Deciding to go it alone – start your own courier company

Posted by Tim Gilbert in Courier Operations Manual, Courier prices on Feb 15th, 2011 | 0 comments

In the old days, and I mean before-fax-machines-came-along sort of old days, you could set up a courier company with just a pen, a reporter’s notebook, an ashtray and a kettle for the couriers, an old van to do some of the deliveries in, and a typewriter for the invoicing. A few cards around local offices, and you’d soon be delivering urgent letters for local businesses.

How times have changed.

Since then, the same day courier industry has had to adapt to survive many changes.

Email has replaced the courier for pretty much any correspondence that the fax machine hadn’t already accounted for, and broadband now carries all the data that used to go on tape.

These digital revolutions have changed courier work to carrying “anything which can’t be digitised”, ie couriers are generally now carrying products, not documents.

The products that the express pallet networks and overnight parcel networks haven’t taken, that is.

And nowadays customers won’t stand for scruffiness of any kind, so there’s been a revolution in the appearance of same day couriers and courier companies, with rule now being smart, well-turned-out couriers in smart vans, and imaginative courier company colours.

Locally-owned and managed courier companies with a single control room now find themselves having to compete with large national and regional concerns with an office in every major town.

So what’s the next big revolution? Well, just as the internet has changed the kind of work being carried, it’s also provided the opportunity for far-sighted couriers to succeed.

All same day courier companies, big and small, now compete for the same new business, and those who use the benefits of the internet in the control room will be the winners by miles:

The internet helps you to get the job right every time

Customers now expect same day courier companies to have a courier available, however busy they are. They want your Friday afternoon performance to be as perfect as your Monday performance. They want every part of the country to perform equally well, which is often a real challenge for bigger same day companies who are, in their customers’ eyes, only as good as the weakest office or depot in the group.

However big your operation, if you rely heavily on your “own fleet” of couriers, which is quite slow to grow when needed, your customer will always suffer worse service at busy periods, and is likely to try elsewhere.

Internet-based courier exchanges allow you to keep your own fleet to a sensible size for the amount of work you have, while still being able comfortably to cover all your work even at busy peaks.

The various courier work exchanges between them have 1000’s of members throughout the UK, the majority of them owner drivers, to give courier companies their own virtually limitless “reserve fleet”. So the internet gives courier companies access to many more couriers than they could ever have known in the past, in a much wider area, and more importantly, it allows you to check up on them, without face to face contact.

And in recognition of the obvious anxiety many controllers feel about giving a job to someone they haven’t met, there is often “feedback” available, as there is on eBay. For maximum reassurance many internet-based courier owner drivers will even allow you to track their actual position, using positioning technology which tracks their mobile phone signal or GPS.

So nowadays the internet allows you to have a national fleet of couriers who you know you can trust and track just like your own fleet. And using the internet, you really don’t have to have the cost of offices all around the country to manage them.

Use the internet to prove to your customer that he should stay with you

Customers are now asking that courier companies measure their delivery performance, ie collection and delivery times, and measure them against preagreed “Service Level Agreements”. You need to be offering POD information on-line or you’re not even in the running. The internet allows you to collect lots of detailed information like this, from couriers all around the country. Your couriers enter the POD data, and use that data to give your customers the overall performance summary.

If your customers like your performance, they’re less likely to look elsewhere. The internet allows you to prove to them that they like your performance.

Use the internet to offer 100% national pick-up and delivery coverage

Increasingly, courier companies need to offer national coverage, or they’ll lose out to the big boys at tender stage.

Customers like to buy a range of products and services from what they perceive to be national brands, whether it’s stationery from Office Depot, overnight parcels from Fedex, or cars from their nearest Ford dealer. They’re buying from a locally-owned company with national presence. The same is true with same day courier, so increasingly, you need to look big and act big.

With such massive nationwide courier coverage on offer on the internet at the click of your mouse, courier companies can nowadays be confident of being able to cover a courier job when they’ve “run out” of your own couriers, or if the job is picking up outside your usual area.

So one of the biggest problems affecting courier company growth, getting the balance right between fleet size and the amount of work, is now largely a thing of the past. Thanks to the internet.

Use the internet to offer your customers more value

You have a choice. You can be the courier company they choose because you’re cheap, or the one they choose because you’re slightly more expensive but worth it.

The more basic your service offering, the cheaper you’ll have to quote.

The more you offer your customer, the more you can charge, or at least the harder it is for him to look elsewhere.

The internet allows you to offer you customer more value, such as on-line booking, on-line POD enquiries, national coverage, and instant national delivery performance measurement.

Charge competitive prices while making more profit

If you’re a medium sized courier company with, say, 25 couriers on the road, it’s easy to be put off by the power of the really big companies. With all that turnover, and all those offices, you’d expect them to be able to beat you every time. But think about it. Their local office costs much the same as yours does, they employ the same number of people in the office as you do, and they can’t make diesel any cheaper just by being big.

So locally they’re no more profitable than you, and on top of that, they have the cost of the Head Offices and Area Supervisors and other regional management staff. How many “Regional Managers” and “National Operations Managers” do you employ at the moment? None, probably.

So, you already have a clear head start over the big boys, in the way you are set up. Your costs are lower. The internet allows you to maintain this advantage by covering work in a wider and wider geographical area without falling into the trap of wasting the extra money on more and more offices and staff to run it all.

By giving you access to couriers all over the country, the internet allows you to expand your business without the need for offices everywhere.

So if you get it right, you may well be able to win work from the big boys by offering very competitive prices against them, simply because your costs are lower.

And when a customer asks you “where are you based?”, you can say “we’re based on the internet, which gives us couriers all over the country at great prices”.

All of this is the reason why modern courier operations are now competing as much on the internet as on the road.

Once you’ve made up your mind to build a courier business of your own, the first thing you’re going to need is some customers of your own. Up to now, your customers have all been courier companies, middlemen, who have stood between you and some of the realities of finding and dealing with the “end user”, the customer. This is where the money is bigger, if you get the job right.

As you will have gathered, they play a useful role in getting the customers, taking on the work, sharing it out, paying you before they get paid, and generally taking on most of the risk. As an owner-driver courier, you will have benefited from all this, so you will have seen how much risk and work is involved. If you’re sure you want to move out of the relative safety of being an owner-driver courier into the riskier world of becoming a courier company, start here. The following sections will give you some ideas as to how to plan and carry out the sales campaign which you’ll need to do to get some customers of your own.

It’s a formula.

“Man who say it cannot be done should not interrupt man doing
it.” (Chinese Proverb)

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