the courier business

an overview of the courier business and what it's like to be an owner driver

by Mike George

what is a courier?

Many people expect courier work to be delivering urgent documents and small packages between offices, maybe using a car or small van.

A lot of the work is like that, but most couriers also carry pallet-loads of goods, and deliver anything from an envelope to an engine.

Some couriers are more like general hauliers - transporting larger loads on regular runs, perhaps for overnight or next day delivery.

sameday couriers

These handbooks are about being a sameday courier. That means you collect and deliver on the same day, usually as an 'express' job.

Customers will pay premium rates for this kind of service, which is why it is feasible to carry dedicated loads on small vehicles. As a general rule you won't be able to compete in the overnight or nextday market, where rates are much lower.

return to top

owner drivers

If you work for yourself and you drive your own vehicle then you're an owner driver (OD).

You don't actually have to own the vehicle - you could lease or hire it - but the main thing is you provide a complete service to your customers: vehicle, driver, insurance, documentation, and so on. So courier companies can use you when they need extra cover, and not have to employ more people or maintain a large fleet of vehicles.

Most owner drivers start by subcontracting for courier companies, rather than having their own customers, but you could also get your own customers as well as subcontracting. The main advantage of having your own customers is that you can get an extra 25% or so above subcontract rates, but there are disadvantages, such as having to have enough money in the bank to pay your 'subbies' before your customers pay you. If you're new to the business it's best to start by subcontracting until you have learnt the ropes.

return to top

freelance couriers

Some owner drivers call themselves freelance couriers, but I recommend that you don't use this term. For various reasons it has come to be associated with an amateurish approach, and some courier companies will steer clear of you.

return to top

is this the right business for you?

As a courier owner driver you'll be running a business - a long-term commitment where you'll be responsible for all your own decisions, and you'll get all the rewards of your hard work.

So how do you know whether this is the right business for you? Let's look at the various things that might be important to you:

return to top

money

Being a courier is not a get-rich-quick scheme. When you're established you should have a turnover of about £400 to £700 a week, and out of that you'll have to cover your costs, such as:

• buying or hiring your vehicle
• fuel, servicing and maintenance
• breakdown recovery service
• insurances
• PAYE and NIC payments
• accountant's fees
• subscriptions to 'freight exchange' services
• interest on loans or overdrafts

A lot of your outgoings have to be paid up front, but it will take time to build up your business, and you usually have to wait 6-8 weeks to get paid, so when you start you'll need enough money to cover your living and business costs for up to 6 months.

return to top

variety

You'll get plenty of variety - driving all over the country, meeting all kinds of people and delivering all kinds of loads, such as:

• a passport from a private house to an airport
• a contract from a solicitor's office to a private house
• a lorry suspension unit from an engineering company to a garage
• a tray of cake samples from a warehouse to a photography studio
• a computer printer from a shop to a building site office

Of course, after a while most jobs seem the same, but there are always surprises!

return to top

hours and conditions

This depends on who your main customers are, and how many hours you are prepared to work.

For most people the first job of the day is usually about 9 or 10 o'clock in the morning, although you need to be ready to go at any time. Twelve–hour days are common, but there will be some longer days, and plenty of shorter ones too. There's not so much work around at night and at weekends but you will be asked to do some.

You'll be driving 200-500 miles a day, in all weathers and mostly on motorways and trunk roads.

You'll be going to all kinds of places - offices, factories, schools, airports, building sites - so you might get grubby now and again, and you'll need some safety gear as well as smart clothes.

Some of your loads will be small and easy to carry; some will be big and heavy. Sometimes the customer will load and unload for you, and sometimes you'll have to carry a van-load of boxes up three flights of stairs on your own!

return to top

job security

As an owner driver you'll be working for yourself, and that means you don't get holiday pay or sick pay, and you might go for days at a time without getting any work. Even if you subcontract for one of the big national companies, they can't guarantee to keep you busy.

On the other hand, you won't get fired or made redundant: you'll decide for yourself whether you're doing enough business to keep going. And you'll decide how much holiday you can afford to take, and when.

return to top

running the business

As well as 'doing the job' you'll have to manage and run your business, doing things like:

• advertising, marketing, and selling your service to potential customers
• networking to keep in touch with other couriers and customers to keep the work coming in
• keeping track of the money, keeping your accounts up to date, invoicing your customers and chasing payment
• dealing with the bank manager, your accountant, the Inland Revenue and Customs & Excise

return to top

what are you like?

You have to decide whether this is the right business for you - and also whether you are the right person for the business. So what kind of person do you need to be? Here is a recipe for the perfect owner driver:

hard working and persistent

You should be prepared to work hard and do long and irregular hours. You need some luck of course, but in general the people who work hardest do best. And you have to be persistent—with your marketing, networking, ringing round for work, etc—and make your own luck.

professional

One of the most important things from your customers' point of view is your professionalism. They want you to be presentable, reliable and trustworthy, and to give good customer service.

enjoy driving

There's more to being a courier than driving, but you will spend a lot of time on the road. Can you drive up to 500 miles a day (or more) without getting stressed?

confident

Are you confident enough to sell to complete strangers, and thick-skinned enough to keep a positive outlook when you've spent all day getting nowhere?

resourceful and flexible

There will be lots of minor problems which you'll have to sort out on your own, so you'll need a flexible approach and a give-and-take attitude to make everything go smoothly.

general business awareness

It helps if you know something about things like purchase orders, invoicing and statements, and what the different departments are in the average business.

sense of humour

Sometimes things don't go according to plan - customers change their mind, addresses are wrong, or loads aren't ready for collection. Can you see the funny side, shrug it off and get on with the job?

return to top

the market for courier services

One of the first things you have to decide is, what kind of work will you try to get?

