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 the logistics business, the required investment depends on the services you plan to offer. Compared to a 3PL service, a simple brokering or freight management service requires less capital. For example, starting a freight forwarding service in India may need around 1–2 million USD. In contrast, launching a full 3PL service can require 10–18 million USD. 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. Like other businesses, starting a logistics service in India requires important registrations and government approvals. It is beneficial for logistics business owners to register with the International Air Transport Association (IATA) and the Air Cargo Agents Association of India (ACAAI). Joining industry forums, such as the CII Institute of Logistics, can help address logistics-related issues. Additionally, registrations with the DGFT, Income Tax Department, Registrar of Companies, and other relevant government departments are necessary to operate legally.
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.