Business Finance Articles

Your First Financial Choice....

Transportation

3 Tips to Establish a Transportation Business

Last Updated on By Leave a Comment

Transportation businesses require a little bit more than a home laptop to get up and running. They are different to the online retail stores and contractor businesses which are more common. The transportation business is not inaccessible, however. Drive forty kilometres down a highway, day or night, and you’ll pass vans and lorries with all sorts of different business names, logos, emails, phone numbers, and a slogan. Following a lorry at night with its orb-like lights which seem attached to very little, but clearly illuminates the business’s logo which is transfixing. Deliveries vans, taxis, and minibuses contribute to dawn’s low rumble. Here are 3 tips to help establish a transportation business.

Let’s assume you’ve started your transportation business. You’ve decided to begin a taxi service, a movers-and-packers, or vehicle transportation, for instance. The business plan is leanly detailed, leaving space for improvisation and so targets don’t get lost in paragraphs.

Fleet and Expansion

Transportation businesses can be started with a single vehicle: a Ford Transit, a Toyota Prius, or a Honda SH350i. The vehicle must suit the business model. There are other caveats to consider too. For instance, across the world, governments are moving to ban the sale of petrol cars, to try to phase them out of circulation, in favour of electric cars and others which don’t require fossil fuels. While these changes won’t come into effect for a number of years yet, it might be worth bearing in mind. The technology which will replace petrol and diesel cars is still fairly young; however, there are available options.

Knowing when to purchase more vehicles and employ more workers can be a difficult decision to make. It mostly comes down to workload and operating costs. Having more vehicles means that operating costs will be higher: fuel, salaries, and permits. Insurance for each vehicle, also – though, shopping for commercial auto insurance online should result in finding affordable policies. However, more jobs can be taken on, which increases the revenue. Expansion must be committed to. It is not just a logical step, an inevitable decision.

Marketing

To commit to the expansion of the fleet, other areas of the business must follow suit. Increasing the presence on the roads must be accompanied by an increase in online presence. Social media allows for step-up quite naturally. Utilising multiple platforms, different types of content, and a regular posting schedule will lead to organic development. Additionally, there is an option for paid ads, which will mean the business’s posts and content will appear on the feeds of a targeted audience. Being consistent and responsive is the key.

Back Office and Cloud Computing

‘Drivers’ is the go-to answer to the question of what is the most important employee role in a transportation business. That isn’t an incorrect answer. However, it overlooks a heart of the business: the back office. Having an efficient back office means drivers will get to where they need to be quickly, safely, and reliably with the right people or goods. Cloud computing can help achieve this. It is a booming market, with various services being used by more and more businesses globally. The software enables multiple users to have access to the same records and data with the added bonus of certain processes being automated. All of the processes of organising a fleet made easier.

Importance of Transportation in Supply Chain

Last Updated on By Leave a Comment

Transportation is not merely a means of moving people from here to there, it is much more than that and holds so much importance in other businesses of life rather than just this. Take the supply chain, for example, transportation plays a major role in the supply chain to the extent that the world’s supply chain would have been suffering from great damage and trouble if it wasn’t for transportation.

Must be thinking why? Well, logic is: if transportation hasn’t been a part of the supply chain, then exporting and importing of products, shifting them to the warehouses, and completing their journey to the consumer doorstep would have been nearly impossible.

You may have heard people saying that warehouse is the heart of the supply chain, well I tell you what: they are highly mistaken because it would be much better to give this position to the transportation. Many factors make transportation an integral part of the supply chain. Some of the most important roles of transportation in the supply chain are discussed below.

Synchronization with the Supply Chain Technology

Whether it is the ocean, road, or air freight, with the help of these goods transportation means, you can easily track, monitor, and synchronize with your supply chain. Thinking how come?

Let me tell you that a company is allowed to monitor and handle its supply chain via Transportation Management Software (TMS). TMS helps you ensure timely deliveries of your products by providing you access to monitor daily transportation operations and trading information. Thus transportation helps you a lot to synchronize with your supply chain for good.

