HAULAGE BUSINESS IN NIGERIA (DETAILED GUIDE)

Haulage means transporting of goods (products) from one place to another. This distance (mileage) between the places of origin to the final destination is what the haulage business charge for. The Haulage business is therefore, simply the business of making goods available when and where they are needed.

Haulage starts from the point of extraction or loading to the point of delivery of the goods (products) for the satisfaction of the final consumers.

Goods that are usually carried include:

§  Petroleum products such as Premium Motor Spirit (PMS), Dual Purpose Kerosene (DPK), Automotive Gas Oil (AGO), Low Pour Fuel Oil (LPFO) and other Petrochemicals.

§  Building materials such as sand, clay, granite, cement, iron rods etc.

§  Agricultural products

§  Containers/cargoes from the ports

§  Heavy duty equipment like generators, transformers, pole etc

§  Solid minerals and other finished products

§  Commodities like sugar, flour, salt etc.

Haulage distance charged can be within the state of operation e.g. Lagos and is called (Local) or outside the state called (Interstate) or within a geographical region e.g. Southwest, South south etc.

The Economic Importance of Haulage Business

Haulage involves the movement of goods by both rail and road, but since the collapse of rail system in Nigeria, road haulage has taken the lead. The country has enough population and a good network of roads linking the 36 states and Abuja, though not in very good condition.

The transport sector is an important component of the economy impacting on the development and the welfare of the huge population of about 140 million. When transport systems are efficient, they provide economic and social opportunities and benefits that result in positive multipliers effects such as better accessibility to markets and additional investments. Transport also carries an important social and environmental load, which cannot be neglected.

Haulage Has The Following Importance

1. Moving of material from the natural stage.

2. Conveying raw materials to the factory and helping the producers to convey their goods to wholesaler or distributors.

3. Helping the producers to reduce the content of the warehouse. An efficient transport system offering cost, time and reliability advantages permits goods to be transported over longer distances. This facilitates mass production through economies of scale because larger markets can be accessed. Thus, the more efficient transportation becomes, the larger the markets that can be serviced and the larger the scale of production.

4. Helping the wholesalers (distributors) to get their purchased goods to their stores. Improvement in the efficiency with which firms have access to raw materials and parts as well as to their respective customers. Thus, transportation expands opportunities to acquires and sell a variety of commodities necessary for individual and manufacturing systems.

5. Increased competition. When transport is efficient, the potential market for a given product and or service increase, and so does competition. A wider array of goods and services becomes available to consumers through competition which tends to reduce costs and promote quality and innovation.

6. Increase land value: Land which is adjacent or serviced by good transport services generally has greater value due to the utility it confers to many activities.

7. Haulage also contributes to economic development through job creation and its derived economic activities. Accordingly a large number of direct (freighters, managers, shippers) and indirect (insurance, finance, packaging, handling travel agencies, transit operators) employment are associated with transport.

Producers and consumers take economic decisions in products markets, cost, location prices which are based on transport services, their availability costs and capacity.

8. In conclusion, haulage makes goods and services available where and when they are needed. It provides market accessibility by linking producers and consumers.

Types of Haulage Business and Vehicles Required

This means the different sections of haulage business one can venture into depending on one capability and other factors. The type of vehicles or equipment used in haulage business differs on the type and nature of haulage.

Quarry Breaking

This involves the use of heavy equipment to break mass deposit quarry into smaller granite sizes. In a quarry site which has been acquired by a quarry company with license from the government to break and sell to the public. These equipment, most often are been rented from leasing company and a certain amount is paid at the end of the month as per contract agreement between the two parties. The quarry breaker is the equipment used. It is costly; hence it is usually purchased by leasing companies or banks and rent out to quarry companies.

Tipping Haulage

This is the use of tippers of different sizes to transport granites from quarry site or sand from the leave or sea for use in construction industries/sites. Tipping trucks or dumping trucks are used to convey granite or sand. They are usually in 20 or 30 tons capacity.

Pay Loading

There is the business of using tractors to load granites for trucks at the quarry site or sand at the lake. Pay loader is capital intensive and as a result many investors ignore it, but it is a money spinning investment.

