Establishing a logistics business in the USA

Establishing a logistics business in the USA

A logistics company can specialize in importing and exporting goods to/from the United States, or it can only work on the US domestic market. To gain the access to the industry, it is necessary to register a logistics company in the USA, and have some means for transporting goods. Thus, opening a logistics company in the States is an expensive investment. It will be necessary to make efforts to build a sustainable and successful business.

Niche ideas in the logistics industry

US logistics companies typically offer common services, that include everything, that an ordinary customer expects from a standard company. Therefore, it may seem, that the industry does not have any niches. However, an enterprise can focus on several key activities:

  • Packing various cargoes for transportation;
  • A cargo consolidation;
  • The preparation of documents;
  • A storage of goods before and after transportation;
  • A logistic consulting;
  • Motor transport and storage services, etc.
Registering a logistics company in the USA: choosing a legal entity

When considering the establishment of a logistics business in the United States, the chosen legal entity will be of great importance in determining the scale of the business. There is an opportunity to choose between: a full partnership (a general partnership), LLC or an individual enterprise (a sole proprietorship).

The first option is suitable for small companies, that will operate in a small area, have a minimal fleet of vehicles and staff. However, if an entrepreneur plans to develop a business, and carry out transportation throughout the United States, as well as to other countries, then LLC would be the best choice.

Registering an LLC in the USA relieves the founder of the company from a personal responsibility, if something goes wrong. Such a company is simpler and more flexible; no board of directors or shareholders and other formalities are required. You can learn more information from a separate article about LLC. Please note, that YB Case team is ready to offer you personal advice on establishing an LLC in the USA.

A development of a business plan for a logistics company

An accurate plan will reveal areas of business, that might be overlooked at first. A business plan can, also, help to find out details of how financing will be provided, and whether additional capital needs to be raised, and to separate primary things, that funds will go from the secondary ones. It is worth noting, that with a self-financing, a growth will most likely be slower, than if a bank loan were taken. By the way, when registering a logistics company in the United States, it is necessary to prepare about $250,000-300,000.

Setting up a US logistics company can be cost-effective, if you start on a small scale, working in a city or district. In any case, a good working business plan will help convince the bank or investors to invest in the business.

An office location

One of the main advantages of establishing an American logistics company is that in the initial stages it is not particularly important, where the main office will be located. There is no need to rent a room in the city center, since at first the company can be managed even from the garage. This is advantageous since the money, saved on renting premises can be used in other places.

After the client base has been developed, you can search for a new, more suitable office space, which can be located both on the outskirts of the city, or in the industrial zone, and in the business district.

Documents for setting up a logistics company in the USA

It is impossible to conduct a legal and successful business in the USA without a proper documentation. It is highly advisable to prepare them all in advance in order to protect yourself from problems with representatives of the law. To manage a logistics company, you need a list of key documents:

  • A company Charter;
  • A certificate of company registration;
  • A license for a logistics business in the USA;
  • A tax identification number;
  • A business plan;
  • The insurance policy;
  • An operating contract for LLC;
  • A trademark protection;
  • A privacy policy and terms of use of online services (for use on the Internet);
  • A sample employment contract;
  • The proof of ownership of transport;
  • A certificate of registration of the operator of commercial vehicles;
  • Relevant licenses for drivers, pilots, etc. staff.
Getting the insurance for a US logistics company

After registering a company for logistics in the United States, you need to take care of protection in case of emergency situations, for example, if a loaded truck gets into an accident, and this will result in partial or complete loss of cargo, or, even worse, loss of employee’s life.

The main types of insurance policies, that can be considered for purchase, when establishing a logistics company in the United States:
  • a General insurance;
  • a Medical insurance;
  • a Risk insurance;
  • a Credit insurance;
  • a Transport insurance;
  • a Deposit insurance;
  • a Payment Protection Insurance;
  • the Insurance for employee consultation.

For complete confidence in your actions, it is advisable to ask for legal advice on logistics activities in the United States to determine exact requirements for the company to work in the selected state.

Read also:
Obtaining a logistics license in the United States

The type of transport, that the company will use, depends on the authority, in which it is necessary to obtain a logistic license. So, if you plan to work with water transport, you must obtain a license from the US Federal Maritime Commission (FMC). If you plan to ship cargo by air, you will have to obtain a license from the US Department of Transportation (DOT). Other regulatory agencies, where you can obtain a US license for a logistics company, are the Federal Motor Vehicle Safety Administration (FMCSA), the Customs and Border Guard Administration (CBP), the Transport Security Administration (TSA).

The final list of required licenses ultimately varies from the chosen mode of transport and the states, in which it is planned to operate. Therefore, it will also be advisable to consult with YB Case specialists on obtaining licenses for logistics activities in America.

Certification for managing a US logistics company

Certificates show, that a person is competent and highly qualified, and also speak of the desire for development. Obtaining certificates is not required for successful operations within the USA and beyond, provided, that the company has a sufficient experience.

To understand all details of certification, ask for personal advice on setting up companies for logistics activities in America.

Read also:
The acquisition of vehicles and equipment

The allocated capital will need to be spent on the purchase of transport for a logistics company, as well as various loading equipment and special equipment. Due to the fact, that costs of buying trucks, airplanes or water transport/equipment are very significant, it is better to rent everything until the business starts to make a profit.

US intellectual property protection

Opening a company for logistics activities, you will need to apply for the protection of a trademark or IP. Due to the nature of the industry, the success of a business depends on the recognition of your brand. This is especially true, if you want to protect the company logo, intellectual property and other documents, that are unique. To register a US trademark, you must file an application with the USPTO (US Patent and Trademark Office (USPTO)).

Accounting requirements

The Code of Federal Rules is specific with respect to what information a company should consider. We will have to maintain a basic list of shippers and carriers, and make notes about each shipment of goods. The entries should include:

  • Copies of bills of lading or consignment notes;
  • Amounts of possible compensation;
  • A description of services, associated with each transportation;
  • Amounts of freight charges;
  • Dates of operations;

Records must be kept for three years.

A final word

To conduct a successful business, it is necessary to build good relations with transport/manufacturing companies, which need to constantly transport goods from one place to another. Therefore, it is better to start a logistics business in the USA with small volumes of cargo transportation, focusing on one group of shippers, developing permanent relations with organizations and enterprises, gradually increase volumes and customer base.

Please note, that this article is published for informational purposes, it is not legal advice. If you have any questions, related to the establishment of a US logistics business, you can discuss them with YB Case specialists during a personal consultation on logistics activities in the USA.

We remind you, that our experts provide support services in registering logistics companies in the States, are ready to help with obtaining American licenses for logistics activities, opening a corporate bank account, registering a trademark in the States, and providing another competent service.

To order individual advice on logistics in the United States, please, contact us in any way convenient for you, which are indicated in the form below.

The field must be filled
How can we contact you?*
Please enter a valid e-mail
Please enter a valid phone number