Improved Customer Service and Satisfaction

Transportation also plays a great role in maintaining and keeping a company’s reputation. If a company is continuously delivering its products late to the buyers, this means that the company is not very promising and hence this leads the customers into thinking that such a company can never provide them with good customer support who doesn’t even respect the value of time.

While on the other hand, good transportation means enhanced customer service and satisfaction. When the customers will be receiving their products at the right time, they will surely be satisfied and will give only good reviews about your company.

Provided More Options for Supply Chain

We all know the fact that transportation can never be done with a single type of transport mode. Every different nature of the product requires its respective mode of transportation. Therefore, the facility of transporting goods from a variety of different methods plays a most important role in the supply chain of a company.

For example pipelines, transportation media are used to transport gaseous and liquid material from one position to another, whereas heavy types of machinery are transported via ocean through shipping companies. Similarly, the products that are though lightweight but are needed right at the moment are delivered to their owner via air.

Final Verdict

The discussed above was just a little glance at the importance of transportation in the supply chain, there is still much more to be discussed in this field. There are many other advantages and the important role that transportation is playing in the supply chain as well as many other businesses.

5 Benefits of Choosing Professional Sea Freight Services

Last Updated on By Leave a Comment

The value of worldwide seaborne trade has increased over the years. Moreover, Statista reported that the seaborne trade’s capacity of container ships was nearly ten times higher in 2016 compared to when it was back in 1990. The projected global number of containerships is predicted to be about more than 5,500 by the end of December next year.

While shipping goods via sea route may take the longest time compared to the other modes of transportation, Sea Freight Services have several key benefits over other freight forwarders. Here are five of the advantages of choosing sea or ocean freight services to manage your import or export business.

Offer a safe mode for long-distance goods transportation

When it comes to transporting goods over long distances, ocean freight offers the best and most reliable shipping mode. With sea freight services, companies can obtain the additional benefit of having their goods transported overseas under more thorough supervision than the standard services.

Moreover, compared to road transportation, shipping cargo through the ocean minimizes the chances of the goods getting damaged or lost.

Relatively inexpensive

Ocean freight is by far the cheapest option of transportation mode, compared to other types of cargo transportation, such as air freight. Cutting down on transportation costs is a smart way to increase the company’s revenue. Money saved from freight expenditure can be directed towards another essential things contributing to the success of the company.

Lowering down freight costs also allows a company to sell goods at a lower price point. This is apart from helping the company to stay ahead of the competition. So in a sense, sea forwarding can boost profitability.

Moreover, some goods are charged with a more expensive fee if transported by other means than the sea.

Eco-friendly

Companies with supply chain requirements are aware of the impact of freight forwarding service providers on the environment. With the degradation of our natural resources, it is always imperative to try to choose a greener option for cargo shipping.

Likewise, consumers are more informed of environmental concerns and may look for companies that adopt eco-friendly practices in their business.

Since logistics is an essential component of the operation of every business, companies need to watch for their carbon footprint caused by the transportation of goods. Choosing ocean freight services to lead to a lower harmful greenhouse gas emissions.

Other freight forwarding services, on the other hand, such as air freight, not only will cost more expensive, it also releases a considerable amount of toxic gasses.

Can ship large cargo volume and size

Space availability is a significant concern for most businesses, especially if with bulky goods. Fortunately, Sea Freight Services offer great flexibility when it comes to size, dimension, and cargo weight.

On the other hand, freight forwarding services like air freight has a strict policy with regards to the measurement of the goods and may impose certain limitations on particular products.

Better Documentation

International transportation requires plenty of documentation and paperwork. This, in itself,  can be quite challenging for most businesses, especially with the time management and tracking of appropriate documents.

Companies that choose to ship their goods via sea freight allow their documentation team to manage the complicated paper works. This ensures that the shipment is free of hassle.

When you need to ship a large number of goods, sea freight would be the best choice. Aside from offering an efficient and timely mode of transportation, sea freight service is cost-effective, eco-friendly, and can accommodate almost any type of cargo.

Give Your Moving Business the Right Edge with a Freight Factoring Service

Last Updated on By Leave a Comment

Freight invoice factoring is one of the golden buzz words in the shipping industry for managing cash flow effectively. Not only does the service provide your business with the right solutions, but it is one crucial step to getting payment discounts within a short period.

