Most of the transport and logistics business owners complain about the failure in the business and eventually shut down their transport business for they are not able to withstand the piling losses and failure.
Here are the 10 reasons:
(1) Manufacturing Market Not Nearby:
It is important the manufacturing and trading industry is near to your logistics business. If both these markets are not nearby then no matter how much money you invest in your transport business, you will not attain success.
(2) Lack of Mining Industry:
Most people enter into the transport and logistics business to cater to the transportation needs of the mining industry. The mining industry includes a wide variety of materials – coal, iron, aluminum, etc.
People buy trucks to cater to the transportation and logistics needs of the mining industry and aim for success in the business. If you are planning to buy 16 tires truck or 20 tires or 22 tires truck you should have a mining industry nearby as such trucks are used for catering to the logistics needs of mining industries and carrying its materials.
However, before starting the business in this area, you have to make sure that the mining industry will be in work for a good long number of years. Never go for the business if you find that the mining industry will be just for a short time period.
Those transporters who are already carrying out their transport business in the acumen they are established ones and are able to make profits. If you will enter to cater needs of the mining industry who is there for a short duration then you will incur a loss.
(3) Not Fixed Customers:
Your transport and logistics business will not succeed if you do not have fixed customers.
90% of the transport businesses fail because there are no fixed customers.
So to grow and succeed in this field you should have fixed customers.
(4) Fleet Purchase Without Planning:
It is advisable that you buy a truck only after having a clear business plan. Trucks are very costly and require a good amount of investment. Your huge sum of money is invested in buying the truck. If your business is not running well then you will incur a huge loss. Never buy a truck after seeing others and buy trucks on the basis of your clear business plan.
(5) Not planning for truckload:
If you have trucks on a commission basis, then make sure that you have a two-way run. If there is no timely load planning and only one- way run, then you are sure to incur a business loss.
If your losses get piled up and go beyond control, you will finally shut down your transport services.
It is important that you have a two-way truck business for tasting success in your profession.
(6) Lack of experience:
It is commonly seen that many freshers who are working in the transport industry for two months or more, plan to start their business after buying the truck.
It is advisable that freshers never commit such a mistake. For newcomers in the logistics industry will not be aware of the challenges and issues that they have to come across. If they do not have any experience to combat the challenges of the transport industry they will start incurring losses.
So if you are a fresher with one or two months experience in the transport industry then never buy the truck. It is advisable that you buy a truck on a commission basis or on lease. Then avail one or two years of experience in the field and then buy the truck of your own.
(7) Not control over the driver:
Some of the transporters who own trucks; do not have any control over their drivers. This results in their incurring losses in their logistics business. For example, if your truck is carrying the materials of Hindustan Unilever Limited from Delhi to Bangalore.
The driver of the truck is unprofessional and adamant and gets down from the vehicle 200 km before Bangalore and runs away with some 25,000/- or 30,000/- amount in sync with his salary and leaves the vehicle in the midst of the road.
Furthermore, the driver calls you and says he will not go ahead and is leaving the job and goes home, all this will hamper your market value and will spoil your relationship with the clients.
If two to three drivers behave such this will be trouble for your logistics business. This will reduce your business which will eventually go in loss and will result in a shutdown. It is therefore important to have control over the drivers for the smooth functioning of the business process.
(8) Do not know the actual expenditure calculations:
It is important that the transporter should know the expenses of their trucks. Truck expenses per kilometer should be known. The owner should be aware of the type of kilometer per cost.
They should know after how many kilometers the average vehicle is reached. Also, know the EMI costs and EM per kilometer rate, document per kilometer and maintenance per kilometer rate, and other relating logistics expenses on per kilometer cost basis.
If this information is not known there is likely that your drivers will commit fraud and you will not get good profit and will be forced to sell your trucks and shut your transport business.
(9) Not Collecting Payment FromThe Market on Time:
If a transporter more money is invested in the market. If that money is not collected in time from the market there will be an issue of circulation of funds and eventually loss in the freight forwarding business. The owner will not have any money to run the business.
Like if the truck is going to Bangalore, you are no having money in your account to pay the toll, diesel, and other related expenses, and your truck stops on the way.
Also, insufficient funds result run in an EMI bounce and the financer takes your truck away. With all these things you will get less business and your business will slowly incur a loss and finally, it gets shut down.
(10) Not Serious For The Business:
For any business you do in your life, you should 100% loyal and focused. If you are loyal and focused you will be able to explore more business opportunities and strategies and also will be able to solve any problems and arrive at accurate business solutions soon.
