How to start a logistics company in South Africa

How to start a logistics company in South Africa

Logistics companies are at the centre of any developed economy, they provide an invaluable service that we can’t do without. This is a step-by-step guide on how to start a logistics company in South Africa.

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The main role of a logistics company is transporting or storing goods, but it’s mainly transporting it from one point to another. This is a business that has very high barriers to entry, this can be a good thing.

High barriers to entry mean that it’s easier to get business once you jump the prohibitive barriers. This is mainly because there is little competition while your services are in high demand. Let’s look at some advantages and disadvantages of starting this business.


  • High customer retention rates

Logistics companies have a very high customer retention rate. Getting repeated business from the same client is easy as long as you make them happy. They don’t even think about checking out the competition.

  • A lot of referrals

People in general usually recommend the products or companies they trust; this is especially true in the logistics business. A lot of your clients will be coming from referrals, this means that you don’t have to spend that much at advertising past a certain point.

  • Strong demand

There is a very strong demand of this business, the demand for logistics is there even when it’s a recession. This makes it highly unlikely that your business will fail.

  • Steady cashflow

Logistic companies are mostly used by businesses, this means that most of your clients will be using your services on a regular basis. This will give you a steady flow of income. Which is highly desirable as it makes it easier to plan the business finances.


  • Difficult to scale

Scaling a logistics business can be very hard, it takes a long time before you make enough profit to buy more vehicles. The profit margins for courier companies are not that high, this will make it difficult to scale at a fast pace.

  • Equipment breakdowns

You will spend a lot of money repairing broken equipment, this will cut into your profits, equipment breakdowns may also cost you some business.

  • Learning curve

The learning curve for someone with no prior experience can be a bit steep, it will take sometime before you know the ins and outs of the business.

Costs for starting a logistics company

The most prohibitive costs to starting this company is vehicles, this is something you can work out. Instead of buying your own vehicles, let your drivers use their own vehicles for small cargo and then pay them a cut. However, this will be difficult to do for large cargo, you will require trucks. Most people won’t be prepared to lend them to you, you will have to buy them yourself. Alternatively, you can just focus on small cargo.

You need a garage and other facilities for storing the vehicles and accounting/invoicing software. You also need a tracker and a budget for traffic fines.

Register your business

It’s important to register your business, registering a business currently costs R125 in South Africa when done through the CIPC. It will make it easier to get business deals, most businesses won’t work with an unregistered company.

Get insurance

A lot can go wrong while you are busy moving people’s staff, it’s super important to get insurance for this kind of business. It will protect you from anything that may go wrong, which could put you out of business. Most businesses feel at ease when working with logistics companies that are insured.

Market your company

The marketing for a logistics company works a little bit differently from other businesses. This business is mostly based on trust, people should trust that you will deliver on time without any problems. This can be a bit tough when you are still new and have no referrals. The best way to market it at this point is targeting businesses that need constant shipping of products.

This is way better than targeting individuals, who might your services once in a year, target all companies that constantly need shipping. Show them how much money they can save by working with you. That’s how you build a steady and predictable flow of income.


This was a guide on how to start a logistics company in South Africa. Do you have any thoughts or questions? Comment below.

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