Craning Haulage

These are equipment use in lifting and transporting of heavy duty equipment like construction equipment, poles, transformers, generators etc. the craning truck has dual purpose, it is use to load and transport cargo.

Tankering (Petroleum Haulage)

It is transporting of petroleum products such as kerosene, diesel, petrol, and other petroleum products from depots to their required destinations to satisfy the final consumers. You are bond to make fortune in this section of haulage business because Nigeria is an oil producing country, so there will always be job for you.

There are various capacities and sizes of tankers with capacities ranging between 5,000 – 20,000 liters are used to transport basically diesel and kerosene. The larger capacity tanks 30,000 – 46,000 capacity, however, can be used to carry any of the petroleum products.

Trucking Haulage

This is the commonest type of haulage business. And it involves the use of different sizes of truck to convey goods, containers, cargo etc from one place to the other until it gets to the final consumers destinations.
Different tonnage of trucks is used for different purposes.

Haulage Business Proposal

The market for haulage is wide; hence demand for the services is always per seconds. As a result of the high rate of importation the demand for the dispatch of containers boxes is high. Also with the current form or our refineries that rely heavily on the importation of petroleum products the demand for petroleum products haulage is high. Hence our proposal is based on TANKERING & TRUCKING.

Trucking

Trucks for container haulage can be short framed. Trucks for 20 feet containers or ling framed trucks for the 40 feet containers. The cost varies between N3m – N12m depending on the size and age of trucks.

The Market

The users of truck services are: companies, individuals, agencies among others.

The Requirements

You will require the following for container haulage:
Tractor: Which is the head, the truck itself
Body of the truck: The flat bed where the container boxes will sit on
Fourteen tires

The Net Income

The Return On Investment (ROI) is high because the patronage is always there. The haulage is a 6 days a week, 30 days in a month and 365 days in a year.

The rate of income is also based on the turn around time of the truck. Because of the constraints such as traffic congestion on the road, mechanical faults, etc one could experience a little hiccup. But, with proper management, the haulage service is a high yielding investment enterprise.

The Income Analysis

The port management services expects a trucker to go at least two trips of dispatching containers to allocated bonded terminals outside the ports.

Per trip, the truck is paid between N15,000 – N16,000
Running cost per trip is around N6,500
Projected profit per trip N9,500

N9,500 per trip x 2 trips per day N19,000 per day
N19,000 x 6 days N114,000 Per week
N114,000 x 4 weeks N456,000 per month

This is monthly income within Lagos.

For trucks plying within the southwestern zone
Add 50% of the monthly income

i.e. N456,000 = N228,000

Monthly return = N456,000 + N228,000 = N684,000

Therefore monthly income for trucks plying the
southwestern axis will be N684,000

annual income = N684,000 x 12 = N8,208,000
Less 30%
Depreciation/Maintenance = N2,462,400

Annual Net Income N5,745,600

The Income Analysis For Tankering

For trips within Lagos, a medium size tanker charges between
N30,000 – N45,000

Let’s assume N35,000 per trip
For an average trip an expense of N6,500
Net profit per trip N28,500
An average of 20 trips per month N28,800 x 20
N570,000

Annual income N570,000 x 12 = N6,840,000
Less 30 %
Depreciation/ Maintenance = N2,052,000
Net Annual Income = N4,788,000

Popular Risks in Haulage Business

Just like any high yielding business, haulage has it’s own problems too. Some of the challenges facing this business opportunity are:

§  The Drivers: This is a major problem with this great business

§  Your manager

§  The state of your truck

§  The Mechanic handling the repairs of the truck

Winning Tricks

The solution to these problems are:

§  Get a good driver, or put you truck under a fleet manager that will take care of the running of the truck on your behalf at an agreed fee.

§  Tracker: If you put all your trucks on a trucker, the moment your driver put on the ignition for the day you will get all his movement through, text messages.

§  You can also seek the service of an experience mechanic to inspect your trucks before purchase. Also seek counsel from people already in the business.

Have a central mechanic to do all your repair jobs. Also to ensure that all your trucks are of the same brand.

FEF: Darlinton Omeh - Constative