15 Dec Freight Forwarding Business Plan
The Challenges of Writing a
Successful Freight Forwarding Business Plan
Joorney Business Plans Writers have extensive experience working with freight forwarding companies and understand the challenges of writing a successful business plan to support the visa applications or raise capital from investors. The U.S. transportation sector has seen increased annual output as a result of industrial, retail, and trade activity increases which have spiked the demand for freight forwarders, shipping agents, and customs brokerages. According to IBISWorld, over the five years to 2017, the number of industry operators increased at an annualized rate of 3.5% to 80,350 companies in the U.S. alone. Many of the freight forwarding clients for whom we write business plans already have established businesses in countries that are trading partners of the U.S. and are looking to expand their business and increase profitability.
Joorney Business Plans products are tailored to the specific needs of each client and honor the unique characteristics of each forwarder’s operations such as transportation methods, payment options, distance and destinations, cargo weight and volume, types of commodity being shipped, and more. Our extensive experience in dealing with all types of freight forwarding companies, as well as our experience in writing for different types of audiences such as the United States Citizenship and Immigration Services (USCIS) and institutionalized or individual investors, helps us streamline the process of writing a business plan.When drafting a freight forwarding business plan, there are several issues to address:
Freight forwarding companies often specialize in imports and exports from specific counties. Oftentimes, these companies have a network of affiliate companies, agents, and local offices for local delivery or pickup in other countries. Additionally, freight forwarding companies often rely on several partners for the multiple modes of transportation needed to ship freight to its destination.
Accountability and Accounting
A freight forwarder arranges the transportation and storage of freight on behalf of their customers and uses carriers to transport the freight. Unlike brokers who do not take possession of the freight, freight forwarders take charge of the cargo and are responsible for insuring it. Freight forwarders must apply to the Federal Motor Carrier Safety Administration (FMCSA), the industry operating authority, as a freight forwarder in interstate or foreign commerce known as Form OP-1 (FF). The freight forwarder then issues bills of lading to shippers and are responsible for the loss of or damage to the goods.
For a freight forwarder, revenue is recognized on a gross basis. Unlike brokers who recognize as revenue either a commission which is a fixed percentage of the freight handled (in terms of volume handled) or a pre-determined cost plus margin mark-up to facilitate the client’s business, freight forwarders report both the cost of goods and sales.
Joorney Business Plans has created many financial projections for freight forwarders and understands the specifics pertaining to this business. Using its comprehensive experience obtained from writing business plans for numerous clients from Freight Forwarding Industry, Joorney Business Plans is able to increase the accuracy of its financial projections, adding real value to business plans.
Forwarders incur many costs including transportation, warehousing, port charges, insurance, handling, documentation, and other legal fees. New operators in the industry might need help estimating expenses for their business. Joorney Business Plans uses market statistics to project the expenses that fall within the industry’s averages for the specific areas and present the clients with the best estimates.
Market and Industry Analysis
A complete market and industry analysis is the cornerstone of a successful business plan. When writing a freight forwarding business plan, it is of upmost importance to explain how your business model corresponds with today’s market. Increasingly, freight forwarding companies heavily depend on the choice of the specific niche to operate in. As manufacturers and distribution companies become more inclined to partner with multiple niche logistics providers, maintaining expertise in specific verticals, operating regions, technology offerings, or service capabilities becomes essential for freight forwarders.
More often than not, our clients have experience dealing with specific commodities such as livestock, temperature sensitive perishable goods, hazardous materials, and fragile items; transportation modes such as air, water, rail, road, and off-road transport; geographic locations and routes; types of cargo such as container cargo, liquid, dry, and breakbulk, ro-ro; and/or size of cargo such as less-than-truckload, partial truckload, full-truckload, oversized load. Based on their experience and taking into account market insights, our clients create strategies to grow sales in these specific niches and need help to elaborate and support their strategy with solid data.
Joorney Business Plans has access to in-depth content from IBISWorld, the most comprehensive collection of industry market research and industry risk ratings and Statista, statistics and studies from more than 18,000 sources. We use data from this and other comparable sources to create an overall view of the freight forwarding industry’s current state and operating conditions. This allows us to frame the rest of the information provided in the business plan around these findings, further supporting feasibility with data.
The Company’s Writers include an in-depth look at the transportation market, trading trends, potential market size, competition, and forecasts in all freight forwarding business plans and help the clients transform their ideas into compelling business propositions supported by real life data.
Human Resources linked to the Strategy
The success of logistics operators depends decisively on the quality and qualifications of its employees. This prerequisite will not decrease but increase in the future. A successful business plan needs to provide information about the freight forwarding company’s team and how the strategy will be implemented through the efforts of the company’s employees. Many of our clients already have management teams in place that include successful individuals with extensive experience and impressive curriculums. In these cases, the biggest challenge for the Business Plan Writer is to align the existing management team toward a common set of goals and to secure that the connection between the company’s human resources and the company’s strategy remains strong and apparent throughout the entire business plan.
Joorney Business Plans takes great care in developing employee plans, describing the duties of each employee in detail, and linking the proposed individuals’ knowledge and experience to their designated roles.
When writing a business plan for a freight forwarding company, it is important to demonstrate the value that the company will bring to its customers. Differentiating the service and identifying a specific market niche in which the company will operate are two requirements that determine whether the business will be viable in the long run.
When drafting a business plan to support applications with investor immigration, bank and SBA loans, and investors, each freight forwarding company should address the accounting principles that need to be honored when projecting the financial performance of the company.
The business plan needs to provide a detailed strategy that is linked to the company’s employees, a comprehensive market analysis that describes the state of the industry and competition, and estimate the demand and the size of the market that the company plans to address. Demonstrating the strengths of the company and the feasibility of its strategy are of utmost importance when writing any business plan.
Using its extensive experience in the freight forwarding industry, Joorney Business Plans combines the most recent and data supported market analysis, comprehensive competition analysis, marketing and strategy plans tied to the human resources of the client, and viable and realistic financial projections to create successful business plans.