Many moving businesses, regardless of their size, find a freight factoring service beneficial because they reap the rewards for having back-office support. These companies primarily function to provide operational backing and immediate cash flow assistance.

Not only will freight factoring organize your entire operations, but the service also provides your company with the efficiency to manage billings and collections without exerting too much effort.

Some Important reasons why you should consider Factoring

In today’s business environment, where efficiency spells the difference between success and failure, finding freight factoring for your moving company spells the difference. Consider that OTR Capital is all about sustainability and the reliability to manage your cash flow.

Freight factoring is all about being prepared for some eventual necessities your company might experience. Take, for example, repairs, fuel consumption tracking, and payroll checks.

These are essential operational expenditures your company needs to manage well. By selling your invoices upfront, you are guaranteed full support for your billing and collection needs. A freight factoring service is also one right way of filing cash flow gaps, which often become a significant operational hindrance for transport companies. 

By having your invoices factored, your company expenses are covered during eventual needs. It is one of the most effective business financings for any shipping company as they get the needed monetary backing for slow-paying customers and freight bills.

Some of the reasons for considering freight factoring include

  • Get a comprehensive commercial creditworthiness check for your prospective shipper or client.
  • Quickly increase your customer base.
  • Get access to better commercial financing and cash flow so your company can take more loads.

Focus on your core Operational Needs

Late-paying shippers and customers are often a stumbling block for most trucking service providers. In most instances, this means the inadequacy of financing other trucks and get them the needed funding.

This is what freight bill factoring tries to address, allowing trucking personnel to get a sustainable monetary backing to finance their operational needs. The primary consideration with freight factoring, though, is getting a reliable partner who seeks the betterment not only of their company, but also yours.

Factoring removes the burden of collecting payments from late payers. And once payments are settled, they are considered closed. This tactic removes all the pains of dealing with your customers for the entirety of their invoice.

It is a crucial element of sustaining your company’s momentum and removing all the unnecessary tasks that often becomes a drudgery to most trucking companies. Nascent companies who are trying to cut their expenses can also benefit from the services provided.

Extend your resources by removing unnecessary Collection Tasks

One concept of eradicating unwanted collection pains and headaches is to have you outsource your receivables to reliable freight factoring companies. This process allows you to get immediate payment for the outstanding invoices related to your completed works. It brings your working capital back so you can move on with your operations.

Import Procedure

Last Updated on By Leave a Comment

The interchange of commodities between two or more persons who extract or produce them and who actually consume directly or indirectly is known as trade. In other words, it includes all those activities which are engaged in transferring title of the goods from the producers to the consumers using any trade or distribution channel.

Trade is a very important part of commerce and it also includes those factors which help to remove personal hindrances in exchange of goods. Another important function of trade is to serve as an intermediary between the consumer and the producer.

As an economic activity TRADE also means carrying the goods from the producers to the place where the goods are in demand. The wholesalers, retailers and different agents play a vital in transporting goods from first place to the second.

The person who is engaged in removing the title of the goods from the producers to the consumers is known as a trader. Exchange of goods from one man to another is taking place under the guidance are supervision of the trader. He collects goods from the producers and transfers them to the consumers.

Classes of Trade

Trade is carried out both within the country and outside the country. Within the country trade (HOME TRADE) has the following two kinds:

  • WHOLESALE TRADE
  • RETAIL TRADE

Trade with the foreign countries (FOREIGN TRADE) has following three types:

  • Import Trade
  • Export Trade
  • Re-export Trade

Classification of Trade

trade classification

Home Trade

Home trade is a system in which the function of buying and selling the goods is performed by certain traders within a country. It is also named as domestic trade or internal trade.

Whole Sale Trade

The wholesale trade is concerned with the buying and selling of goods in large quantities. He thus forms a link between producers and retailers.

Retail Trade

Retail trade is concerned with the buying of goods in small volume from the wholesaler and selling them to the ultimate consumer. The retail trade includes small shops, stalls, hawkers, departmental store, mail order business and multiple shops. The retailer is the last link in the chain of distribution. He is the middleman between the wholesaler and the consumer.

