in past few years, Indian economy growth is the result of huge market for logistics services. In India, over 50 million people are served by logistics industry. by cutting cost and delivery time, operational efficiencies for any business can be improved with the help of an efficient logistics partner. As a result, profit for the business and market share are enhanced. Many types of logistics businesses are there, and one can start any of them. these types are couriers and freight cargo services, warehousing services, third party logistics (3PL and air cargo to India services. There are some points which should be keep in mind to be successful in logistic business. In this article, we will try to discuss those aspects which are important in the growth of logistic business:
funding and investment:
basic and important step is about ‘investment’ that any logistics company would need to take. In logistic business, Amount of investment depends upon the services that you want to start. as compared to a 3PL service, a simple brokering and freight management service will need small amount. For example, you need an investment of one to two million USD to start a freight forwarding service in India, on the other hand, 10 to 18 million USD are required to start a pure 3PL service. Similarly, several hundred million USD are needed to Start an Inland Container Depot (ICD) or Container Freight Station (CFS). You should first have the idea of services you want to start and then prepare investment according to this service. in India, Because of liberal FDI norms and active interest that is shown by private brokers, it is easy to find investment in logistic industry.
Compliance and registration:
getting compulsory registration and compliance certificates is the second important step. Similar to other businesses, Important registration and Government submission is necessary to get start of logistic services. in India, it is beneficial for logistic business holders to get registration with International Air Transport Association (IATA), Air Cargo Agent Association of India (ACAAI). being a part of industry forums such as CII Institute of Logistics are useful to raise logistics industry related issues. further important registrations like DGFT registration, Income Tax Department, Registrar of Companies and related Government Departments are also necessary to start a logistic business in India.
Think About business risks:
Third step which need to be careful about is the business risk’. As India is a developing economy, there could be many risks so in logistic business also. There are many chances of risks as the logistics business is very dynamic because there are multiple partners involved in the complete operation. Business insurance is best option to overcome these threats. In India, there are many insurance companies who offer such insurances like losses from cargo damage, theft, injury, environment damage and so on. On the other hand, business insurances are not always very efficient. In India, for example, in a running 3PL business, inventory shortages are not covered in cargo and property insurance because they are considered as a normal risk.
Here are some more steps to be done while building a logistic business in India:
- A good business plan.
- Have the idea of tax permits.
- Knowledge about competition.
- Build a physical office for your company.
- Look to the employers.