How to Start a Haulage Business in Nigeria

This article is aimed at showing you how to start a haulage business in Nigeria. Haulage involves moving heavy goods from one point to another. Haulage practically involves moving goods by land or as it is often said, horizontally. Although the haulage business is a very capital intensive one, it is highly profitable and the demand for haulage services will continue to be on the rise because of the increase in economic activity in Nigeria.

Some of the commodities that are mostly transported are petroleum products, consumer goods in large quantities, machinery and parts, quarry items such as sharp sand and granite, building and construction materials, or it could just be a family relocating from one town to another.

Most of the haulage activities in Nigeria is done by road because the rail transport system is largely underdeveloped. In more developed countries, most of the haulage activities such as movement of petroleum products and large machinery are done via rail.

The underdeveloped nature of our rail way system has also contributed immensely to the attractiveness of this business.

As has been earlier stated, the haulage business is very lucrative in Nigeria. In spite of this, one must also pay attention to the challenges that will be faced in this business especially in Nigeria.

  • High Start-Up Cost

The start-up cost for setting up a haulage business is pretty high. A brand new truck capable of carrying a 40 ft. container will set you back about $8500, shipping excluded. This shows that the business is a very capital intensive one because you will need to buy about four or five in order to be very profitable.

The high cost of starting is one of the major challenges you will face.

See How To Raise Capital in Nigeria

  • Bad State of Roads

Another very important challenge that you will face in the haulage business in Nigeria is the issue of bad roads. It is common knowledge that a vast majority of our roads and highways are in pretty deplorable shape. These roads can cause major damage to the truck and the tires, which can then lead to very expensive repairs and delay in the delivery of the goods, which in turn will not be very good for the reputation of your business.

  • Multiple Taxation

In Nigeria, most haulage activities are taxed by the federal, state and local governments. You will have to contend with the various taxes by the different authorities.

  • Poorly Trained and Dishonest Drivers

A very important component of the haulage business is the truck driver. In fact, the importance of the driver cannot be over emphasized, hence it is important that they are well trained and honest. Sadly, most of the truck drivers we have are either not well trained or are dishonest or both. This has become one of the most challenging aspects of the business for haulage truck owners in Nigeria.

  • Poor Quality Diesel

Bad quality diesel will, in both the long and short term have adverse effects on the performance of your trucks. In Nigeria, truck owners have severally complained of bad and adulterated diesel. Sadly, this is one of the major causes of break downs and major maintenance procedures for the trucks.

At this point, I will like to reiterate that despite these challenges the haulage business is very lucrative and countless number of people have been very successful in it.

Let us now go into the requirements to start up a haulage business.

  • Choose the Haulage Segment You want to Engage In

The haulage business is comprised of various segments like construction, petroleum products, consumer goods, food items, etc. At this point, you have to decide on the segment you want to focus on because this will determine the type of trucks that you will then purchase.

For example, if you want to focus on hauling petroleum products, you will invest in buying tankers, in the case of consumer goods, you will want to go for a truck with an enclosed bucket.

See How To Start a Gas Plant

  • Buy Your Trucks

After deciding the segment of the haulage business you intend to focus on, you can now proceed to buy the trucks that will be most suitable for the business. You can go for either brand new trucks or fairly used ones. It all depends on the amount of capital you have at your disposal. Have it in mind that buying the trucks is the single most capital intensive aspect of the haulage business.

If you do not have the capital for an outright purchase of a haulage truck, you can also go into a lease or hire purchase agreement with a truck dealer.

  • Insure Your Trucks and Goods

It is against the law in Nigeria to use a vehicle on the road without doing the proper insurance on it. However you must ensure that your trucks are insured with a reputable insurance company that can cover you in the case of any unforeseen unfortunate circumstances. It is also very important that you get an insurance to cover the merchandise you will be conveying in order not to incur massive debts on yourself in case of damage.

  • Register Your Business

It is very important that you secure all the necessary registrations before you start off with your haulage business, to ensure that you do not have any hiccups or problems with the law. Failure to properly register the business can lead to serious interruptions in the flow of your business and this can prove to be very financially detrimental. Make sure you have covered all the requirements from all the government agencies that are concerned with issuing haulage permits.

When you have all these in place, your haulage business is well and truly ready to kick off.

You can support these by going on an advertising campaign to let people know more about your business. Printing simple flyers and spreading the word by mouth will go a pretty long way in attracting people to patronize your business.

Another thing you should take special note of is the proper management of the business. Do not overlook things such as truck maintenance or driver training as they could mean the difference between success and failure.

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Ikponmwosa Aikhionbare is a Content Developer at InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Roberts. Page maintained by Ifiokobong Roberts. If you need a personal assistance on this topic, kindly contact us.

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