Foreign Trade

Foreign trade means trade between countries. The refers to that branch of trade which takes place when goods are exchanged between the buyers and sellers of the two countries.

Import Trade

It consists of bringing foreign goods into the country for home consumption through a legal import procedure.

Export Trade

It refers to the supply of the country’s products to foreign countries using an export procedure.

Re-Export Trade

In this type of trade goods are imported for the purpose of re-exporting them to some other country. This class of trade is also described as Trans-shipment.

Procedure of Importing

The importation of goods from foreign country necessarily involves a certain amount of detailed regulation. Which the individual importer, and the foreign exporter, must consider. The method of procedure of importing from abroad is as follows

Import Licensing

All imports of goods into this country must be cover by an Import license issued by the State Govt. This license is generally issued for restricted quantities of goods. Sometimes a trader may obtain permission’ to import unlimited quantities of a commodity. The purpose of the licensing system is to preserve a balance between imports and exports.

Placing of the Order

The trader sends an order or indent to the exporter stating the full particulars about the goods he wants, the price or the rate of the price he is prepared for same and the time when he requires them. Tenders are never invited either from the manufacturers or from the various shipping house in the foreign country because that will give publicity to the order which might be prejudicial to the interests of the importer. Strict secrecy should be maintained with regard to the order.

Opening a Letter of Credit

A letter of credit is the most essential document. It is opened by the foreign buyer (Importer) through his banker in favour of the exporter after the order has been accepted.

Booking of Exchange

After this, the importer has to book the rate of exchange at which he will be required to pay in home currency for the bill drawn upon him by the exporter in order to avoid heavy fluctuation of exchange rate. The exchange brokers are there to help the importer in this connection.

Advice of Shipment

After booking the exchange, the importer has not much to do until the arrival of the goods at the port of his country. In the meantime, the agent, or the branch of the exporter’s bank in the importing country informs him of the arrival of the documents leading to delivery of the goods so that he can arrange for the payment of the bill of exchange in time.

Payment of the Bill

The agent or the branch bank of the country of exporter will present the bill of exchange along with relative shipping documents to the importer. The bill will be paid at the rate of exchange already booked. If the importer cannot meet the amount of the bill, he can arrange for its payment with his banker who will help him on a reasonable rate of charge.

In that case, the banker will ask the importer to give a letter of HYPOTHECATION and the bill of lading in his favour.

Delivery of Goods

Good imported into his country must be cleared through customs and may be subject to duty or taxes. If the goods are duty-free, the importer has not to face any problem for their delivery from the customs people. Delivery will be allowed after the usual examination and the importer will collect and take the articles to his godown. If the importer is not in a position to clear the duty, three courses are open to him.

In that case, he might either elect to warehouse the goods in the customs, or Bonded Warehouses and pay the warehousing charges, or arrange with his banker for payment of the amount in exchange for some security or a LETTER Of HYPOTHECA TION whichever step is convenient to him.

Dispatch of Goods by Clearing Agent

Generally, the goods imported are cleared by the clearing agent of the importer at the port. After duly satisfaction, it will be dispatched to the importer by goods using any transportation mode.

At the same day, receipt and other necessary documents will also be posted to him by clearing agent. After receiving these documents the importer will arrange to handle his goods from the authority concerned.

Common Carrier

Last Updated on By Leave a Comment

A “Common Carrier” is one who holds himself out as ready for hire for transport of goods of all persons from one place to another, by land, sea or air, for reward. He must do his work as a business and not as casual occupation.

Section 2 of the carriers Act 1865 defines a “Common Carrier” as “a person, other than Government, engaged in the business of transporting for hire, property from places place by land or inland navigation, for all persons indiscriminately”.

Kinds of Carrier

  • Common Carrier
  • Gratuitous Carrier
  • Private Carrier

Common Carrier

A common carrier owes a public duty to transport goods upon offer of payment. He is liable in damages for refusal to carry goods upon an offer of hire; however, common carriers may rightfully refuse to carry goods under proper circumstances.

Gratuitous Carrier

In this kind of carrier one person undertakes to carry passengers or goods without any charge. If a “Gratuitous Carrier” refuses to accept goods or passengers, no action may be taken against him. But when he gives his consent to cary goods or passengers, he will be liable in damages.

