Do you have flair for transportation? Or you have the idea on how goods can be transported from place to the other in the country? If your answer to these questions is YES then you need to set up a lucrative Haulage business in Nigeria. Moving goods from one place to the other has been one of the major challenges we are experiencing in Nigeria and this didn’t happen overnight. It started from the rot we now have in our Railway transportation system. Our major source of transportation right now is by road and that’s one of the reasons why I compiled this post.
Haulage business is a goldmine in Nigeria. Haulage services are rendered to customers through heavy vehicles that are capable of lifting larger goods at a time. Such vehicles include: trucks, tipper, trailer, cranes and tankers.
These are some of the products that can be transported through these heavy duty vehicles.
- Premium motor spirit (petrol)
- Engine oil
- Natural gas
- Sand and stones
- Consumer goods from manufacturing company
- Irons, corrugated sheets, woods, ceiling boards and any other types of construction materials
These are some of the products that can be transported from one place to the other through the help of haulage transportation service.
Profit potentials in haulage business in Nigeria
You can’t go wrong if you invest into this business and that’s one of the reasons why I want to give you some profit analysis in the system.
The table above shows the charge of transporting goods using a 40ft container from one city to another city in Nigeria. The table highlights Destination, charges per trip, cost of fuelling and profits after each trip.
With this profit analysis, I believe you must have seen the profit potentials that exist in this haulage business in Nigeria.
Risks and challenges involved in haulage business in Nigeria
I’m going to give you all the risk and challenges involves in this business. Do you know why I’m about to reveal this secrets to you? It’s just that I’m not a blogger and writer that lures investors into any how business without telling them the risks and challenges involved.
These are some of the risks associated with this lucrative business.
Loosing your trucks due to the dilapidated roads we have in Nigeria
Most people think twice before going into this business due to the state of roads we have in Nigeria. Hardly can you travel in Nigeria without seeing potholes on the roads. These potholes causes major bad effects on buses and trailers and that’s the major reason why you see tens of trailers breaking down on the road, causing lots of traffic for commuters.
Drivers non challant attitude
If you don’t have the mechanism to monitor your drivers, they can run your business down. Most drivers don’t deliver the exact amount they’re meant to deliver anytime they go out on a trip. Meanwhile, you will still be the one to maintain the trailer or truck since you are the investor and owner of the haulage business.
High cost of maintenance and fuelling
One of the factors that gulp up your profits in this business is fuelling and maintenance. From Lagos to Abuja fuelling and maintenance will gulp up to N140,000 excluding other fees like tickets and police bribe.
Higher financial risk
Transportation business is capital intensive. In this business, you need up to N5,000,000 to start it up. So that means higher start up cost equals higher financial risk.
Other factors you need to look out for in this business include:
If you want to operate this business successfully in Nigeria, you need to consider the following factors
- Insurance cost
- Maintenance cost
- Niger delta permit papers
- Drivers salary
These factors take a significant cost out of your capital and it’s something you can’t do without in the system
Another factor you need to look into is fuelling. I decided not to put it in the first option due to its significant in this business. As an investor in this system, if you don’t want your trailers to start breaking down, you need to avoid contaminated or mixed diesel. Contaminated or mixed diesel wears down trailer engine which at the end brings about high maintenance cost.
Mode of operation in haulage business
These are the mode of operation under this transportation system
Haulage agents or fleet managers are owners of registered haulage enterprise and specializes in managing other investors trucks with their own. As an investor, you can get a truck or trailer and register it under an enterprise managed by a fleet agent. The agent will then start remitting agreed commission to your bank account weekly or monthly.
Under this hire purchase option, the investor buys the trucks, get the necessary documents for the business and release it out to a driver who will be paying on agreed percentage. For example, you get a trailer at the rate of N15,000,000 you can hire it out on an agreed payment of N18,000,000
Conditions that prevails in hire purchase option
- You buy the truck as an investor and hire it out for installmental payment
- The agreed payment will be made bi-weekly or monthly
- Maintenance and fuelling will be done by the driver
- The driver owns the truck or trailer after paying the agreed payment
With the information I put up in this guide, I believe you must have seen one or two tips on how to start up this business in Nigeria.
If you have any information or question about this haulage business, drop it in the comment box.
Thanks for reading.