Think about it: anything you use or consume got to you by way of truck. It’s not surprising, then, that such an in-demand industry would lure the hopes of entrepreneurs who are looking for a lucrative business opportunity.
However, there’s a lot to know about the freight and cargo industry. It has a million arms and legs, sprawling far and wide across air, water, and land. It spans cities, states, countries, and continents. Where does one even begin with launching a startup company?
If you’re curious about business in this line of work, here are some things to keep in mind before jumping headfirst into your next venture.
Your accountant’s transportation knowledge impacts your bottom line
We’re big advocates of hiring an accountant for your business; it frees you up from focusing on the little numbers so you can work on the big picture. But in this case, you need to be extra careful about whose help you enlist.
Proper transportation accounting reduces freight costs so you can drive profit margins, expand your reach, and scale your company. The finance pro you bring on should know the difference between freight inwards and outwards, as well as whether freight-in costs are considered part of the costs of goods sold.
Here are a few key components of freight and transportation accounting that they will need to be especially mindful of:
- Freight quote
- Freight cost
- Freight invoice
- Freight and transportation invoice auditing
- Freight payment
- Freight invoice consolidation
- Understanding freight-in and freight-out
Carefully tracking these figures helps identify missed opportunities so you can minimize transportation-related costs and put valuable resources back into your bottom line.
You’re going to need logistics tech solutions
With so many moving pieces in the puzzle, a successful enterprise will fundamentally depend on a transportation management system (TMS) that can assist brokers, shippers, freight forwarders, and Third Party Logistics (3PLs) providers with managing their business.
TMS can give you the full visibility into the flow of data—and the tools to act on that data—by providing:
- Better carrier management
- Automated exceptions and faster responses to service disruptions
- Clear insight through workflows
- Improved AR/AP capabilities
- Automatic identification of shipment problems
- Increased efficiencies by location
- Profitability measured by customer
- Real-time margin calculations
21st-century technology is changing the landscape of so many industries and freight is no exception. You’ll need to find a platform that’s rich with features, is highly scalable, offers a user-friendly design, and comes backed by support from experts in the field.
Cyber attacks pose a big threat in the transportation sector
When people think of cargo, they envision stacks of pallets packed to the brim with all sorts of physical goods en route from one location to the next—as opposed to some swirling cyber-mall resonant with ecommerce sites. That’s why you might be surprised to learn that the trucking industry has become one of the top targets of a cyberattack.
Unlike online cyberattacks, though, these hackers aren’t after consumers’ credit cards or sensitive information; they attempt to hijack vulnerable IT systems and the data transportation companies need to function. They hold it hostage in exchange for ransom, similar to the hacker who seized Petroleos Mexicanos’ computer systems in exchange for $5 million last November. Just a month before, the cost of small business cyberattacks rose to $200,000, illustrating that it’s not just these big, global enterprises that are vulnerable to extortion through cyber crime.
To protect your IT system, invest in a security system specific to your freight business. For example, if you transport by sea, find a maritime cyber security solution that can offer key benefits such as:
- Analysis of cyber security posture
- Assessment of protection of critical assets aboard vessels
- Determination of proper IT/OT infrastructure configuration according to best practices
- Identifications and mitigations of misconfigurations, vulnerabilities, insufficient controls, and improper procedures
- Recommendations to strengthen security levels
There is a lot of motivation behind why a cybercriminal might attack a maritime freight, which was, until recently, seen as an “invisible industry.” Everything from stealing money directly, to interrupting the exchange of information, and causing disruption or loss pose large concerns for stakeholders.
We can rest assured that the economy’s supply and demand will never cease to exist. The freight industry is booming—backed by these transportation tech and tools, you can position yourself to cash in on the profits.