There exist an outstanding opportunity for those in the transportation business. It essentially involves investing in trucks and tankers and renting them out to major or independent petroleum product marketers to transport their products from depot to their various filling stations.
Haulage involves the transportation of goods. Since the collapse of the rail system in Nigeria, road haulage business has assumed a wider dimension and has become the most utilized way of intercity movement of goods and services.
It is very important to the socio-economic development of any nation and if the vision 20: 2020 of the present administration is to be achieved, the government would have to develop the transportation system.
An efficient transport system is an essential component in the production and distribution of refined petroleum products since most of the products are transport through our road networks.
Statistics have it that there are over six thousand {6,000} independent petroleum products marketers and six {6} major marketers of distributing and marketing petroleum products across the country, with each requiring haulage services.
Nigeria currently consumes an estimated sixty million {60,000,000} liters of refined petroleum products {PMS, DPK and AGO} per day and with population of over one hundred and sixty five million {165,000,000} people, growing at the rate of about 2.7% per annum with an estimated economic growth rate of 5.7% in the past five {5} years, the market for refined petroleum products in Nigeria, is established, growing and sustainable and by effect the market for haulage services.
Indeed, most major petroleum products marketing companies like Mobil, CONOIL, go into long term leasing agreement with truck and tanker hiring companies for the transportation of their products to their numerous filling stations across the nation.
There are three {3} basic way of entering the haulage market and they include
As an Independent Operator
As a contractor or Sub-contractor
Leasing of truck to Haulage companies
Independent Operator:
As an independent operator you operate your truck and seek for contract from the oil marketers and other interested parties on your own and get paid for deliveries made.
As an independent operator, you would do your own maintenance and repair, employ your own driver. You can decide to employ a manager who would scout for goods and also do the day to day running of the business.
As a Contractor or Sub- Contractor:
As a contractor with an oil marketing company, you place your trucks with the company and they would manage it for you, secure the driver and the maintenance and repair and pay you every month an agreed amount ranging between N400, 000 to N600, 000.
Of course, you have to be registered with the company.
As a sub-contractor, you are coming under a contractor in that company to register your fleets as their own and pay you an agreed sum after taking their commission.
It is important that before going into this agreement you study the terms and conditions of the contract with your lawyers.
Leasing of truck to Haulage Companies:
Leasing out the truck to a haulage company is same as being a contractor with an oil marketing company .The only difference is that this time you are going to the dealing with a haulage company instead of an oil marketing company though the terms and condition might not be different .
Again it is important to go with your lawyer.
A lot of haulage companies exist that wants to go into partnership with truck owners.
To participate in any of the above you have to register your truck with the National Union of Petroleum and Natural Gas Workers {NUPENG}.
Just like it would be difficult to place a fixed amount as the start-up requirement, it would be difficult also to state for sure how much to be made from the business because it depends on the method of management the enterprenuer wants to employ.
The amount of start-up requirement would depend on whether you are buying a brand new trailer, second hand popularly known as “TOKUNBO” or buying a trailer head and refurbishing the engine. The cost of a brand new ranges from N 15 Million to N20 Million depending on the brand and capacity while the cost of a second hand ranges from N6 Million to N7 Million.
However, since the enterprenuer would be buying the truck personally, the start-up capital would depend greatly on his/her negotiating skills.
The money to be made from the business depends greatly on the management style the enterprenuer wants to adopt.
If the enterprenuer choices to lease out the truck, he/she can be making N400, 000 –N600, 000 monthly after deducting expenses .If a trailer travels from Lagos to Kano, they charge between N180, 000 to N200, 000 per trip but if it within Lagos they charge between N40, 000 to N80, 000 depending on the distance and the product the truck is carrying.
Opportunities also exist in the haulage of gas.
You can order our detailed feasibility report on haulage business in the downstream sector of the Nigeria oil and gas industry by clicking on the link below.
Report Title: FEASIBILITY REPORT ON HAULAGE BUSINESS IN THE DOWNSTREAM SECTOR OF THE NIGERIAN OIL AND GAS INDUSTRY.
Report Code: FORA/2013/004/63452
Get our market research report on the following related topics by clicking on any of the titles below
1. HAULAGE OF MANUFACTURED GOODS IN NIGERIA THE FEASIBILITY REPORT.
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