How To Start A Shipping Business in 14 Steps

How To Start A Shipping Business

Due to its ability to earn significant revenue and the fact that so many businesses import and export, the shipping industry is one of the fastest-growing industries in the world right now.

However, a shipping firm is much more than merely buying a ship and carrying cargo on the water. We must address several complex aspects to ensure the success of the firm. Starting a shipping company can be very lucrative. You can achieve enormous success if you work diligently and plan well. You may read more about how to launch a profitable shipping company below. Here are the steps you must take if you want to start a shipping company:

1. Pick a Name For Your Shipping Company

You have to choose your company’s name before launching a shipping service.

That is a crucial decision because your company name will serve as your brand throughout its existence. The perfect name has to be memorable and meaningful. Here are some suggestions for naming your own shipping business:

  • Check to see whether the name is available. To determine whether a name is available, look into trademark databases and your state’s list of registered business names. Additionally, see if a good domain name is accessible.
  • Ensure simplicity. The finest names are typically simple to spell, pronounce, and remember.
  • Consider marketing. Create a name for your shipping company that accurately captures the desired brand and business objectives.

2. Create A Shipping Business Plan

One of the most critical tasks in starting a shipping business is to develop your business strategy. You can ensure your understanding of your market and business strategy during the planning process. The plan also gives you a road map and, if necessary, a document to show funding sources to secure investment for your company.

The following sections should be present in your business plan:

1. Section “Executive Summary” should summarize your entire business plan so that readers can quickly grasp the essential information about your shipping company.

2. The reader will learn about the history of your shipping company and the type of pack and ship firm you run in the section under “Company Overview“. Are you a freight forwarding company, a third-party provider (3PL), or a courier service, for instance?

3. Industry analysis is where you will compile important data regarding the shipping sector. Conduct market research and describe the size of the sector and which trends are affecting it.

4. Customer Analysis: In this section, you will list the characteristics of your ideal or target customers. For instance, what age are they? Who lives there? What factors do they consider crucial when making service purchases, such as the ones you will make?

5. Competitive Analysis: In this section, you’ll list the main direct and indirect rivals you’ll be up against and describe your strategy for gaining an edge.

6. Your marketing strategy should cover the four Ps: product, price, promotions, and place.

  • Product: Choose and record the goods and services you’ll provide.
  • Prices: Note the costs of your goods and services.
  • Place: Where will your company be located, and how will that decision help you generate more revenue?
  • Promotions: How would you advertise your shipping company to draw customers? For instance, you might utilize social media marketing, search engine optimization, public relations, or pay-per-click advertising.

7. The determination of primary procedures you will need to manage daily operations will be in the operations plan. The anticipated growth timeline you develop in this portion of your strategy will highlight the milestones you hope to hit in the upcoming years.

8. The history of the management team will be in the section “Management Team”.

9. Financial Plan: Finally, the financial plan provides answers to a variety of queries, such as:

  • What beginning expenses might you expect?
  • How will your shipping company generate revenue?
  • What revenue and spending projections do you have for the following five years?
  • Do you require financing to start your business?

3. Select The Legal Form For Your Shipping Company

Choosing a legal structure for your shipping company is the next step. You must then register it and your company name with the secretary of state in each state where you conduct business.

The five most typical legal structures are listed below:

A single-person business

A sole proprietorship is a type of business where the owner of the shipping company and the company itself are the same legal individual. The business owner is liable for all debts and obligations in a sole proprietorship. The sole proprietorship is simple to start and manage and does not require formalities. The most important benefit of a sole proprietorship is how easy and affordable it is to begin one. The biggest drawback is that the firm owner is responsible for all debts and responsibilities.


A common legal structure for small firms is a partnership. It is a deal reached by a group of individuals who intend to launch a shipping company together. The partners split the company’s gains and losses.

A partnership has the benefits of being simple to form and having the partners split the company’s gains and losses. The disadvantages of a partnership include the fact that the partners share responsibility for the company’s obligations and the difficulty in resolving partner disputes.

Limited Liability Company (LLC)

A kind of corporate entity that offers its owners limited liability is a limited liability company or LLC. That indicates that an LLC’s owners are not held personally liable for the debts and liabilities of the company. For a shipping company, an LLC offers management flexibility, pass-through taxation (which eliminates double taxation as will be detailed later), and restricted personal liability. The lack of availability of an LLC in some areas and self-employment taxes are disadvantages.

C Corporation

A C Corporation is a legal corporation that operates independently of its owners. It is tax-exempt and can have shareholders. The fundamental benefit of a C Corporation for a shipping company is that it provides its owners with little responsibility. That indicates that proprietors don’t own the business’s obligations and liabilities. The drawback of C Corporations is that they are vulnerable to double taxation. That implies that the corporation also pays taxes on its profits in addition to the shareholders paying taxes on their dividends.

S Corporation

A type of organization known as an S Corporation offers its owners limited liability protection, as well as the option to carry through corporate income to their income tax returns, preventing double taxation. S Corporations are subject to several limitations, one of which is the maximum number of shareholders they may have.

Your official “Articles of Incorporation” will be sent to you by your state when you register your shipping company. That and additional paperwork are requirements for opening a bank account (see below). We advise you to speak with a lawyer to choose the legal framework that is most appropriate for your business.

