How to start Logistics Business in India | Follow the 6 Easy Steps

 

The Indian economy has exploded in recent years, creating a massive market for logistical services. Any company's operations can enhance by reducing costs and delivery times with a well-functioning logistics network. It is why people are looking for how to start logistics business in India and earn profits with this.

 

The following are the various sorts of logistics businesses that an entrepreneur can start:

• Courier and freight cargo services 
• Services for air cargo
• Services for warehousing
• Logistics provided by a third party (3PL)

 

6 Steps to start logistics business in India

Step 1 - Decide the Business Model

You'll need to figure out which business strategy you want to use. You can either start your own business or purchase a franchise. 

Decide whether your business will be a start-up or a spin-off of an existing one. Both of these business models have their own set of advantages and disadvantages. 

The one allows you to experiment with new ideas and apply them, but the second requires a lower initial commitment.

Also, decide what kind of services you'll offer. You can either pick and drop things or add packaging and barcode printing to your service. 

Also, consider whether you need a warehouse or if providing small-scale services with end-to-end efficiency is preferable.

 

Step 2 - Register your Logistics Business

The first step is to register your business with the Indian government. You will not be able to obtain a logistics licence to operate as a logistics company if you are not registered. After your successful company registration online, you will receive these documents:

• Udyog Aadhar (MSME Registration)
• GST Number 
• Shop Act Licence

These are the documentation you'll need to start and run a logistics company.

 

Step 3 - Invest

As a first step, a logistics business would seek investment. The quantity of money invested in the company will be determined by the services it aims to provide. 

Setting up a freight forwarding service in the country, for example, would necessitate a capital investment of approximately Rs. 12 crores. 

In comparison to a third-party logistics company, a brokering and freight management service would require less money. A 3PL service company will cost between Rs. 65 and Rs. 100 crores in financing. 

The cost of establishing a Container Freight Station (CFS) or an Inland Container Depot (ICD) is in the hundreds of crores. 

As a result, it's critical to identify the services that need to be targeted and develop an investment strategy around them.

 

Step 4 - Find your Clients

Any successful business relies on effective client engagement. If an entrepreneur desires to create a third-party logistics company, a thorough study of numerous industries/products and an awareness of logistic needs is required. 

Because India is predominantly an export economy, numerous sectors are currently booming, including infrastructure, automobiles, services, and manufacturing. 

All of these industries would require logistical support. 

The key to gaining new customers in third-party logistics services is to provide operationally efficient solutions and identify weak areas. 

Once a regular clientele has been established, infrastructure investment and the development of solutions to cater to the outside market can be prioritised.

Also, you can go to a popular transportation facility in your city or town and try to work out a bargain with them. While you will be in charge of receiving orders, your transport partner will be in charge of moving the products. 

You can work as a fleet owner if you own trucks. In other words, you will oversee the entire transportation process while they handle the door-to-door delivery. You can easily earn roughly 25% of the deal by collaborating with such businesses.

 

Step 5 - Promote and Grow

There is a book that is shared by all of the city's and town's carriers and logistics companies. You must include the name of your organisation in that book. It will bring your organisation to the attention of local transporters, who will be delighted to work with you.

Customers will learn about your firm through your adverts, such as whether you are a fleet owner, a commission broker, or both, and whether you take orders for delivery in North India or South India, among other things.

Even when your company has grown to be a large corporation, you must continue to expand your network in order to pursue prospective collaborations and deals.

If you are new, you can spend 2-3 months at 'Transport Nagar' talking to transport owners and truck drivers, telling them about your new business and handing them your visiting card. Tell them to get in touch with you if they learn of an order that you can fill.

 

Step 6 - Managing the Risk

The logistics industry is a fast-paced industry. Furthermore, in rising economies like India, the danger increases due to divergent positions taken by regulatory organisations, state governments, and the central government. 

Aside from that, Indian roads are notorious for being unreliable. Thousands of car accidents occur every day. 

A logistics supplier who is involved in an accident could lose tens of lakhs of rupees. When creating a business strategy, it is critical to consider the significant risks that the company faces.

 

Licence required to start logistics business in India

In order to start a logistics business in India, you'll need the following licences.

It is necessary for any form of business to receive a licence before engaging in business activity. 

Similarly, it is essential for a Logistics Business to obtain a licence and Company Registration Online certificate to meet all of the government authority's requirements before engaging in business activity.

For Logistics Services engaged in Air Cargo Services, Courier and Freight Services, and Third Party Logistics in India, the following registrations are required.

 

Frequently Asked Questions

• What is the logistics industry?

Within a supply chain and between the locations of origin and consumption, a logistics business plans, implements, and oversees the transportation and storage of commodities, services, or information. Depending on a client's logistical demands, many logistic businesses handle part or all of these supply chain functions.

• What are the logistics departments?

Distribution, order processing, product management, purchasing, and storage are all part of the logistics sector.

• What are the different kinds of logistics?

Procurement logistics, manufacturing logistics, sales logistics, recovery logistics, and recycling logistics are the five categories of logistics.