Private Carrier

Where a person carries goods occasionally or by special agreement, he is known as a Private Carrier. He has the responsibility of a bailee and negligence must be proved to make him liable for loss or damage.

At present many of the larger industrial and commercial concerns transport their merchandise by means of their trucks or vans. They are a private carrier.

Where a private carrier accepts goods under individual contracts, he is called a contract carrier.

Common CarrierPrivate Carrier
Those who carry goods are passengers for all and sundry who choose to employ them and are willing to pay the reasonable rewardThose who undertake to supply transportation in special instances and upon special arrangement
The common carrier is controlled under the carrier Act 1865Its activities are governed by contract Act 1872
He is liable in damages for refusal to carry goods upon an offer to hireHe is not liable in damage in case of refusal for transporting
Where he undertakes by special agreement to carry that which he is not under an obligation to carry, he becomes a private carrier as to those goodsThis carrier is not a common carrier for another carrier
As he renders valuable services for all groups of society, its business is to be affected with a public interestHe carries goods for special group of persons by special contract
A common carrier must do his work as a regular business and not as a casual occupationPrivate carrier perform his services occasionally and not as a regular business
It has to serve all indiscriminately and no right to reject the goods offered for conveyancePrivate carrier can discriminate. He reserves the right to reject goods

Duties of Common Carrier

Acceptance for Carriage

He is bound to carry all goods offered to him for carriage by persons willing to pay his hire.

Deviation

A carrier must follow his customary route and must not deviate from it without cause.

Goods Delivered in Time

The carrier must deliver the goods within the time expressed in the contract for delivery or within a reasonable time. He is liable for any delay caused by his negligence.

Goods Delivered to Right Person

He has a duty to deliver the goods to the right person and is liable if he delivers them to another.

Safely Transportation

He must carry the goods safely and deliver them safely to their destination, which may be stipulated in the agreement.

Notice for Declaration and Extra Charges

The carrier must serve a notice where the goods are received drawing attention to the need for a declaration a giving the scale of extra charges, and must give a receipt for the extra charges.

Rights of Carriers 

Right of Lien

Common carrier’s lien entitles a carrier to retain goods delivered for carriage until freight and storage charges are paid.

Right to recover Expenses

He has a right to recover reasonable expenses incurred by him as a result of the consignee’s refusal to take delivery.

Right of Action

Carrier has a right of action for recovery of the goods or their value from the person who wrongfully accepted the goods.

Right to Recover the Cost of Carriage

He is entitled to demand the cost of carriage when the goods are delivered to him and if this is not paid, he may law fully refuse to deliver them.

Right of Refusal

He can refuse to carry goods when

  • There is no room for the goods in this conveyance.
  • The goods are not of the type that the carrier transports;
  • The goods are not properly packed;
  • The goods are of dangerous nature;
  • The consignor is not prepared to pay reasonable charges;
  • The carriage involves a rout on which he does not usually operate.

Right of Selling Goods

After giving notice to the consignee he may sell perishable goods.

Right in case of Non Disclosure

He is entitled to recover damages or loss from consignor caused to him due to nondisclosure of any necessary facts in the goods.

Right of Limitation of Liability

Common carrier may also, by a special contract with the consignor, limit his liability in any particular way.

Liabilities of Common Carriers

Liability for Delay

The common carrier will be liable for any damage caused by its delay.

Liability for Delivery

The carrier will be liable for an erroneous delivery regardless of the reason for misdelivery.

Liability for the safety of Goods

He is entirely responsible for the safety of the goods carried except when the loss or damage arises from:

  • An act of God
  • Inherent vice in the goods themselves.
  • Acts of the enemies of the state.
  • The consignor’s own fault.
  • An acts of Public Authorities.

Liability for Injury

He is liable for injury to the passenger’s person only if guilty of negligence.

Liability for Scheduled Goods

Common carrier is not liable for loss or damage to specific kind of goods shown in the schedule such as gold, silver currency notes and precious stones etc, exceeding USD. 100 in value, unless its value and description are properly disclosed to him before.