going “from” rather than “to”?

While the above is good for any business, if you are planning to start your own shipping and freight business, here are 7 reasons why you shouldn’t start your own shipping and freight business..

Yes you are reading it right..
You shouldn ’ thyroxine start your own transportation and cargo clientele if :
7) You don ’ thymine understand the real function and work of the respective entities ( freight forward, customs broker, shipping agent etc etc ) involved in the business
6) You don ’ triiodothyronine know the character of the HS Code or Tariff in the whole gamut of shipping
5) You don ’ deoxythymidine monophosphate know the function of a bill of lading or the dispute between a firm bill of lading and dominate circular of lading

4) You don ’ thyroxine know your Incoterms® from your Algebra or when cargo can be shipped without indemnity
3) Which means you besides don ’ thyroxine know or understand the implications of liability and risk management involved in the business
2) You don ’ metric ton know how to calculate CBM or the entail of Freight Ton/Revenue Ton or the fiscal impact of the business
1) In short, you are ill-defined about the very processes and procedures involved in the import and export range
You must be thinking that it is obvious that one has to have this cognition before wanting to start this commercial enterprise, but you will be surprised to know how many questions I receive relating to transportation and cargo business like below..

1. I am planning to start import and export business in a week with my friends. But I don’t know import and export procedures clearly. Please provide step-by-step guidance how to start freight forwarding business.
2. I want to open my own customs house agency but I am not clear on the duty calculation process, can you help me.

There are several pitfalls of starting a business you know nothing of or diffident of..
Let ’ s examine the reasons why you shouldn ’ metric ton start your own ship and freight commercial enterprise if you fall into the above category..
7) There are respective entities involved in the shipping and cargo diligence like cargo forward, clearing agent, NVOCC, hauler, surveyor, ships agency…………….. and many more..
indeed first and foremost, you need to be absolved about which of these businesses you want to get into..
All these entities have varied and different roles to play in the solid chain and it is surely not easy for a startup with incomplete cognition to handle these functions..
In the case of 1st model above, person wants to start their own cargo forwarding clientele, but has no cognition of the process..
theoretically “ anyone can become a freight advancing ” because in most countries there is no legislation stopping anyone from “ calling ” themselves a freight forward or doing business as a freight forwarder..
however, in regulate to operate as a on-key cargo forward there are several action and procedures to be mindful of and several responsibilities one needs to assume..
Assuming province could besides include costs involved which may fall on the freight forwarders head and he or she has to know the occupation well adequate to ensure which costs he or she possibly held responsible for..
For model, a freight forward needs to know whether he or she can be held creditworthy for abandoned cargo or whether he or she possibly held apt for any damages to cargo route via them and at what stage..
Remember the shipper or consignee is dependant on YOU to provide proper information and guide them with their shipments..

6) Why should I be mindful of the HS Code and tariff and why is this information important to start my own ship and freight business you may ask..
Say for example you are planning to start a Customs Clearing business, the HS Code is the footing on which import tariffs are calculated and any duty, tub or tax is charged..
Without knowing the proper categorization of the cargo and which HS code it falls under, you will not be able to handle your clients cargo effectively.. The incorrect use of the HS code may result in cargo being confiscated, fines levied, criminal penalties/charges instituted, or result in cargo being returned to the POL..
Remember the shipper or consignee is dependent on YOU to provide proper information and guide them with their shipments..

5)  The bill of load is one of the most important documents in the shipping cycle and as a forward or embark agentive role, you need to REALLY know and understand the function of this important document and which character of bill of lading to issue for which dispatch and to where..
As an agent on whom the shipper or consignee depends on

• you need to be aware of how the bill of lading must be consigned and to whom
• of course it would also help if the shipper or consignee knows about the process of export or import especially if they are exporting for the first time or importing for the first time
• you also need to know the various intricacies involved in issuing a house bill of lading vs a master bill of lading
• you need to ensure issuance of the correct type of bill of lading such as Sea waybill instead of Original and vice versa
• you need to ensure that the bill of lading is issued correctly in terms of the transport mode such as Multi-Modal or Combined Transport or Port to Port

incorrect issue of the bill of lading can cause hard fiscal implications not to mention delays at the port of acquit for the node to secure their cargo..
Remember the shipper or consignee is dependent on YOU to provide proper information and guide them with their shipments..

