Logistics and Transport Services: Understanding the Business

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The need for logistics services has greatly increased now that many people are staying at home. Most necessities such as food and medicine are now being delivered directly to houses because it is safer than going outside. If you are thinking of taking your chance in this booming industry, read the following tips that will help you begin your business.

Trucking Services in a Nutshell

Having a logistics business means owning a firm specializing in the storage and delivery of products of other companies. Other aspects of the business include inventory, packaging, security, and warehousing. You are also responsible for the quality of the products as it gets from one point to another.

Logistics is a globally known industry. It’s one of the most booming types of services today, and you can either venture into an international market or focus locally during the first few years as you build your brand.

What Is 3PL?

3PL, also known as a third-party logistics company, is a common term used in the transport industry. It refers to any service contract that provides storage and delivery of a commodity. 3PLs normally offer just one type of services like warehousing, inventory management, and transportation.

3PL companies also work in partnership with small e-commerce business owners by taking care of the transport side of in-house orders. As a 3PL business owner, your overall business involves:

Receiving

A 3PL company can not accept a shipment unless it has on-hand inventory. The ‘receiving’ aspect primarily refers to the arrival of the inventory and its storage.

Warehousing

Once the inventory has been received, the next step is to process the order. At this point, your employee or picker will receive a list of the items, storage locations, and quantities. You also need to collect the ordered items from your partner clients.

Packing

After receiving the products, the next step is to package them securely. The packaging materials will differ based on the type of product and preference of your partner clients. Some of the most commonly used packaging materials are:

  • Dunnage
  • Paper-based dunnage
  • Bubble mailers or wraps
  • Unbranded boxes
  • Polybags
  • Packing tape

Other 3PL companies charge the cost of the packaging or include it in fulfillment services. As an owner, you also have the option to allow your partner clients to personalize their brand.

They can use custom packaging or stickers that will make their products shine through.

Shipping

logistics driver

In shipping orders, most 3PL take care of the print and shipping labels. You can act as a middle man that connects partner clients to other couriers like DHL and USP.

If you have your own drivers and vehicle, you can monitor the whole shipping operation using fleet management software. This application allows you to dispatch and manage all vehicle operations while recording real-time data. Your shipping company should cover transactions via:

  • Land
  • Air
  • Sea

Returns

A majority of 3PL companies offer return processing services. This normally happens when a customer decides to return a package either because it is damaged or wrong. Your job is to coordinate return and replacement between your partner client and customers.

Funding and Capital

A logistics service business usually requires little capital, especially if you already have vehicles that you can use to deliver products. As a beginner, you can start with a simple broker and freight management and add more services as you work your way up.

License and Permits

Every business needs the proper license and permits to make the operation legitimate. If you are going to venture into sea transport service, you need to get a license from U.S. Federal Maritime Commission.

Air shipments, on the other hand, require a license from the U.S. Department of Transportation. Licenses also differ based on which state you’re in. You may also need overweight and oversize permits for interstate trucking.

Three other government bodies that you need to obtain permits from are the Federal Motor Carrier Safety Administration, Customs and Border Protection and the Transportation Security Administration, and the Department of Motor Vehicles or DMV. Other documents that you need to submit are:

  • Proof of ownership and transport
  • Employment or business contract
  • Certificate of registration for the vehicles
  • Driver’s license of your employees
  • Insurance policy
  • Third-party insurance for the vehicles
  • Certificate of registration for operating commercial vehicles

Door-to-door delivery is today’s trend, especially with people relying on it to acquire their daily essentials. With the right information and society’s growing need for freight services, you can rest assured that your business will continuously be in demand.

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