What type of business is freight? What do you need to start a freight company? Is it profitable?


If you’ve been thinking of starting a business of your own but you have no idea where to begin, you might find this article quite helpful – particularly if you haven’t settled on a business type yet. For example, what type of business is freight? Is it something that you’ve ever considered before? And what would you need to start a freight company of your own? Would it be profitable? 

In this article, we’re going to tell you everything you need to know about the freight business and whether or not starting your own could be a viable plan of action.

What type of business is freight?

So, what type of business is freight? Essentially, freight falls under the category of logistics as it refers to the process of moving goods, products/commodities from one location to another. 

What do you need to start a freight company?

You’d be surprised by how accessible it is to start a freight company of your own. Yes, there’s a lot of work involved – not to mention red tape – but if it is something that you dedicate yourself to, you shouldn’t run into too many problems. Here’s everything you’ll need to start a freight company of your own: 

1 – Write a thorough business plan

As with any business, a detailed business plan is required. Writing a business plan helps you to understand the fundamental aspects of your business, why you are getting into the business of freight, to begin with, and determine whether or not it’s a viable course of action. 

A business plan can help you with the following:

  • Figuring out how much capital you’ll need to get started.
  • Securing a business loan if necessary. 
  • Projecting initial costs Vs. your anticipated profits. 

With an airtight business plan, you can essentially ‘prove’ to both yourself and any prospective investors, as to whether or not you may be successful. 

Think of a business plan as a blueprint of sorts. It allows you to stay focused on the building of your company and make the process far easier as you progress through the following stages. 

A brilliant thing to do in this early stage is to research all of your competitors. You should also look at businesses overseas as well. Get a feel for the different brands out there, how they communicate with their customers, and what their customers have to say about them. To think that a freight company as large as Darwin Transport once began as a business plan on a piece of paper. You too can be the proud owner of a successful freight company as well! 

2 – Register your business 

Assuming that you wrote a successful business plan, the next step is to register your business.

You’ll need to pick a business name to register. Make sure that it is unique and build a brand alongside this (e.g., logo, slogan, colour schemes, brand voice, target market, etc.). 

Remember that your brand is the first thing that potential clients are going to notice about your business. You’ll want to make a great first impression and attract the right type of customer, so ensure that the brand name and logo communicates that. 

Next, you’ll need to decide on your ‘business entity’. Do you plan to start out as a single ‘man with a van’ business owner? Or will you be starting with multiple vehicles and employees? What are your plans for the future? 

Do plenty of research during this phase and make sure that you register your business accordingly. 

3 – Obtain all licences, permits, and insurance as necessary 

Following that, it’s time to make sure that you can operate legally. In order to do so, you will need to research and obtain all of the necessary business licences, permits, and insurance. 

You should have done the bulk of this research in the early planning phase – when you wrote your business plan. As such, you will know all of the legal challenges that freight businesses face and which specific licences and permits will be required to operate absent any problems. 

Remember that regulations will vary significantly depending on where you are registering your business.

4 – Choose the right vehicle/s 

The beautiful thing about starting a freight company is that you can start from the very beginning. Just you and a truck! From there, you can grow your business, expand your fleet, hire new employees, and evolve into a force to be reckoned with. But, it all starts with choosing the right vehicle, to begin with. 

When deciding on what kind of truck you need to buy, consider the following: 

  • Initial cost
  • Level of comfort for the driver
  • Your preferred cab style
  • Its weather/terrain resistance 
  • Weight/load limit
  • Whether you buy new or used 
  • Are you operating locally or cross-country/inter-state? 

Make sure that you test drive any vehicles before making a decision. You should also heavily research the different brand/type of trucks so that you can get a clear idea from the experts as to which vehicles are best – particularly for new starters. 

Buying Vs. lease is also an important consideration. There are pros and cons for each option so determining which is the better decision for you will take some time and consideration. 

5 – Securing funding for your start up 

You may be fortunate enough to have the money behind you or a friend/family member who is keen to offer the financial backing necessary to get started. Or, like most people, you’ll have to secure some form of business loan/investor backing to get started. Whatever the case, starting a freight business isn’t cheap. This is why you need to go to great lengths to write a banging business plan in the beginning – so that potential investors can recognise the value in what you have to offer. 

Is owning a freight company profitable?

Owning a freight company can be very profitable. It takes a lot of time and effort, but if you have a solid plan and remain determined and continually work your butt off, once your business is off the ground it can be very profitable indeed. 

The fact is—particularly in a post-COVID world where e-Commerce is forever on the rise—the need for quality freight and logistics companies will always be in high demand. In fact, it is quite literally recession-proof. Despite the pandemic and the way that every industry was impacted, logistics had to keep powering through to ensure that the world kept spinning. As such, there’s never been a better time to get into the freight industry.