The profit margin in transport business in India is 10% - 25%. However, that differs with types of transport business in India.
Profit Margin - 8% - 9%
Generally, couriers are small time-sensitive shipments. Moreover, they focus on fast and door-to-door delivery.
For this purpose, they may use either self-owned, privately shared or public transport.
On the other hand, freight trucks are usually high volume and provide large shipment services. Thus, they may use road, rail, ocean or air for this purpose.
Besides, they are mainly used for commercials within the country and globally as well.
Profit Margin - 12% - 13%
The air transport service is a commercial service that transports persons, personal belongings, luggage, goods and cargo from one place to another by aircraft.
Besides, the air transport in India is managed by Air India and Indian Airlines. Also, to provide air transport service in India, you must get approval from The Airport Authority in India.
Profit Margin - 35% - 40%
It is one of the most in-demand transport businesses in India as well as globally.
Most importantly, it has a better profit margin in transport business in India, than any other.
Further, there are many ways in which you can provide this service:
Companies like Zingbus have gotten into the shared cab system.
For example : They run daily cab services between Alwar and Delhi.
The profit margin in transport business in India is 10% - 25% on average.
But, you will have to work wisely and keep monitoring your employees regularly to get the actual profits.
Suppose, you provide truck service to a company on a monthly basis.
After deducting all the expenses, maintenance and fuel cost, your estimated earning will be around Rs. 40,000 to Rs. 85,000 per truck monthly.
Generally, the companies sign an annual contract with the transport companies to hire their service for the full year.
For this purpose, you can either rent a truck and keep the commission. Or, you can invest in good trucks and recover the cost with profits.
|TRUCK||PRICE||LOAD CAPACITY||FUEL TANK CAPACITY|
|Mahindra Truxo 31-202 HP||Starting from Rs. 21.8 Lacs||25,000 Kgs||350 Ltr|
|Tata LPT 3723||Starting from Rs. 25 Lacs||27,000 Kgs||400 Ltr|
|Eicher Pro 6000||Starting from Rs. 19 Lacs||20,000 Kgs||220 Ltr|
|Ashok Leyland U 3718||Starting from Rs. 33 Lacs||31,000 Kgs||400 Ltr|
|Isuzu IS12TE||Starting from Rs. 12.5 Lacs||7700 Kgs||180 Ltr|
The investment to start a transport business in India will depend on the following factors:
However, you will need a minimum investment of Rs. 20 Lacs to start a transport business.
Here is a list of the main costs to start a transport business:
With this in mind, the following are some sources of investments for a transport business in India:
The minimum area required to start a transport business in India is 1000 sq ft.
You will need approx 80-100 sq ft. to set up an office for meetings and monitoring. After that, the remaining area can be used for storage, processing and parking.
Moreover, you will have to avoid crowded places for storage and parking.
But, you will have to set up an office in a visible area to let people know about your presence.
Also, you can rent the office initially.
The rent may be approx Rs. 6,000 - Rs. 20,000 (depends on area and city).
You can hire a broker for this purpose. Besides, it will help you to identify the response and visibility you are getting in that area.
If the results are unfavorable, you can easily change your office.
In a transport business, if you are starting with 2 - 3 trucks, you will need around 20 people initially.
With this in mind, your monthly expense on the following could be anywhere between Rs. 1 Lac to Rs. 2 Lac.
The transport sector in India contributes 6% to the country's GDP. In fact, it has the second-largest road network globally.
Besides, the transport industry is full of small players.
Thus, it does not have a very high profit and even requires a huge investment, but it will help you generate a regular income.