Cross Border Trucking and Logistics Business Advice

 Cross Border Trucking and Logistics Business Advice

Cross-border business is a very profitable and exciting business.  A company with Directors from different countries or with Subsidiaries in other countries will benefit even more.

Whether you have one truck or 10 or you do not have a truck just doing logistics, Forwarding, and clearing only. It is important to know all the compliance and regulations of the industry.

Quotations and Trip Budgets are the most trick parts of this business.

The border is very unpredictable and there are a lot of things that can go wrong at any given minute.

BUSINESS COMPLIANCES

  1. Registered Representative (RR)
  2. Tax Clearance or VAT Registration
  3. Import and Export license
  4. Agent code
  5. Clearing and Forwarding Registration
  6. Cross Border Permit
  7. Border Agents
  8. Border charges
  9. Warehouse
  10. Insurance
  11. Physical Office (even from home but established)
  12. Business network or connections in the country you are delivering.
  13. Established truck contracts

BUYING versus RENTING A TRUCK

Renting or leasing trucks is better when you are starting this business. Just make sure that the trucks are in good order, you do not want to find yourself in a situation where you have more breakdowns and lose trust in your clients.

CATEGORY OF TRUCKS

  1. Taut liners (from the grocery on pallets)
  2. Side Tipper trucks (coal and grain)
  3. Flatbed Trucks (copper, Granite, Cement etc.)

 This means you need to choose a category of Business you need to do first and expand later.

When doing logistics only it means more paperwork and Compliances to be handled on behalf of your clients.

Firstly, when you get a contract before you sign check the rate, and what your client offers for that particular contract, in most cases the transporter is not the one who comes with the price hence you have to be very careful. Determine whether you are going to make a profit or not in that contract. You achieve this using CPK

HOW TO CALCULATE CPK (COST PER KILOMETER)

  1. Firstly, find out how many kilometers the truck will run with the load?
  2. How many loads are you going to make a day?
  3. How many loads per month?
  4. How many kilometers are you going to travel per month? Is the Truck going to have a backload?
  5. Avoid the truck running empty because when it's empty it doesn't make money but costs money.
  6. Considering that any worker in South Africa should work 9 hours a day, 45 hours per week. The maximum speed of a truck is 80km/h,
  7. This means 80*9=720 kilometers per day
  8. At approximately 204 hours per month, the truck will be running.
  9. 204*80=16320 kilometers per month

Then considering loading point delays and offloading points delays this will roughly give us 12000 kilometers travelled per month

This might not be the case as some contracts have their own demands

VARIABLE COSTS AND FIXED COSTS

Variable Costs start adding when the trucks start running whereas Fixed Cost is the costs that exist even if the truck is not running.

VARIABLE COSTS

  1. Diesel
  2. Tires
  3. Tolls
  4. Regular maintenance

FIXED COSTS

  1. Truck and trailer payments
  2. Insurance (GIT)
  3. Driver wages
  4. Administration
  5. Office lease

More info to come please keep coming back.

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