Couriers use all types of vehicles - motorbike, car, small van, Transit–size van, long-wheelbase van, and bigger vans up to 7.5 tonnes. And of course the kind of loads you can carry, and who is going to use your service, will depend on the vehicle you choose.

It helps if you know what kinds of work are available in your area, and what vehicles are needed. You can never be completely sure of this until you actually start working, but you will find out this kind of information when you're researching and planning your business.

return to top

who uses couriers?

The short answer is - everybody. But there are different types of service used by different types of company.

This section describes some typical loads, who is likely to use the service, and what kind of vehicle would be best for it. You probably won't be able to specialise in just one type of load, so you'll need a vehicle that will be flexible.

This is not a complete list but will give a flavour of the work:

documents and packages

This includes urgent documents such as tenders and contracts, that usually have to be delivered by a set deadline.

All types of companies use couriers for this purpose. Some large companies use couriers for this every day, but for most businesses it is only a rare requirement.

This kind of service is sometimes used by private individuals who have left their passport at home, or forgotten to take an important document to a meeting, or any other one-off urgent need.

Another thing some companies use a courier for is to deliver documents like payslips, or cheques, which are not urgent but have to be collected and delivered at set times, or delivered to a named person.

You can use any kind of vehicle to carry documents and packages, but obviously a motorbike, car or small van would be most appropriate.

computers and office equipment

Some companies use courier services to take equipment like laptops, projectors, presentation materials, etc between their offices, or to and from hotels or conference centres. These are often early morning jobs so they can have the equipment set up and ready for a training course or presentation. Or you might be asked to collect equipment from an office and deliver it to home-based workers.

Most of these loads will fit into a small van or a large car.

spare parts for service engineers

Another common use for courier services is to deliver spare or replacement parts for computers, engines, vehicles, etc. These parts can be anything from a spare fuse in a bag to a complete gearbox on a pallet.

Normally you will collect the part from the supplier and deliver it to their customer, and an engineer will be called out to fit it. Sometimes you have to deliver the items to a 'PUDO' (pick up and drop off) point which is usually a spares counter, or perhaps to a locked box.

You'll need a small or medium size van for these loads.

missed deliveries and mis-deliveries

Sometimes a transport or logistics company will forget to deliver an item, or they deliver it to the wrong place.

When that happens they need a courier to take it to the right place quickly. This kind of load will often be one or two pallets.

A small van is often adequate for this type of work, but a medium or Transit size van will be more flexible.

multi-drop work

Multi-drop is where you pick up from one place and deliver to several different places, and maybe pick up some returns along the way. The rounds are often in towns and the drops usually have to be done to tight timescales, so it helps if you know the area well.

The loads can be anything, but are usually boxes of small items like stationery or pharmacy. The deliver addresses are usually offices or shops.

Most multi-drop work needs a Transit size van or bigger, and a sack truck can be handy to help get the loads delivered quickly.

return to top

who uses owner drivers?

There are four main types of businesses that subcontract work out to owner drivers:

national courier/delivery companies

Some of the big companies use ODs more or less like employees - you might be asked to wear a uniform, carry company ID or have company livery on your van. These companies usually set the rate they will pay.

local courier companies

Most of the smaller courier companies use ODs on an ad-hoc basis to cover busy times. They might ask you to use their PODs but apart from that you remain independent. They usually ask you to quote for jobs, although some tell you what rate they will pay.

owner drivers

Not all owner drivers sub work out to others, but a lot do. They vary from the ones who only sub one or two jobs a month, to others who sub out several jobs a day. They normally expect you to quote a price for jobs.

haulage and logistics companies

Some general haulage companies use courier ODs for occasional small or urgent loads. They usually expect you to quote a price.

return to top

specialised services

As well as the services described above, there are some specialised courier services you might want to get involved with:

technical courier

A technical courier delivers computer parts or other technical items, and also installs them and takes away the faulty parts (this is also called 'installation and swap-out').

ADR

For 'ADR' (dangerous goods) you don't need a special vehicle but you do need a relevant qualification, and some additional protective equipment.

level 4

'Level 4' is short for Aviation Security Level 4, which means you have done some approved training and you can carry 'known cargo' into air cargo terminals.

return to top

what to do next

The first thing is to plan your business. You'll have to do some research to find out what the demand is like in your area - who's looking for ODs, what kind of vehicles they prefer, and how much they will pay.

From this you can estimate what your likely income will be, then you'll need to work out your costs, and decide whether you are likely to make enough profit.

The next step is to try to predict how quickly your business will build up, and how your cashflow will work out.

This will all fit together into a business plan, to show how you are going to make a profit, and when, and how you are going to make up any shortfall. The bank manager will probably want to see the business plan when you open an account.

When you've done the planning you have to put the plan into action - get your vehicle, insurances, stationery etc, and get out and sell yourself to get the work coming in.

Then of course you have to go out and actually do the job.

The rest of the courier handbooks will give you more information to help with all these steps.