SHIPPING COMPANY BUSINESS PLAN
The interdependence of the global economy has made shipping central to its success. Finished products of all kinds leave the shores of their originating countries to consumer destinations. This is a multi-billion dollar industry that continues to grow in relevance.
If you have wondered how to participate, the good news is you can! We will show you how to start a shipping company by setting out practical ways to follow.
Here is a sample business plan for starting a shipping line business.
- Understanding how the Industry Works
Starting a shipping line involves a lot of procedures and steps. First, you must know how the industry works. Sadly enough, this industry is not for novices. Experience is a key requirement for getting your shipping company started. You will be dealing with a lot of logistics hence the need to assemble all the professionals to help your business operate smoothly.
- A lot of Paperwork is required
To start a shipping agent business, elaborate paperwork is required especially regarding applying and obtaining necessary licensing. The Federal Maritime Commission FMC is the body saddled with the responsibility of the issuance of permits. After applying for a license, the Office of Transportation Intermediaries OTI will review all applications for OTI licenses.
As a new entrant into the ship company ownership business, you are expected to fill out a form which is known as the form FMC-18. There are several other requirements you are expected to follow. For a detailed study, you should visit its link above.
- What Products do you Intend Shipping?
This question is of utmost importance to persons interested in starting a shipping company. Several regulations apply for certain types of shipped goods. A few types of goods include electronics, agricultural produce, furniture, vehicles and more. Whichever type of goods you intend shipping, you should find the laws applicable to such goods. This enables you to plan accordingly.
- Having a Shipping Business Plan
We mentioned earlier that to start a shipping business, you will have to handle a tremendous amount of logistics.
This requires elaborate planning, hence your business plan. We recommend that you involve experts in the planning stages. Such experts will help in putting together a solid plan that increases your chances of success with your shipping company.
A well-crafted plan helps in setting the tone or direction for the shipping company. By following its blueprint, the shipping company is guided towards the path of sustainable growth. Another advantage of having a sound plan is that it is used when applying for a loan. Financial institutions will always demand your plan to enable them to see the workability or viability of your business idea.
- Locating your Shipping Company
One of the most important things to consider when starting a shipping company is to consider where it will be located. This determines the success of your venture. Ideal locations for citing a shipping company are in port surroundings. Because lots of containers will be unloaded from shipping vessels, there should be enough temporary storage space. Such locations are close to rail lines too!.
- Startup Costs
Startup costs for starting a shipping company are usually on the high side. In addition to this, it is a capital intensive venture. Hence the need to ensure your business is well funded. Such funds can be raised by applying for loans from financial institutions. Naturally, this comes with interest rates. We recommend that you only accept loans with moderate interest charges as such are beneficial and give your business breathing space.
- Purchasing Equipment
Equipment for a shipping company is costly and can eat up a substantial part of your capital. You should know that if you don’t have the necessary funding to purchase such equipment, there are available options. A popular one is leasing such equipment. Some companies lease out shipping equipment. Under such circumstances, negotiation is entered into to arrive at an acceptable leasing fee.
Under this arrangement, a contract is entered into that allows you the usage of such equipment within the time spelled out in the agreement.
- Barriers that Hinder Smooth Takeoff
Not all laws guiding the setting up of a shipping company are friendly to entrepreneurs. Some countries have maritime laws that act as a hindrance or barrier to would-be entrepreneurs. These barriers are mostly finance-related. This leaves many small scale investors unable to participate in the booming maritime industry. There is little that can be done to overcome this type of barrier as a new entrepreneur with limited capital.
- Know the Type of Shipping Company you want to Establish
To launch a successful shipping company, you must identify your specific area of interest. If you are a bit confused, don’t be. Shipping companies carry out two main types of operations. Such include the ocean freight forwarding as well as land shipment services. Ocean freight forwarders are the owners of the shipping vessels. These are in charge of shipments from ports of origin to ports of destination.
Land shipment services, on the other hand, will convey shipped goods within land borders to their destinations. The latter is considered cheaper to establish than ocean freight forwarding companies. However, in all cases, they are capital intensive and require adequate financial preparations.
GUIDE: How to Secure Shipping Contracts
Starting a shipping company has been our focus. We have seen the different steps that contribute to the success of actualizing such goals. These include licensing, a business plan, startup costs, equipment purchase as well as choosing the type of shipping company you wish to establish. To be successful, all of the sections listed above are important and shouldn’t be ignored.