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The Activity of Road Freight Transport

Despite tougher conditions for access to the profession, creations remain by far the most common mode of installation. Many former employees buy their own truck to start their own business. They can then partner with another freelancer or network with other companies. The creator must have an administrative office, a parking space for the vehicle and warehouses. The premises are largely located on the outskirts of cities, near major highways. The professional often starts with subcontracts.

Investments

The purchase of the tractor and the semi-trailer, essential equipment for the activity constitutes the heaviest investment. However, there is a large second-hand market, which can significantly reduce the amount of these investments.

Daily monitoring

The professional follows his cost price per kilometer, this amount to cover direct costs (diesel, tolls, road costs, etc.) and overhead costs. Depending on this price, he can establish his tariff grid (cost of the tax transported per km) and check the profitability of his transport contracts. For larger companies, the professional also tracks the turnover achieved by truck.

Revenue from the activity

Billing is based on the transport distance, weight and volume of the goods as well as its nature (solid, liquid, hazardous materials, etc.). Some ancillary services (warehousing, distribution with billing support, etc.) may also be charged.

The charges to watch

The highest charges are direct mileage, which includes fuel and personnel costs. In these two important positions (which account for 52% of the cost price), it is important to note the significant weight of vehicle costs (mainly holding and maintenance) and the weight of insurance costs, a position that is particularly important in this occupation.

Control of the result

The result depends on the ability to minimize the non-use of vehicles while having a pricing policy ensuring a correct profitability. In a context of extreme competition, the race for turnover is both a necessity and a factor of non-profitability. Profitability can be improved through the sale of higher value added ancillary services, such as logistics, warehousing and billing of deliveries. However, these activities require investments that only large companies can achieve. The use of the loadboard is perfect in this case.

Financial management and cash requirements

The basic requirement to start an business is the fixed capital and working capital. Own funds must represent at least 30% of permanent capital. The need for working capital is important, especially since supplier delays below customer deadlines take up part of the liquidity of the carriers.

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