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; alternatively, it can only operate in the US market. Accessing the US market requires registering a logistics company in the US and having the necessary resources for transporting goods. Thus, opening a logistics company in the United States is an expensive undertaking requiring one to invest time and effort in building a sustainable and successful business.

Tips for Getting a Foothold in the Logistics Industry

Typically, US logistics companies offer services that any ordinary customer would expect from them. One may, therefore, get an impression that there are hardly any vacant niches in the market. However, that is not entirely true. In fact, an enterprise operating in this market can focus on several key activities, such as:

  • packing cargoes for transportation;
  • cargo consolidation;
  • preparation of documents;
  • storage of goods before and after transportation;
  • logistic consulting;
  • motoring transport and storage services.

Registering a Logistics Company in the USA: Choosing an Organizational Type

Those considering establishing a logistics business in the United States should keep in mind that selecting an organizational type is extremely important. There are several types of business organization entrepreneurs can choose from: a full partnership (a general partnership), LLC or an individual enterprise (a sole proprietorship).

The first option is suitable for small companies that will be operating in a small area, have a small fleet of vehicles and a small number of employees. However, if an entrepreneur expects their business to grow and provide services throughout the United States and other countries, they are highly recommended to stick with an LLC.

Registering an LLC in the USA relieves its founder from any liabilities. Such a company is simple to manage: there are no boards of directors or shareholders; its owner does not have to fulfil any formalities, either. For more information on establishing an LLC in the US, please see a separate article dedicated to this topic.

If you need advice on establishing an LLC in the US, please do not hesitate to contact YB Case.

Developing a Business Plan for a Logistics Company

Having a business plan helps one see whether additional funds will be required and whether a bank loan will have to be taken out. Normally, registering a logistics company in the United States requires having $250,000 - $300,000.

Setting up a US logistics company won’t require a lot of money if you start on a small scale. In any case, having a good business plan will help convince a bank or investors to invest in your business.

Office Location

One of the main advantages of establishing an American logistics company is that the initial location of its main office will not be important. There will be no need to rent office space in the downtown area, either; in fact, you will be able to manage it even from your garage. This is a big plus since the money saved on renting premises can be used for other purposes.

Once you have your client base, you can proceed to search for a more suitable office space, which can be located in a suburban area, industrial zone or business district.

Documents Required for Setting up a Logistics Company in the US

Conducting legal business in the US is impossible without having proper documentation. It is, therefore, highly advisable to prepare it all in advance in order to protect yourself from any legal risks. To manage a logistics company, you will need the following set of documents:

  • charter;
  • certificate of company registration;
  • license authorizing conduct of logistics business in the US;
  • tax ID;
  • business plan;
  • insurance policy;
  • contract;
  • TM protection;
  • privacy policy and terms of use of online services (for use on the Internet);
  • employment contract;
  • proof of ownership of transport;
  • certificate of registration of an operator of commercial vehicles;
  • licenses for drivers, pilots and other staff.

Insuring a Logistics Company in the US

After registering a logistics company in the United States, you will need to take care of its insurance (against accidents, partial or complete loss of cargo or an employee’s death).

When establishing a logistics company in the United States, its owners usually consider purchasing the following types of insurance policies :

  • general insurance;
  • medical insurance;
  • risk insurance;
  • credit insurance;
  • transport insurance;
  • deposit insurance;
  • payment protection insurance;
  • employee consultation insurance.

To choose the right insurance policy, you will have to seek advice from experienced legal professionals. They will help you determine the exact requirements for logistics activities in the United States.

Read Also: Obtaining a Logistics License in the United States

The type of transport your company will be using depends on a license you will obtain. So, if you plan to launch a water transportation business, you must apply for a license with the US Federal Maritime Commission (FMC). If you plan to ship cargo by air, you will have to apply for a license with the US Department of Transportation (DOT). Other agencies from which you can obtain a license for a US logistics company include the Federal Motor Vehicle Safety Administration (FMCSA), the Customs and Border Guard Administration (CBP), and the Transport Security Administration (TSA).

Choosing a license depends on a selected mode of transport and a state(s) in which your company will be operating. For more information on obtaining licenses for logistics activities in America, please contact YB Case.

Certification for a US Logistics Company

As long as a company has solid expertise, certification is not required for its successful operation inside and outside the US.

For more information on certification and setting up companies for logistics purposes in America, please contact YB Case.

At the initial stages, you will need to purchase the required transport and special equipment. Given that the cost of buying trucks, airplanes and water transport/equipment can be pretty high, it makes more sense to rent them until your business starts turning a profit.

US: IP Protection

Opening a logistics company will require applying for TM or IP protection. Please keep in mind that success or failure of your business will depend on the recognition of your brand. This is especially true if you want to protect your company’s logo, IP and other unique documents. Please note that registering a US trademark will require you to file an application with the USPTO (US Patent and Trademark Office (USPTO)).

Accounting Requirements

Pursuant to the Code of Federal Rules, a company must maintain a list of shippers/carriers and make notes about each shipment of goods. Entries to be made must include:

  • copies of bills of lading or consignment notes;
  • possible compensation;
  • description of services;
  • freight charges;
  • dates of operations;

Please note that the above records must be kept for three years.

Conclusion

Conducting successful business requires building solid relations with transport/manufacturing companies. To start a logistics business in the US, you should, therefore, establish close ties with transportation companies and then gradually increase freight volume and customer base.

Please note, that this article is only intended for informational purposes and cannot be regarded as legal advice. If you have any questions related to the establishment of a US logistics business, you can discuss them with YB Case experts during a personal consultation on logistics activities in the US.

Please keep in mind that our experts can also provide you with assistance in registering logistics companies in the United States, obtaining US logistics licenses, opening corporate bank accounts and registering a trademark in the US.

For individual advice on logistics in the United States, please contact us in any way convenient for you.

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