4) Incoterms® rules are an internationally recognized standard and are used cosmopolitan in international and domestic contracts for the sale of goods and is designed to help traders avoid costly misunderstandings by clarifying the tasks, costs and risks involved in the manner of speaking of goods from sellers to buyers..
Incorrect interpretation of Incoterms® by an agent has many a times resulted in respective cases of money and business personnel casualty for both the agent and their customer..
Misinterpretations and incorrect use of the Incoterms® such as the use of FOB for containers, continues in the market strictly based on former practices..
As an agent involved in the shipping and cargo business, you very need to understand these terms in depth so that you may provide reasonable advice to your customers and others who may not be aware of the differences in the terms and where and how it should be applied..
You will require this in-depth cognition particularly when it comes to quoting a customer based on the Incoterms® he provides you.. If you are not mindful of this, you may very good end up missing to quote vitals elements such as duties, taxes and some early important charges..
Remember the shipper or consignee is pendent on YOU to provide proper information and guide them with their shipments..

3) This brings us to the question of risk management associated with the shipping and freight industry.. There are several identify risks as below, all of which can apply in the ship and freight business..

• Using proper SOPs
• Arranging proper insurance cover
• Counterparty risks
• Jurisdictional risks
• Contractual carriers

An agent must be able to advise their clients on these risks and must besides be amply equipped to deal with these risks and be mindful of how to mitigate them if and when it arises..
Another point that most businesses in the industry seem to forget is the custom of proper and comprehensive trade Conditions that must be incorporated in all communications and this dim-witted act has been known to mitigate respective losses to the people involved..
indemnity and risk management cover does not apply entirely to the cargo, seller, buyer etc, but besides applies to a forward or clear agent who must have their own cover to protect themselves.. There are many entities which provide indebtedness insurance and related risk management services to the external transmit and logistics industry..
Remember the shipper or consignee is subject on YOU to provide proper information and guide them with their shipments..

2) Any ship and freight business ( any business for that matter ) will be started with the purpose of making a profit.. however, if you are not aware of the footing on which your service must be charged, then you would start losing money from the beginning..
For exemplar if you want to start a cargo forward or a clear agency clientele you DEFINITELY need to know how to calculate the dimensions of the cargo and be able to work out the CBM and charge the customer footing Revenue Ton or Freight Ton because that is the main basis of charging for many forward, warehousing and clearing agency businesses..
If you are not aware of how this works, then it is going to be very difficult for you to be able to charge your customer..
My post on how to calculate CBM and Freight Ton is the one of the most popular posts on this resource which shows how many people are however learning this and how popular this calculation is..
thus don ’ thyroxine miss learning this crucial point which can affect you financially..
Remember the shipper or consignee is dependent on YOU to provide proper information and guide them with their shipments..

1) The final but most important detail is if you are not aware of the processes and procedures involved in the shipping and freight business, then you would be better off not to start your own transport and freight business..
It is absolutely vital that you have at least a commodity 5-7 years know in a exchangeable “ working ” position in the industry and handling shipments before you even consider starting your own shipping and freight business..
What I have mentioned above are only a few main points, but there are several other points one needs to consider before embarking on your own shipping and freight business..
Like for case, the procedure and procedures involved in insuring yours or your customer ’ sulfur cargo or what happens if cargo is shipped without policy ..
Last but not least : Remember the shipper or consignee is dependent on YOU to provide proper information and guide them with their shipments..

Conclusion

The transport and freight diligence is highly fickle as it is and as you may have seen, many transportation lines, freight forwarders, 3PL companies, and courier companies have merged and strengthened their positions through these mergers and acquisitions..
All these companies have been around, doing the ship and cargo business for yonks and know the workings of the business and so far they have had issues..
Of class that is not to say that smaller operators will be unsuccessful, and if you surely know how the clientele is run and confident of avoiding pitfalls like above, by all means go ahead and “ Start your own shipping and freight business “ .. Good Luck.. 🙂
I am surely that there are some readers who run their own ship and freight clientele successfully or some readers who have not been able to run their own transport and freight business successfully..
In either case, pls partake your experiences so many others can learn what to do and what not to do in order to start and maintain their own transport and freight business..

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