4. Obtain Startup Capital For Your Shipping Company (If Needed)

You may have decided that you need to raise money to start your shipping business when creating your business plan.

If so, the primary funding options for a shipping company are to think about our savings, support from friends and family, credit card financing, bank loans, crowdsourcing, and angel investors. Individuals who invest in early-stage companies are known as angels. Typically, angel investors would put money into a shipping company they think has growth potential.

5. Choose An Address For Your Business

You must conduct local market research and choose a site for your shipping company close to major thoroughfares and roadways. Additionally, look for a site that is secure and has a large number of commercial establishments around. Find a place that is both economical and offers the space you require to run your business.

6. File a Tax Return For Your Shipping Business

Next, you need to register your firm with the Internal Revenue Service (IRS), which will result in the IRS awarding you an Employer Identification Number (EIN).

Most banks will ask that you have an EIN to open an account. Additionally, since the IRS uses your EIN to track your payroll tax payments, you will need one to hire employees.

Be aware that you typically do not need to obtain an EIN if you are a solo entrepreneur without workers. As opposed to using your EIN, you would utilize your social security number as your taxpayer identification number.

7. Create An Organization Bank Account

It’s important to open a bank account in the name of your shipping company. The stages involved in this straightforward technique are as follows:

  • Find and contact the bank you want to utilize.
  • Bring together and provide the necessary paperwork, which often consists of your company’s articles of incorporation, a passport or driver’s license, and proof of address.
  • Fill out the bank’s application form and include all necessary details.
  • 4Arrange a meeting to discuss your company’s needs and build a connection with a banker.

8. Apply For A Business Credit Card

To assist you to distinguish personal and business costs, you could establish a business credit card for your shipping company.

You can apply for a business credit card through your bank or a credit card provider.

You must supply information about your company when applying for a business credit card. This information comprises your company’s name, address, and the kind of business you’re doing. You will also be required to submit personal data, such as your name, Social Security number, and birthdate.

You’ll be able to make purchases for your company using your business credit card once it has been approved. Additionally, you can utilize it to establish your credit history, which could be very helpful when applying for loans and obtaining credit lines for your company.

9. Obtain The Business Licenses And Permits Necessary

A business license, a permit to drive a commercial vehicle, and permission to move products are all required. Depending on the type of shipping firm, you could additionally require a license to import or export goods.

10. Get Commercial Insurance For Your Shipping Company

Depending on the sort of business, you may require several types of insurance to run a shipping operation.

You should take into account the following business insurance coverage for your shipping company:

  • General liability insurance protects you against mishaps and injuries sustained while on your premises. Additionally, it covers harm brought on by your staff or merchandise.
  • Auto insurance protects you if a vehicle utilized for commercial purposes is stolen or destroyed.
  • Workers’ compensation insurance: If you have employees, this kind of policy works in conjunction with your general liability policy to protect you from accidents and injuries at work. It also includes missed wages and medical costs.
  • Commercial property insurance protects your investment from loss due to fire, theft, or vandalism.
  • Insurance against business interruption: This pays out if your company must shut down as a result of a covered event.
  • Professional liability insurance defends your company from accusations of professional malpractice.

Find an insurance representative, describe your company and its requirements to them, and they will suggest plans that meet those requirements.

11. Purchase Or Rent The Appropriate Shipping Business Equipment

To establish a shipping business, you will need some key equipment. You’ll need a printer, computer, and scanner to print shipping labels and track deliveries. Additionally, a scale for weighing parcels and a credit card reader for accepting payments are required. You will also need packaging supplies like boxes, tape, and labels.

12. Create Your Shipping Business Marketing Materials

Your shipping company will need marketing materials to draw in and keep consumers.

The following are the essential marketing materials you will require:

  • Website: A professional shipping business website does the same thing by giving potential clients information about the services you offer, the background of your firm, and how to get in touch with you. Importantly, remember that the design of your website will affect how customers perceive you.
  • Establish social media accounts under the name of your business. Customers and others will be able to find and communicate with your shipping company with the aid of accounts on Facebook, Twitter, LinkedIn, and other social media networks.
  • Spend some time creating a quality logo for your transportation company. Print your logo on company stationery, business cards, marketing brochures, and other items. The right logo may improve brand recognition and customer trust.

13. Get The Software You Need And Install It To Run Your Shipping Business

To run a shipping company, you’ll need software. This software consists of inventory management software as well as tools for tracking customers and parcels. Software may also be required to create shipping labels. Make careful to investigate the many software possibilities and select the one that best suits your requirements.

14. Open For Business

You’re now prepared to launch your shipping company. If you followed the preceding instructions, you ought to be in a fantastic position to create a prosperous firm. The responses to some frequently asked questions are provided here for your use.


You can establish a transport and logistics company with little to no expertise by doing a few things. You can do market research to find out about the various shipping services offered. You can collaborate with freight forwarders and other transportation businesses by expanding your network of contacts in the shipping sector. Because there is a low entry barrier, expanding demand for shipping services, and minimal financial requirements, starting a shipping firm is simple.

Express shipping is the industry that generates the highest profits. This is so that customers can benefit from express shipping firms’ quicker and more dependable shipping services.

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